What are the chances of Netflix launching in Central and Eastern in the near future?
The short answer is probably slim despite the “substantial” expansion plans for Europe the company referred to in its latest set of results.
Having launched in the UK and Ireland, the Nordics and most recently Netherlands, it is now widely felt that Netflix has set its sights on France and Germany as the next markets to roll out its service.
Reed Hastings, the company’s CEO, refused to be drawn on its future plans for Europe. However, he did speak about the importance of partnerships and, for instance, the long-standing one it has with TiVo. This is already reflected in the STB deal it has reached in the UK with Virgin Media and others could be in the pipeline.
As for Central and Eastern Europe, the general consensus is that Netflix would find it difficult to enter a market such as Russia, at least for the next few years, due to the high levels of piracy that still exist there.
Having said that, there are a number of local companies already operating in the country on a legal basis, among them Tvigle, sometimes referred to as the Netflix of Russia, and lvi.ru, who can only stand to benefit from an anti-piracy law that came into effect last year.
Poland, on the other hand, could be more welcoming for Netflix. Indeed, some would argue it could do with Netflix to add further impetus to a market that already boasts such strong players as ipla, for instance.
Recent reports in the French press spoke of meetings between Netflix and members of the government in which the latter laid out conditions the company would have to meet should it enter the country. They included supporting the local cinematographic industry and operating directly out of France rather than Luxembourg so as to not avoid paying VAT.
Netflix would certainly shake up the market in France, perhaps having a bigger effect in than in the UK, at least to date.
It would also bring a new dimension to markets in the CEE region, though we are unlikely to see its launch there for at least the next year or two.
