The online streaming giant Netflix launches the second phase of its European expansion plan Monday as it sets out to seduce French viewers with a House of Cards-style political drama set in France's southern port city of Marseille, reports FRANCE 24.
Netflix's move into the French market will be quickly followed by launches in Austria, Belgium, Germany, Luxembourg and Switzerland, all part of a push that has already put local operators under pressure.
A patchwork of European providers are bracing for an unequal battle with the California-based company, which already has 50 million subscribers worldwide, three-quarters of which (36 million) are in the United States.
Netflix subscribers enjoy access to Hollywood films, cartoons and television series including original content such as "Orange is the New Black" and the hugely successful political drama 'House of Cards' starring Kevin Spacey and Robin Wright. Subscribers can watch as much as they like at any time on almost any Internet-connected device such as a laptop, tablet or smartphone.
Netflix CEO Reed Hastings said recently that his objective was to have a third of target country households subscribing to the service within the next five to 10 years.
Pascal Lechevallier, founder of new media consultants What's Hot, said European competitors striving to resist the Netflix incursion were at a disadvantage due to the lack of a single, continent-wide provider.
Many, however, had taken the opportunity to "beef up" their offers in anticipation of the Netflix arrival, he said.
Existing providers also hoped the Netflix roll-out in their countries would raise the profile of online streaming and encourage people to look more closely at the available services, Lechevallier added.
The Snap service offered by German pay-TV channel Sky Deutschland recently dropped its price from €9.90 to €3.99 per month, far below the anticipated Netflix offer of around €8 ($10).
In France, meanwhile, the main pay-TV group Canal+ strengthened and modernised its online streaming service, CanalPlay, which has attracted 520,000 subscribers in the past three years.
The company has had to negotiate an assortment of local rules and regulations to achieve its planned second wave of European expansion.
It faced particular obstacles in France, where the film and television industry is strictly regulated and heavily subsidised. TV channels and media companies in France are required to invest in domestic content and there have been fears that Netflix.fr would lure subscribers away from Canal+, the main source of financing for French-made films.
The decision to go ahead with a French launch follows months of contentious negotiations between Netflix executives and the French government, which has put pressure on the US company to meet a number of rules designed to protect the French TV and film industry from foreign competition – the so-called Cultural Exception.
For example, existing video-on-demand companies are barred from streaming films until three years after their cinema release, while streaming services based in France with annual earnings of more than €10 million euros are required to hand over 15 percent of their revenue to the European film industry and 12 percent to French filmmakers.
As part of its plans to lure French subscribers, Netflix is commissioning a French-language political drama – a tale of power, corruption and revenge set in the port city of Marseille, France's second city.
Founded in 1997, Netflix established itself by distributing DVDs in the post. Since 2012 it has also been available in Denmark, Ireland, the Netherlands, Norway, Sweden and the United Kingdom. Netflix does not give subscription figures for individual countries but research service Enders Analysis says it has now crossed the three million mark in the UK.
But if Canal+ promises to offer tough competition, Netflix already has a precedent in the form of British group BSkyB and its Sky Movies offer. In the UK, Sky Movies has an exclusive contract with the six largest Hollywood studios, meaning that the rights to those films are blocked for at least three years.
Read more of this report from FRANCE 24.