October 24, 2011, 11:39 AM — Seeking greener pastures and potential markets, Netflix is headed for Europe.
The streaming video company announced on Monday it will begin offering services to customers in the United Kingdom and Ireland starting early next year.
There's no indication Netflix will offer DVDs by mail to subscribers in the U.K. and Ireland, which makes sense since the company plans on phasing out that part of its business.
The move is a continuation of Netflix's international expansion. After launching its streaming service in the U.S. in 2007, the company added Canada last year, as well as 43 countries in Latin America and the Caribbean just last month. The move announced today is the company's first foray into Europe, though it previously announced plans to launch services in Spain next year.
Netflix is trying to generate more revenue as it encounters mounting competition, content costs and investor skepticism. The company also is trying to recover from a self-inflicted wound that caused shares (NASDAQ: NFLX) to plunge more than 61% since hitting an all-time high of 304.79 on July 13, the day after Netflix announced a large price increase and rate-structure changes that infuriated many customers.
Netflix's stock took another hit in mid-September after the company revised downward its third-quarter estimates for U.S. subscribers by 1 million.
Even prior to the beginning of the year, some analysts and investors argued that Netflix shares were overvalued -- and this was when the stock was around $200 a share, or about 50% below the high it eventually reached last July.
Now shares are trading at their lowest point since August 2010. The question is whether Netflix can reignite investor confidence, and that likely won't happen until the company can prove it's survived the U.S. price hike and can compete internationally.
Monday's announcement certainly didn't move the needle. Shares of Netflix were flat at 117.04 in late-morning trading.