Slim pickings from Netflix likely for Oz indie sellers

01 January, 1970 by Don Groves

Australian producers and independent distributors who were hoping to make tidy sums when Netflix launches Down Under in March will be disappointed, at least initially.

And while distributors welcome increased competition in the SVoD sector, one digital platform believes the Australian market cannot sustain four services and he predicts Netflix will dominate unless there is a consolidated offering from the local players.

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In that scenario, Foxtel’s Presto, StreamCo’s Stan and Quickflix may have their growth and revenues constrained by the US streaming giant.

As IF had long predicted, Netflix confirmed it will launch in Australia and New Zealand in March, screening original productions including drama Marco Polo, animated sitcom BoJack Horseman, documentaries Virunga and Mission Blue, and stand-up comedy specials Chelsea Handler: Uganda Be Kidding Me Live and Jim Jefferies: Bare.

Noticeably absent from the initial line-up is House of Cards season three, which presumably won’t be ready in time for the March 28 Oz/NZ launch.

The scale of license fees that Netflix is offering Australian sellers for non-exclusive SVoD rights to films was described by one local executive today  as “very low.”

IF has been told the prices quoted for  library films are as low as $1,000 per title, with some going for  $10,000-$12,000, and the fee is around $2,000 per episode for TV series.

Netflix has indicated it will start negotiating for first pay TV window rights to more recent films early in the new year, which will command far higher amounts.

The US majors, however, stand to reap millions of dollars for their first-run films, with some titles fetching several hundred thousand dollars or more.

“The SVoD segment is going to become pretty crowded in coming years with StreamCo, Presto, Quickflix and Netflix,” Citi analyst Justin Diddams told clients.

“There's clearly an appetite to pay for content with $3 billion spent on DVD sales, rentals and cinema attendance, but success of these platforms could be limited by lack of scale ($10 per month) and commodisation of content.

“We still view traditional broadcasters as well positioned, with FTA offering news, sports and Local content and pay-TV operators with premium sports and depth of content.”

Craig White, CEO of VoD and download-to-own platform EzyFlix.tv welcomes Netflix’s arrival as he's convinced the new player will boost awareness and consumption of online video in Australia and New Zealand.

But be believes four separate SVoD platforms is not sustainable or evident in international markets. He predicts Netflix will quickly become the dominant player unless there is a consolidated offer among local market players.

“Netflix will have the greater breadth of titles and no doubt similar pricing to the local players and therefore consumers will naturally gravitate to the SVoD service that offers the best value," he said.

"Those with fewer than 1,500 titles being able to compete with Netflix with 20,000+ at the same price is highly unlikely. Consumers will  become more alert to online video generally and will want to watch new release movies more so than a library of older classics.

“Netflix and other SVoD services are highly complementary to EzyFlix.tv,  which is uniquely differentiated from other subscription services in that it offers early access to the new release movies from every major Hollywood studio.

“SVoD services including Netflix won’t have early access to new release movies as is evident in its home market in the US.”

Quickflix executive chairman/CEO Stephen Langsford is ready for the battle, declaring, “We were the first to launch streaming in 2011 and now are early leader in the market. Netflix will help increase awareness of streaming as the better alternative to commercial TV and expensive pay TV. So game on. “

 

 

 

 

 

 

 

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