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Netflix plans to expand across Europe

Wednesday, May 21 14:13:05

Netflix will launch its online movie and TV subscription service in six more European countries including France and Germany this year, a test of its global expansion strategy as it faces a patchwork of local rules and competitors.

The other new countries it will enter in late 2014 are Austria, Switzerland, Belgium and Luxembourg, the California-based company said on Wednesday. Details on programming and pricing in each country will be announced later.

Netflix, which already operates in Britain, Scandinavia and the Netherlands, will offer a mix of Hollywood movies and TV series in the new markets and plans to include its own original shows such as "House of Cards" where possible.

However, it does not have exclusive rights to all its own shows in all markets - House of Cards, for example, has been broadcast in Germany by ProsiebenSat1 and Sky Deutschland.

Netflix will compete with other video streaming services, such as Canal Play Infinity of Vivendi's Canal Plus in France, as well as Inc's Prime Instant Video and ProSiebenSat1's Maxdome in Germany.

A possible merger of Britain's largest pay-TV company BSkyB with Sky Deutschland and Sky Italia, would add a further strong player on the European market with which Netflix would need to compete for rights and customers.

The success of Netflix in the Netherlands points to the challenges local operators could face in the new markets.

Since launching in the country in September 2013, the U.S. company has won about 500,000 customers, Kepler Cheuvreux analyst Matthijs van Leijenhorst estimates.

Dutch cable operator Ziggo said that it lost 16,000 digital pay-TV subscribers in the first quarter of this year because of increased competition from providers such as Netflix.

Netflix may be able to win over customers by offering low monthly fees in its new countries. In the Netherlands, a subscription costs 8.99 euros ($12.31) a month, while in Britain Netflix costs 5.99 pounds ($10.09).

In Belgium, for example, that compares with cable operator Telenet's on-demand packages of between 14.95 and 24.95 euros per month and Belgacom's 14.95 euro movies and series pass. (Reuters)