Netflix is tipped to launch in Australia in February 2015 and if that date slips July 2015, the move is set to hurt Foxtel and content providers like start up EzyFlix.
According to Hollywood movie house sources Netflix has negotiated Australian contracts to start in February 2015, none of the movie studio’s that SmartHouse has spoken to has allowed for revenue from Australia via Netflix in 2014 as suggested by other media organisations.
The move by Netflix into the Australian markets puts pressure on the Channel Seven and the Nine network with both networks working to deliver a Netflix competitor before the US Company can launch in Australia in 2015.
Currently the Seven Network is considering approaches from Optus while the Nine Network is currently working on their Stream Co IPTV service as a competitor to Netflix.
Currently Netflix has over 300,000 Australians who are using a VPN IP address and an Australian credit card to get access to their US service. What is not known is whether this database of current Australian customers will be forced to take up the Australian Netflix service which is tipped to be “inferior” to the USA service as Foxtel and the free to air TV stations still own rights to content for the Australian market that is currently available on the Netflix US service.
Currently Netflix in the USA does not have access to HBO content and series like Game of Thrones. In Australia this content is available via Foxtel for a fee.
Industry sources have today told SmartHouse that Netflix will launch in Australia in 2015 and not in 2014 as speculated by Fairfax Media.
A recent research study by personal finance site Pocketbook found Netflix is the second most popular paid-content media company in Australia, despite not being available here and actively geo-blocking Australian users.
The move is set to be a blow to Foxtel as it will stop subscription growth which the network is dependent on.
Fox Sports which is the biggest drawcard on the Foxtel network is dependent on subscription growth due to increased costs associated with them obtaining sports right to sports such as AFL and NRL.
Fox Sports financial records show that the Company is losing ground due to Foxtel’s inability to grow subscribers for their sporting and premium services.
Also set to be hit are companies like bottom end streaming Company EzyFlix who are facing serious problems going forward with Netflix set to undercut the recent IPTV start up, Netflix will also have access to a portfolio of content with the likes of EzyFlix forced to offer old catalogue content.
Recently EzyFlix cut a deal with Samsung to get their service onto the Korean Companies TV’s they join Foxtel, Quickflix and several other streaming Companies on Samsung devices.
Samsung, LG, Panasonic and Hisense are all expected to load the Netflix app onto their TV’s in 2015 a move that will present problems for the likes of EzyFlix.
EzyFlix CEO Craig White who has engaged in selective PR said of the Netflix service and the debate over illegal downloads “Most content providers are sincerely striving to increase access to content through legitimate services. That said, between the content’s rights acquisition costs and related expenses, there are significant financial barriers to entry that inhibit a broader base of online providers offering legitimate services at this point in time.”
He has not commented on how his Company will survive in an environment where Netflix is offering low cost content to Australian consumers, what White say recently was that the pricing structures put in place by content providers created a “digital pricing discrepancy” between Australian and overseas markets and was slowing “would-be providers like EzyFlix from establishing streaming services.
The volume of Australians accessing the Netflix US service has tripled in size since January 2013 with the overseas connections tipped to hit over 350,000 subscribers by February 2015.
Currently Foxtel charges $100 a month for their service, while Australians accessing the Netflix content pay $10 a month, they also get access to content that Foxtel and the likes of EzyFlix don’t have.