Don’t know how I missed this but Netflix has set an actual date for its Australia/New Zealand launch — March 24 — and started pushing out details about how the streaming service will look and function Down Under. For ongoing details, check out the company’s local social media accounts: Twitter/Instagram (@NetflixANZ), Facebook (www.facebook.com/NetflixANZ) and Tumblr (NetflixANZ).
Sadly, Australians have home data caps but Netflix has worked out an “unmetering” deal with broadband provider, iiNet, to stream “hours of entertainment … with no fear of the usage counting against” the caps. The deal, which mirrors a similar arrangement cut by one of Netflix’s new Australian competitors, provoked the ire of Wall Street Journal columnist L. Gordon Crovier, who thought Netflix was hypocritical for getting special treatment for its content.
Australians and Kiwis and the merchants that serve them don’t seem to care about politics — there’s a smorgasbord of Netflix-related offers out there for the launch of the streaming service, which sails fully formed into the Antipodean market like Venus on a half shell.
Televisions and device manufacturers have gotten on board by offering free Netflix trial subscriptions with purchase of Netflix-enabled devices. Vodafone is giving new mobile phone customers in New Zealand three free months of Netflix. We won’t know anything about pricing until March 24, but the company said it will offer three types of plans: a single-stream standard definition plan, two-stream high-definition plan and four-stream 4K ultra-high definition “family” plan.
This is the first English-speaking market where Netflix will launch its service with a full complement of devices, broadband coverage and well-known original content, so it will be interesting to see what happens with subscriber acquisitions. Can’t wait.
Japan is Netflix’s first official Asian expansion market (although millions of Asians have unofficially joined via VPNs in Netflix countries), and as such, is seen as a test market for China and South Korea. Here’s what Wells said about the Japan rollout, slated for later this year:
Why it won’t be like Netflix’s Quixotic wanderings in Latin America: “The ability to pay, the wealth, all that is there, consumption of online video is huge.”
Why Netflix won’t end up like Hulu, which sold itself of Nippon TV last year: “I’m not sure that (Hulu) received a full level of investment (from its studio owners) in terms of what could be done in a market.”
Connectivity should not be an issue: “There is plenty of high-speed broadband in a better shape than America in terms of density and speed.”
But figuring out the content mix could be challenging. “The glaring line is the propensity to enjoy Japanese content or at least local content or some Korean drama in there (and) some Chinese content as well.”
Netflix will double the number of original shows and movies it produces with the goal of having 40 original programs each year. Content Chief Ted Sarandos expects to reach that level in a couple of years, Wells said.
As always, Wells was cagey about how Netflix measures return on investment for these (sometimes pricey) shows in lieu of ratings (and advertising revenue):
“We don’t have to have a show that has 20 million viewers. A success for us relative to cost might be a show that’s got 2 million to 4 million viewers, and if we can find that set of people that’s going to suit us just nicely,” Wells said.
“As long as we are funding the doubles and triples we’re good. And if that content increasingly works outside the U.S. there is another advantage in terms of being able to distribute to a larger platform outside the U.S. and do that in a very efficient, quick manner where we’re bringing content that is in the right size quickly to those audiences. You don’t have to have the one- and two- and three-year delay that increasingly world consumers are intolerant of and you see that reflected in the piracy numbers.”
What’s cool and somewhat scary about the idea of global micro markets for content is that Netflix will be able to produce some very elaborate data about global media consumption for the first time ever.
The Netflix algorithms’ ability to predict ebb and flow of global tastes will surely yield some interesting insights into other facets of the collective human psyche. Take a look at this story I wrote about how Netflix-type algorithms are being used in other settings.
After testing the waters in Canada, Latin America, the United Kingdom and the Nordics, Netflix has concluded that its international model offering streaming-only with mostly Hollywood-produced content works really well, even in non-English-speaking countries. Wells said demand for “high-quality, western-produced” TV shows and movies is strong globally and international consumers are increasingly aware of streaming and of Netflix.
Thus, Netflix has been constructing content catalogs of around 80 percent Hollywood-produced content and 20 percent local content for each market, Wells said.
The strategy of acquiring popular local content extends Netflix’s “cool factor” by connecting subscribers with global zeitgeist — the same way the company aligned itself with the budding independent film movement, way back when, to culturally elevate online rental above pedestrian Blockbuster and its other store-based competition.
