Netflix has plenty of room left to grow

Netflix investors are celebrating the company’s latest subscriber boom.

It’s not just because Netflix now has a whopping 137 million members. Wall Street is happy because more of those customers are coming from overseas — a sign that there’s plenty of room for the streaming company to get even bigger than it already is.

Netflix (NFLX) reported Tuesday that it added nearly 7 million new subscribers last quarter, about 2 million more than it expected. The vast majority, about 6 million, are from outside the United States.

The company expects to add another 9.4 million total subscribers before the year is over.

The streaming service now has about 20 million more international subscribers than it does domestic ones. The company has also said it would have about 80 foreign-language productions this year.

Executives did not break out how much growth it was seeing in specific parts of the world, citing competitive reasons. But they also haven’t been shy about which regions they’re interested in.

Europe is a target: Netflix just announced several new French shows and movies in September, for example. The company has also invested a lot in Latin America, and recently said that it was working on six original titles from Colombia.

India has been a particularly important country for Netflix. This summer, the company debuted an original Indian movie, “Lust Stories,” along with two Indian original shows, “Sacred Games” and “Ghoul.”

During an investor presentation Tuesday, CEO Reed Hastings noted that India has hundreds of millions of mobile phone subscribers, a sign that there’s a sizable and internet-savvy audience for his streaming service. The technology consultancy Counterpoint Research reported last month that the country is home to 400 million smartphone users, making it the second-largest market in the world after China.

“There’s a huge market, and people in India, like around the world, love watching television,” Hastings said. “We’ll take it a million at a time and figure out how to expand the market as we grow.”

There are plenty of other regions where Netflix could consider additional investment. The service is available in more than 190 countries. The biggest exclusion is China, though the company says it “continues to explore options” there. Netflix also isn’t available in Crimea, North Korea or Syria because of restrictions imposed by the US government.

Mary Ann Halford, a former 21st Century Fox executive who worked on that company’s international channels, said Netflix still has challenges as it makes inroads in more global markets.

One of the obstacles is disposable income, especially outside of western Europe, said Halford, who now works as an adviser at OC&C Strategy Consultants.

“I think you have to look at the orbit of people that have disposable income that are willing to pay for a service,” she said, adding that she expected Netflix to hit a ceiling of up to 200 or 250 million subscriptions.

Even then, Halford said Netflix has already built a ton of momentum that should stave off meaningful competition for a while. She also said the company has opportunities to expand its offerings in other places, including Africa, a market that is growing rapidly.

Netflix has also made it clear that it’s not just interested in targeting regional audiences with the content it produces. Its international programs are often marketed all over the globe, regardless of language barrier.

For example, the Spanish heist show “La Casa de Papel” was rebranded as “Money Heist” to English-speaking audiences. It’s a Spanish-language program, but audiences can watch it with subtitles or with dubbed voices.

“When they really connect, they play multi-regional and sometimes completely global,” Netflix Chief Content Officer Ted Sarandos told investors Tuesday. “What we have found is that a good story well told works, and it works in almost any language.”

Netflix stock was up about 5% during trading hours Wednesday.