Netflix Has A Problem That No One Is Talking About

Netflix (NASDAQ: NFLX) began an aggressive international expansion in 2011, and it's been a massive, albeit expensive, success so far. The company now has over 52 million international subscribers, surpassing total U.S. subscribers for the first time during the second quarter. International profitability, while still usually negative, is steadily improving.

Another piece of good news: Netflix's cost to acquire an international customer has remained roughly flat over the past four years, as measured by marketing spend divided by net customer additions. While Netflix has nearly quadrupled its international marketing spending since 2013, this has led to a proportional increase in the rate of new customers. That's a sign that Netflix's international business is nowhere near saturation.

Chart by author. Data source: Netflix.

Source: Fool.com