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Netflix Prepping Expanded Euro Presence

28 Jan, 2014 By: Erik Gruenwedel

Netflix reportedly is in discussions with U.S. studios regarding subscription-streaming rights to content in Germany and France. Netflix, which recently bowed service in Holland, also streams service in Scandinavia.

Specifically, Netflix is upping discussions with French officials as entering its home entertainment market includes myriad barriers, including a three-year embargo releasing domestic theatrical films in the retail channel, according to The Wall Street Journal, which cited sources familiar with the situation.

In addition, French law reportedly stipulates distributors help finance some portion of local movie (not TV show) production — a caveat Netflix probably could absorb in its original programming business.

Netflix hasn’t commented publicly on any expansion. Last year, it opened service in Holland, which isn’t too far from Scandinavia, where it bowed subscription streaming in 2012. Netflix said it took two years to achieve profitability in Canada, its first international expansion.

Amazon-owned LoveFilm, a Netflix rival, currently operates by-mail and streaming service in Germany, with Vivendi’s Canal Plus bowing SVOD service in France in 2011. LoveFilm, like Amazon Prime Instant Video, has upped content spending in an effort to thwart Netflix’s global aspirations. LoveFilm currently offers about 10,000 TV and movie titles to subscribers, compared with about 14,000 titles at Netflix.

Regardless, to date, consumer adoption of SVOD across the pond has been slight, according to SNL Kagan, which projected the entire Western European SVOD market at around $700 million in revenue.

Netflix ended the fourth quarter with 10.9 million foreign subscribers, including 1.74 million net additions. Foreign SVOD thus far remains unprofitable to the market pioneer, which lost $57 million in the quarter on such endeavors.


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