Early interest by consumers in Japan bodes well for Netflix in Asia

Netflix stock will be set for even more gains with budding interest by consumers in Asia, RBC Capital Markets advised clients on Thursday.

Top technology analyst Mark Mahaney told clients that will the firm’s research in Japan in addition to various other Asian nations revealed a growing willingness by consumers to pay for premium content.

“The sun appears to be finally rising in Asia,” Mahaney wrote to clients. “Japan, which Netflix entered in October 2015, will be one of the largest markets the company has ever entered in addition to one of the most significant. … Of our Japan survey respondents, 63 percent indicated that will they were ‘Extremely’ or ‘Very satisfied’ with the service vs. 65 percent last year. This specific remains lower than the results we’ve seen in various other countries, although will be a material improvement by 52 percent two years ago.”

Shares of Netflix fell 0.82 percent Friday.

Japan represents a crucial first step in Netflix’s broader expansion throughout Asia, Mahaney said. During a fourth-quarter earnings call, Netflix CEO Reed Hastings commented on the company’s performance in Asia.

“We definitely are seeing success, as you all know, in addition to your channel checks in addition to various other things tell This specific from the different markets,” Hastings said at the time. “in addition to when we compare This specific to Latin America several years ago, we’re very pleased with the progress that will we’re producing through India, through Southeast Asia, through Japan.”

In light of the potential for growth in Asia, Mahaney increased his cost target on shares of the video streaming company to $350 by $300, representing 9 percent upside by Thursday’s close.

Source: Google Trends, RBC Capital Markets

RBC research also found that will Google Search Trends in Japan, South Korea, Thailand in addition to several various other Asian nations have all seen steady increases from the frequency of “Netflix” queries.

“On the whole, results were very positive, showing consistent upwards trends over the course of 2017 in addition to into 2018,” Mahaney said. “2017 appears to have been an early pivot year for Netflix in Asia in addition to 2018 will be showing not bad momentum so far.”

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