Netflix Begins International Expansion
Netflix has undergone several changes since its creation, including moving from DVD-by-post to internet streaming and a falling off of subscriptions after they changed their pricing model. But for all those who thought their pricing model was the end of the service – they’ve surprised us all by expanding into foreign markets, specifically the UK.
Let’s not forget Netflix is the leading supplier in the USA, and has a lot of know-how that it can apply to the UK market. However, things might not be all plain sailing for the company in the UK. Firstly, Netflix are not the first player – they have rivals in the form of LoveFilm a DVD-by-post and streaming service that was bought by Amazon in January of 2011. So, while people might be happy to put down their Party Poker for a while, to stream a film or TV program, they might not choose Netflix to be the provider.
Reed Hastings, the CEO of NetFlix flew to the UK for the company launch over there. He told The Independent newspaper that he sees Sky, Rupert Murdoch’s satellite TV service, as their real competitor. Hastings cites the fact that Sky has 10 million customers in the UK, while LoveFilm have a mere 2 million across Europe (though most of these are in the UK).
Amazon’s LoveFilm are responding to the NetFlix threat by offering a streaming service at a £1 lower (that’s roughly $1.50). The Hollywood studios are apparently very happy that Netflix has brought more competition to the UK market, as Sky has had the run of the place for too long. On a more popular note, UK citizens will be pleased to hear that Netflix is keen to invest in original UK content – something that Sky has come under criticism for not doing enough of.