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Netflix Testing Brand Bundling in Europe

18 Jul, 2017 By: Erik Gruenwedel

SVOD leader focusing on local content for global audiences

With more than 104 million subscribers globally, Netflix is a formidable brand increasingly coveted by TV networks. As the SVOD pioneer eyes the majority of its subscribers abroad, it is looking to bundle the brand with networks in appropriate markets, according to CEO Reed Hastings.

Speaking on the company's July 17 fiscal call, Hastings said expanding Netflix distribution includes bundling the service with third-party platforms and not vice-versa.

He said there are competitors (Hulu, Amazon Prime Video) that are selling third-party networks as supplemental programming to SVOD subscribers (see Amazon Channels and Hulu Live TV).

“We don’t see that as a business direction for us,” Hastings said.

Instead, Netflix is looking to incorporate the service within third-party pay-TV bundles — a tact now embraced by Comcast Cable. Hastings said Netflix is still in learning the bundling part of the business.

“We’re doing a little bit of that in Europe already and it’s been quite successful. Thus we’re interested in expanding that,” he said.

Create locally. Distribute Globally.

As Netflix increases its international footprint, it is focusing content offerings away from Hollywood’s one-size-fits-all strategy, to nurturing local talent and content for global distribution.

Korean action-adventure movie Okja, a critical success at the Cannes Film Festival from director Bong Joon Ho, underscores Netflix’s redoubled focus on local talent and content that can play well internationally.

Calling the movie one the “most ambitious productions” in the history of Korean cinema, Netflix chief content officer Ted Sarandos said Okja helps attract new subscribers while establishing a SVOD brand in Korea that’s “worth paying for.”

“For most people, they [subscribed to] Netflix for the first time when Okja came out [in June] in Korea. It was a great introduction to Netflix for a lot of the world,” Sarandos said.

Hastings, who has challenged Netflix’s content producers to push the envelope, echoed the importance matching original programming with localized tastes.

“We have to get better and better matching those tastes. And those tastes are not as easily aligned with Western tastes,” he said.


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