Netflix wants to make its mark on the UK, but how will it go about making its presence felt, asks Julian Clover?
If you were to go by the number of conference references that have been made to Netflix over the past 18 months anyone would think that Netflix already had a European presence and was eating into cable ARPU like there was no tomorrow.
As it happens Netflix is not anticipated to put in an appearance until early 2012, and even then it will be restricted to the UK and Ireland.
Significantly the company has also said there are no plans to launch in any more European territories until such time as it returns to global profitability.
The reason in part is the loss of 800,000 subscribers, which meant it ended the third quarter on 23.79 million, suggesting its consumers were not best pleased about recent price increases.
But what will Netflix bring to the UK? We already have Lovefilm, which despite 1.4 million subscribers and a new owner in Amazon, doesn’t get half as many conference plugs. Then there are the online movie services run by Sky, Virgin, BT and Blinkbox. If nothing else they have seen the threat coming.
It is hard to believe that UK pay-TV pricing models can be drastically different from those in the US. As I found out all too recently, cancelling one service will not save you the fortune you were expecting, though if several customers try to save a little you do see the new buzzword that is cord shaving.
Based on its statements to date, Netflix plans to make itself available over-the-top, Lovefilm is moving towards this but will also need to convert its existing customers.
Arguably with the Amazon infrastructure it is no longer as essential.?Netflix will have undoubtedly begun the process of starting its content acquisitions. But to stand out it will need some exclusivity, a marketing tool that could throw up some interesting regulatory issues, particularly given the current Competition Commission investigation, and the recent availability of Sky movie product through Virgin Media’s on demand service.
In the US, Netflix has bid to buy the rights to TV series before the broadcast window. The combination of the British TV structure and our general attitude to television makes it unlikely that we could see that repeated here. Arguably it could take the Sky approach, the satcaster having acquired the rights to series such as House, Mad Men and most recently Glee from terrestrial broadcasters. But one or two series doth not a platform make.
