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Netflix Tops 3 Million U.K. Subs

11 Aug, 2014 By: Erik Gruenwedel

Netflix reportedly has topped 3 million subscribers in the United Kingdom, less than three years after launching service in the region, including Ireland.

The threshold was disclosed in an Enders Analysis blog post following a survey of 13,500 U.K. households by the BARB Establishment Survey, which claims on its website to provide “data on population profiles and on the ownership of television equipment,” among other criteria.

As Netflix readies launches in six European countries next month, it crossed the 50-million subscriber mark at the end of its most-recent fiscal period, which included 12.9 million international paid subs. It hasn’t officially disclosed sub numbers for the U.K.

“We have revised our U.K. growth estimates upwards, believing Netflix paid-for subscriptions to be above the 3 million mark as it heads into central Europe,” Enders wrote.

Netflix reportedly garnered the highest market share for video-on-demand services in the first quarter, according to a survey conducted by U.K.-based Ofcom. The SVOD pioneer saw its market share increase to 14% from last year, making it the most popular VOD service behind the BBC’s iPlayer at 38%, the ITV player (22%) and 4oD (20%).

Despite Netflix’s burgeoning public profile, stock market valuation and general hype, it is not about to control the home entertainment industry, according to Wedbush Securities analyst Michael Pachter.

Pachter contends Netflix will continue to thrive only if content owners agree to sell them access to movies and TV shows in a relevant release window.

“If the content owners don’t think $9 [a month subscriptions] represents enough of a return for the viewing of their content, they will withhold that content,” Pachter said in an email.

The analyst said studios and TV series creators can delay, alter or eliminate Netflix’s release window should the SVOD service become too powerful, and/or balk at their license fees.

Pachter believes any alternative scenario is akin to Walmart telling studios it will sell DVDs for $10 and buy them for $6 — a situation the analyst contends is at the heart of the Amazon/Disney dispute.

“The hype is that Netflix dictates the terms of its deals. It doesn’t, and it won’t in the future. The studios won’t blink,” Pachter said.

Meanwhile, Amazon’s Instant Video transaction VOD service saw its U.K. market share decline 1% to 6%, according to Ofcom’s survey of 3,017 respondents conducted in March. The research firm attributed the decline in part to Amazon’s transition of Lovefilm to Amazon Prime Instant Video, which could have led to some consumer confusion.

Other digital platforms included iTunes, which upped its U.K. market share to 5% (from 4%); Google Play and Sky Store at 3% each — the latter including a DVD with each digital movie purchase. Virgin TV Everywhere and Blinkbox both generated 2% market share.

The survey was conducted before Blinkbox began offering exclusive transactional VOD access to the most recent season of “Game of Thrones.”

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