Why Netflix Will Open Its Library In France & Germany In 2014?
VoD giant Netflix are looking for additional markets in Europe to launch their service. That’s why Netflix executives have visited France and Germany last week.
They met with the staff of France’s president to discuss the regulatory environment in the country, and its impact on a possible launch of the company in France.
Netflix executives also visited Germany and other countries on their trip to Europe.
I will end my story with surprising conclusions about Netflix, Amazon Prime and cloud based video platform UltraViolet.
Netflix Will Open in France and Germany
Netflix is selling monthly subscriptions that allow users all you can watch movies and TV series via web, TV, touch and mobile devices and game consoles like Xbox and PlayStation.
Their service pose a challenge to traditional television companies that rely on advertising as well as pay-tv operators, and has been criticized by telecom companies for overloading their broadband networks with traffic.
Netflix is now available in 41 countries and has so far focused on English-speaking markets in Europe such as Britain, the Netherlands, and the Nordics. Opening in France has been a rumor for quite some time already.
Who Will Win the VoD Battle in France?
The long delays for movies by subscription have so far crippled attempts to launch video streaming services in France.
Vivendi’s Canal Plus, France’s largest pay-tv service, created one in 2011 called Canal Play Infinity that has attracted few users.
Who Will Win the VoD Battle in Germany?
And what strategic plays will Bertelsmann make, knowing that Netflix is coming to Germany?
Bertelsmann’s e-commerce strategy already capitulated a decade ago in Germany, when they let go of Bol.com way too early.
I have been watching the VoD players for quite some time now and predicted the Netflix jump to The Netherlands in 2013.
Netflix CEO Reed Hastings said in a recent letter to investors that he sees “a big international opportunity for Netflix,” and added on the company’s most recent earnings call that Netflix could generate as much as 80% of its total revenue outside of the U.S. in the future.
So moving to France and Germany makes sense as targets for Netflix; the company already offers a French-language product to serve customers in Canada, and both Germany and France are huge broadband markets.
However, regulatory challenges could complicate a launch in France in particular. Current rules mandate that movies can’t be available on on-demand markets until three years after they show up in theaters.
The last reason why it’s safe to conclude that Netflix wants to open its library in France, Germany and other European markets is the fact that Amazon Prime could be a real threat to Netflix. And to the local players in each market.
Amazon is now also offering unlimited instant streaming of thousands of movies and TV shows with Amazon Prime Instant Video.
We estimate that Amazon Prime now has 20+ million members which are paying around $78 a year. Netflix’ ARPU is doing around $79 per member per year.
And with an active user base of 250+ million members and IMDB in his back pocket, Jeff Bezos might play a Royal Straight Flush against the makers of House of Cards.
However, Netflix, Amazon, Hulu, HBO and iTunes have noticed a new competitor in the U.S called UltraViolet. This new and industry wide platform offers liquid video sales and storage in the cloud.
UnltraViolet was launched by Sony and Warner but is now embraced by tens of right holders, distributors, software and hardware companies.
What About You?
Who will win the battle for Europe in VoD: Netflix, Amazon or the local players? I would love to hear your ideas.
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About the Author
Igor Beuker is a serial entrepreneur, acclaimed trendwatcher & speaker, marketing consultant and advisory board member at several disruptive media, technology and entertainment firms. Book Igor as keynote speaker, follow Igor on Twitter or contact him via LinkedIn.