Alarm Bells Sound After Kiwi Broadband Provider Offers Access to Netflix

7 Jul, 2014 By: Erik Gruenwedel

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Netflix’s methodical march to launch its streaming service globally has long rankled pay-TV operators worried about the effect on their bundled subscribers.

Add New Zealand broadcasters to the list of concerned multichannel video program distributors after revelations that Slingshot — a regional broadband provider — has for the past 12 months been enabling subscribers to access SVOD services such as Netflix and Hulu Plus — both heretofore blocked in the country.

Called “Global Mode,” the free service to Slingshot broadband subscribers allows them to access U.S. and British movie and TV streaming sites (with a separate subscription) typically blocked within New Zealand due to content rights restrictions.

It should be noted that some enterprising international broadband users have been able to access Netflix by claiming U.S. residency (through a friend or family member) when linking with U.S. servers.

Regardless, until Netflix officially launches service in Belgium, France, Germany and Spain later this year, residents in those countries can’t legally access the SVOD service. That’s because in addition to technological issues, broadcasters and other MVPDs in those countries typically possess the license agreements with third-party content holders such as Hollywood studios over specific territories.

In New Zealand, those licenses are held by players such as Sky TV, Television New Zealand and TV3, among others. Indeed, Telecom New Zealand last month launched a SVOD service called Lightbox, which offers 5,000 hours of television programming, including series such as “Vikings,” “Mad Men” and the latest season of “24,” among others, for $15 a month.

Other major SVOD players include EzyFlix and Quickflix, the latter dealing with its own content license issues, notably HBO.

“HBO is a tremendous provider of content but they're certainly not the only provider of content in the world. There are thousands of top-tier providers and we continue to talk with all of them,” Quickflix CEO Chris Taylor told National Business Review Online.

Meanwhile, Kiwi broadcasters are reportedly holding talks with Hollywood studios, which produce much of TV content, over the issue, according to the New Zealand Herald.

Sky TV, apparently, isn’t one of them. The satellite operator believes Slingshot’s service will be usurped by growing SVOD competition (including its own service), in addition to Netflix’s concern Slingshot’s backdoor access could anger its content holders, according to CEO John Fellet.

"I don't think they would be keen on paying for New Zealand rights only to see them undermined by people accessing the U.S. [rights]," Fellet told the Herald.

Although Netflix has made no mention of launching service in New Zealand and Australia, media scuttlebutt suggests the service is coming to the region in 2015.

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