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The Golden Age For TV Is Unstoppable

The television environment is changing so fast only the fans, it seems, can keep up with it all. First, they wanted to control the schedule. Now they’ve given up the entire idea of schedule. The digital dividend has given more than new channels and new shows. There’s a new kid in town.

LilyhammerBy the time of the official announcement last week that it would march further into European territory, subscription video provider Netflix had competitors scrambling and critics cringing. Sometime between September and the end of this year the Netflix service will be available in France, Germany, Belgium, Austria, Switzerland and, of course, Luxembourg. Netflix CEO Reed Hastings telegraphed the inevitable European expansion in January to shareholders. Popular subscription-building series like independently produced House of Cards, which Netflix carries exclusively in several markets, may not be available everywhere but binge-viewing, elemental to US and UK TV fans, could arrive among French and German speaking viewers.

The Netflix announcement shared very few details, competitors need to be kept guessing as long as possible. Pricing will be “low,” murked Netflix. What, exactly, will be available is unknown. When the service will launch in six countries is also TBA (to be announced).

Subscription TV competition is already robust, broadcasters and telecoms keenly aware of market potential. Up and running in Germany are Maxdome from ProSiebenSat1, Watchever from Vivendi, Snap from Sky Deutschland as well as Amazon Prime Instant Video. None have emerged as market-tilting winners. Vivendi indicated earlier this month it may be looking offload all or part of Watchever, which lost €66 million in 2013.

Pay-TV provider Sky Deutschland is principally owned by 21st Century Fox, formerly known as News Corporation, which has grand designs on the European TV market. Movement is afoot, though reality still distant, to merge UK pay-TV BSkyB, principally owned by 21st Century Fox, with Sky Deutschland and Sky Italia, creating what some are calling Sky Europe. If all hurdles are jumped, the merged entity could have greater rights negotiating power.

And video content rights leverage is the entire game. Netflix has several advantages in this expansion; lots of money, technical experience, Hollywood proximity, track-record and, of course, lots of money. “House of Cards is on first with us,” said Sky Deutschland VOD VP Peter Schulz, quoted by digitalfernsehen.de (May 23), “and only much later with others.” 21st Century Fox also has plenty of money and Hollywood proximity.

“The content landscape in Europe is much more scattered than it is in the US,” offered Digiworld analyst Gilles Fontaine, quoted by AdAge (May 22). “It's difficult to imagine a pan-European strategy for programs. In most countries the top-10 watch list is still mostly national content, specific to each country.” Of course, new - often edgy - TV series suitable for binge viewing by a paying audience opens a new market. Remember Lilyhammer.

Entering France, scheduled for September 15th, could be a huge challenge for Netflix. First run movies can’t be offered on the platform for three years after theatrical release and there are French content rules. Plus there are several entrenched competitors, including telecoms offering ADSL service. French telecoms have been resistant to the Netflix commission offer.

Perhaps to assuage the usual French cultural objections, Netflix has commissioned French producer Gaumont to create an original series based in Marseille, reported Le Figaro (May 19). Gaumont is a heritage French studio. Its US subsidiary produced award winning horror series Hemlock Grove for Netflix.

French broadcasters took the Netflix launch announcement as an opportunity to rail against French content rules. “This is the tip of the iceberg that everybody has so far refused to see,” said broadcaster TF1 CEO Nonce Paolini, quoted by Le Figaro (May 22). “It’s necessary, we now know, that the rules of this game change quickly.”

Netflix has commissioned UK production house Left Bank Pictures to produce a 20-part drama series called The Crown and “inspired” by stageplay The Audience about the 60-year reign of Queen Elizabeth II. It’s Netflix first UK original and, according to the Guardian (May 23), will have a budget in excess of GBP 100 million.

Big German operators ProSiebenSat1 and Sky Deutschland already have a foothold in Austria with their subscription video services. But Austria, a market far smaller than Germany or France, is different as public broadcaster ORF is the dominant force in television. “As of today, internet-enabled TV is not very widespread in Austria, “ explained ORF Director General Alexander Wrabetz, quoted by format.at (May 22). “Internet TV content is hardly used in everyday life.”

Some would see that as opportunity


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