Netflix heads for Europe

Netflix is planning to launch in Spain and Britain in the first half of 2012 and is looking at a number of other countries in Europe and Asia for subsequent roll-outs, according to people familiar with the matter.

International expansion is seen as a key driver for growth in the coming years, according to Chief Executive Reed Hastings. Despite rapid growth in the US and Canada, the rate is expected to slow, particularly given a recent 60 per cent price increase that has alienated some customers. Netflix launched its Internet streaming service in Canada in 2010, and in July 2011, announced it would launch in 43 Latin American countries by the end of year.

Reports have now emerged that Netflix is talking to studios about acquiring content rights prior to launching in Spain and Britain in the first half of 2012. A move into Britain has been long-expected, but Spain could pose more of a challenge given the high levels of piracy and unemployment. DVD sales are very low in the country and there is no real digital download business. Apple Inc.’s iTunes Store doesn’t sell movies and TV shows in Spain.

The Spanish roll-out is seen as a test of whether people used to watching movies at home for free will pay about €6 per month for content of higher quality and easier to find than on piracy websites.

The president of a Spanish producers’ association told ScreenDaily that the company has been in talks with local content makers as well.

Other countries on Netflix’s radar are understood to be South Korea, the Netherlands, Belgium, Luxembourg and the Scandinavian nations. As it examines new foreign markets, Netflix is seeking countries with high broadband Internet penetration rates and popular content that is available to be licensed and not locked up in exclusive contracts with other distributors, the people close to the matter said.

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