Netflix is coming to the U.K. and Ireland. Finally. But it’ll face tough competition in what has become the gateway to Europe for U.S, companies. It has like-for-like competition in the form of Lovefilm, owned by a little-known company called Amazon.
Netflix U.K.
There have been rumors of Netflix launching in the U.K. for several years, but none have proven to be accurate. Instead Netflix expanded north into Canada and then south into Latin America and the Caribbean.
Then, as rumored a few months ago, Netflix today announced plans to enter Europe via this tried and tested route, launching in the United Kingdom and the Republic of Ireland early in 2012.
The wording of the press release is clever. While Lovefilm has restrictions on streaming, instead offering unlimited DVD rentals, Netflix is promising “unlimited TV shows and movies streaming instantly.” Talk of how much will be charged is limited to “one low monthly subscription price.”
Questions Remain
The big questions facing Netflix at this stage involve pricing and content. If the former is too high and the latter too limited then this latest step in its international expansion could be a non-starter. With Lovefilm already being present, offering a good service at a good price, and having a loyal userbase, the onus is on Netflix to compete.
Another question presents itself in Ireland, where broadband speeds are poor in the rural areas outside of the big cities. It’s the same problem facing Netflix in the Latin American and Caribbean countries it recently launched in. The company is clearly confident broadband speeds will improve rapidly in even the most remote areas.
Conclusions
Content and pricing will make all the difference here. If Netflix can offer Lovefilm users a valid reason to switch, as well as persuading new users to sign up to the service, then the U.K. could be a major money-spinner. And more importantly prove that Europe is a market worth fighting for.
This is only going to make it harder for Vdio to gain a foothold. But for Netflix it represents a new start after a year of missteps in the United States.