Wells said the top factors in choosing the next expansion market are (pretty obvious, in case you’re wondering why service hasn’t started in your area):
- Broadband penetration
- Consumption of online video
- Disposable wealth
- Netflix’s ability to accept payment in that country
Well, the FCC’s net neutrality vote could not have gone better for Netflix. This CNN piece explains what the debate is all about, and this New York Times article describes how the Internet has been transformed, at least regulatory-wise, into a public utility.
It seems obvious that Netflix would be among the first U.S. companies to take advantage of thawing relations between the U.S. and Cuba, but I wasn’t expecting this announcement at all.
“Starting today, people in Cuba with Internet connections and access to international payment methods will be able to subscribe to Netflix and instantly watch a curated selection of popular movies and TV shows.” – Netflix press release
First of all, the World Bank estimates that just 5 percent of Cubans have broadband access to watch Netflix. And the $8 per month subscription fee will seem pricey in a country where the average monthly wage apparently is $20. On one hand, this move by Netflix seems a little show-ponyish — with 11 million residents (probably 3-4 million households, only a fraction of them broadband equipped) this market won’t contribute much to subscriber growth.
And yet, Netflix co-founders Marc Randolph and Reed Hastings do have an uncanny ability to see around corners. Think of what it will be like to be on the ground floor in a country where online commerce is still forming, and where, with no entrenched broadcast or cable interests, internet television could be the primary viewing option.
Cuba is isolated enough yet close enough to U.S. culture and media to provide a real world laboratory to test some interesting paradigms. What would happen if you could build a broadband infrastructure with Internet television in mind? What if the selection of Internet TV channels was as robust as cable/satellite from the get-go — how would consumers behave? The answers could have a far-reaching effect.
Today is a pretty big day in the internet TV universe: Dish Network’s new streaming service, Sling TV, went live for preregistered customers as a first move toward a la carte channel selection by a pay-TV aggregator. Although a half-step toward true liberation from tiered cable — because you still have to buy a bundle of streaming channels – there is no contract and its costs $20 a month. I haven’t tried it yet but that seems like a pretty good deal for live streams and some on-demand content from a dozen basic cable channels like CNN, ESPN and ESPN2, the Travel Channel, HGTV, Food Network, TNT, TBS, the Disney Channel, ABC Family and Cartoon Network.
Reviews have been mixed, with some in the tech press criticizing the interface as “not ready for prime time,” and others comparing the weird conglomeration of live TV and limited on-demand content negatively with Netflix and Amazon Instant Video. But most saw this baby step into a new dawn of television and movie watching as positive. Dish is still issuing invitations to Sling TV for those who preregister, so give it a whirl and let me know what you think.
It has been four years and change since Netflix launched in its first international market — Canada — with much fanfare and a minor but embarrassing episode involving paid extras who were sprinkled into the crowd at a company-sponsored street party in Toronto. Then came the 2011 Latin American barnstorm-style rollout — Netflix’s most complicated — in which it confronted issues with weak broadband penetration, fewer digital devices, language and credit card processing issues. Great Britain and Ireland followed — with much jockeying from established competitors. Last year’s European launches looked like a snap and those markets, according to the company, been a bigger-than-expected success. And we learned last week that Netflix is fixin’ to take over the world. In two years.
Netflix’s fourth quarter earnings presentation contained the startling statement that the company can complete its international expansion– while staying profitable — in two years. That means growing from about 50 international markets to 200. And even more delightfully, it means that Content Chief Ted Sarandos soon will have the might to negotiate global content deals that enrich selection — opening new worlds of international content to U.S. subscribers and creating a new reality in which Netflix subscribers around the world are watching the same “channel.” Imagine the water cooler talk.
The company’s discovery that its original content – Marco Polo, Orange Is the New Black, House of Cards — performs more efficiently than the stuff it licenses has led to its decision to triple its spending on originals, from 100 hours in 2014 to 320 hours this year. This lovely explosion of films, documentaries, original series and comedy specials presumably will further minimize the importance of “windowing” — distribution deals that cause TV shows and movies to hopscotch aggravatingly across pay-per-view and broadcast services.
Here’s the relevant information from the earnings presentation.