Netflix’s European Crusade

Netflix has developed from a first-class mail customer of the US Postal Service to the biggest source of streaming web traffic in America. Having revolutionised the way TV is watched at home, the Founding Fathers of online streaming are extending their virtual hegemony over Europe. Oh how the tables have turned.

September 2014 marked the latest stage of Netflix’s European invasion. Having already launched the site in Britain, France and Germany, the service was made available to residents of Belgium and Luxembourg. This was achieved by implementing domestic profits into this venture. In the last year and a half Netflix’s US subscriber base has grown by approximately 25% every quarter – steady, but not significant growth in the eyes of its investors, who believe a European invasion will best serve their interests.

It is plain to see why they are targeting Europe. Take Germany and France: with a combined population of 147 million people, Netflix have made an inroad into a market with the largest pool of potential subscribers outside North America. Particularly in Europe however, the presence of cable TV operators is not to be dismissed. I’m a purist – there’s nothing better than sitting on your backside in front of the TV watching Friends, but the dynamism of Netflix is not to be disregarded. As Ross might say, could Netflix BE any more convenient?

There is a school of thought that the emergence of Netflix is to complement, rather than replace cable TV. To appropriate an oft-repeated phrase by Prosecutor Gerrie Nel in the Pistorius Trial, I put it to you that this is not the case. It is true that Netflix has very few of its own programmes on offer so one might invariably have to watch TV. However, not only has the success of Orange is the New Black and House of Cards enhanced Netflix’s reputation, many programmes you see on TV will be or are already on the website – quite reminiscent of a Kerry Packer-esque revolution.

Netflix’s strategy clearly illustrates that they are here to dismantle the dominance of cable TV; they are unique enough to achieve that. The service itself accommodates a large audience not least because the site can be accessed from all devices. Moreover, the service is glocalised, as films and TV shows can be viewed with dubbings and subtitles. It has also overtaken cable TV because time slots, choosing what to fit into a 168-hour week and legal requirements such as post-watershed viewing don’t hold it back. On Netflix, you watch what you want when you want. Uh oh, good luck to those with a propensity for binge watching.

Netflix have only won a few battles though; the war is far from over. Cable TV companies have altered their business strategies to counter Netflix’s ascendancy. Operators such as Sky TV offer packages to ensure customers stay in their ecosystem; more significantly, they have their own on-demand platform called Now TV. These innovations have ensured that for the time being, Cable TV retains its currency. Though Netflix has 9.4 million European subscribers, they lag behind Sky’s 19.3 million-strong following. For now, Sky is their limit, but their dominance is being quickly eroded.

In House of Cards, Francis Underwood says that ‘of all the things I hold in high regard, rules are not one of them’. Though not breaking any rules, Netflix are redefining them.


By Kamran Khan

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