With Netflix's European invasion approaching, France braces

Posted Jul 31, 2014 by Lidya Patal
Netflix is coming to Europe in September, a move that has France's VOD market -- and its government -- bracing for impact.
Netflix headquarters in Los Gatos  California
Netflix headquarters in Los Gatos, California
Ryan Anson, AFP/File
Netflix is approaching the shores of continental Europe. As early as September, the massive-and-still-growing streaming video service will invade the continent and show up in markets big (France, Germany) and small (Austria, Switzerland, Belgium and Luxembourg).
It’s all part of Netflix’s pursuit of 100 million subscribers across the globe. And with the company’s earnings nearly doubling during the second quarter, a reported 50 million subscribers in the U.S. and 40 international markets, and now the expansion to potential goldmines like France and Germany, it won’t be long before Netflix surpasses that number.
However, the European markets -- in socialist France, especially -- pose unique challenges to Netflix’s plan for global streaming solidarity. The French video-on-demand market is fluid, fickle and increasingly opposed to a U.S. firm like Netflix coming in and marginalizing existing, domestic firms.
Netflix announced in late July that they would set up their European operations in Amsterdam, the Netherlands contrary to initial reports of a base in Luxembourg. The company maintains that despite not establishing a satellite in France -- something they had been in talks with French president Francois Hollande about doing -- they will adhere to the peculiar French VOD guidelines. Specifically, the 36-month waiting window between a movie’s theatrical release and its release on the secondary VOD market.
As soon as Netflix confirmed its Amsterdam operation and September rollout, French culture minister Aurelie Filippetti announced her intention of reducing the window from 36 months to 24 months. This would allow French competitors, including CanalPlay and Orange’s VOD service, to pose a stiffer challenge to the Netflix tidal wave.
With the 24-month window, the culture ministry aims to "develop excellent French actors in the field of video on demand," Filippetti said. "We must facilitate access to legal online offers, working on their visibility and availability."
CanalPlay, the SVOD arm of Vivendi's Canal Plus, is well-positioned at least for the moment. The service has 450,000 current subscribers, making it the main streaming service, and it also has the French rights to popular Netflix program House of Cards. The CanalPlay service has a two-tiered subscription system, one a cheaper option aimed at younger people, on which they distribute over 9,000 programs. Orange's VOD service, launched just this year, also has a major ace in the hole: The service owns the first right-of-refusal to HBO programs in France.