This month, Netflix is launching its biggest expansion to date in six countries in Europe; Germany and France just launched, while Austria, Switzerland, Belgium and Luxembourg will be next.
Although consumers are embracing the new all-you-can-watch VOD service, incumbent stakeholders are not happy about the arrival of the California-based company. Especially in France emotions run high with people predicting ‘the end of French art cinema’, pointing at the fact that using legal constructions the portal can escape the laws protecting French language and culture.
In France, all broadcasters and on-demand content providers are required to pay a special audio-visual tax in order to support French cinema and production, while Netflix is not subject to this taxation as it is operated out of Amsterdam in the Netherlands.
Most French operators, who all run their own VOD services, have banded together to keep Netflix from reaching their customers – Orange, Canal+ and others did not sign any agreement with Netflix – with the exception of Bouygues Telecom. Viewers in France have to turn to OTT distribution, such as Apple TV, Google Chromecast or game consoles, in order to access the service.
This is also the case in most other European countries, where incumbent platforms so far have kept Netflix off their networks – with the notable exception of Virgin Media in the UK (thanks to TiVo) and Com Hem in Sweden, and more recently Deutsche Telekom in Germany, where it will be available as an app on the operator’s IPTV platform Entertain.
In some territories, Netflix signs also deals with mobile operators. Vodafone in the UK and the Netherlands currently offers its new top-tier customers six months free of Netflix – and a similar deal is in the works for Germany.
Meanwhile, consumers are benefitting from the new arrival, as most existing VOD platforms have extended their choice as well as lowering their pricing model to match Netflix EUR7.99 to EUR8.99 monthly subscription fee.
For instance, UPC in the Netherlands and Switzerland has launched the UPC My Prime VOD service, which is free to top-tier customers, and offering a library of movies and TV series, while Sky Deutschland has also beefed up its offer and dropping the price at the same time.
Experience in the Netherlands has shown that the arrival of Netflix has kept all competitors on their toes while viewers are eager to subscribe to the new service. However, hopes that S-VOD services would eliminate piracy have so far not proven to be true. (Read more in Briel On)