Netflix heading Down Under: will it galvanize competition?

Following up on promises to expand aggressively in international markets next year, VOD service Netflix is to launch in Australia and New Zealand this coming March.
November 19, 2014

Following up on promises to expand aggressively in international markets next year, VOD service Netflix announced on Tuesday (November 18) that it will launch in Australia and New Zealand this coming March.

The addition will bring the number of countries and territories where Netflix is available to more than 50. The content available in each territory varies, depending on the rights secured for each piece of content. For instance, in France, Canal+ owns the rights to House of Cards, which is produced by Media Rights Capital, not Netflix.

At a recent investor conference, Netflix’s chief financial officer David Wells commented on the streaming service’s expansion plans, saying its presence sends a jolt to the local media companies in European markets.

“We definitely galvanize local competition when we enter the market. We see that over and over and over again with Sky in Europe, with other incumbent players, whether it’s Vivendi or others,” Wells said at the RBC Capital Markets 2014 Technology, Internet, Media and Telecommunications Conference earlier this month.

A lot of Australians already have Netflix through virtual private network (VPN) services, however a Netflix spokesperson refused to discuss the scale of the problem when contacted by realscreen‘s sister publication StreamDaily.

Giving testimony in Canada, Netflix’s director of public policy said using false IP addresses is a violation of its terms of use and that it is not the only company that has to figure out how to deal with the issue. Concerns over the issue in Australia prompted Stephen Langsford, the CEO of Australian SVOD service Quickflix, to write an open letter to Netflix CEO Reed Hastings accusing him of ignoring “back-door access.”

At launch, programming available on Netflix in Australia and New Zealand (Netflix ANZ) will include the documentaries Virunga and Mission Blue, and stand-up comedy specials such as Chelsea Handler: Uganda Be Kidding Me Live and Jim Jefferies’ Bare, as well as original series such as Marco Polo, BoJack Horseman and DreamWorks Animation’s All Hail King Julien, along with numerous other children’s titles.

Securing exclusive content rights and international expansion are priorities for Netflix, and both are expensive.

“We will expand internationally if we continue to be successful, and we’ll expand more aggressively the more confidence we have that that’s the right business decision,” Wells said. “If those two things are true, and the larger we expand internationally, the more pressure it’s going to place on cash.”

Not all global markets have been fantastically successful from the get-go, Wells recognized.

“Latin America continues to be a very good market for us, and we think we’ve got a lot of tailwind of growth there. We were probably a bit naïve going into the market thinking…we [were] going to grow out of the gate a little faster than we did,” he said.

  • From Stream Daily, with additional files from Melita Kuburas


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