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Will Netflix come to Australia?

Adam Bender | June 5, 2013
No plans announced, but analysts see Australia as an ideal market.

"You'd expect that when they enter the market it will be with a very compelling offer which they may do as a loss leader in price terms to gain market share very quickly," he said. However, if content restrictions limit the amount of content on an Australian Netflix offering, the service may struggle to attract customers, he said.

One way Netflix could quickly establish relationships in Australia might be to acquire Quickflix, which offers nearly identical services, including DVD rentals by post and video streaming. Cranswick said such a move could be easier than starting from scratch and would have the additional benefit of taking out a competitor. Also, "given the current ease of accessing debt markets, it might be a better deal financially," he said.

Quickflix didn't respond to requests for comment, but the startup has not hidden its fear that Netflix could be a future competitor.

"We're trying to move as fast as we can because we're scared of these other big competitors and we're scared of people like [the US company] Netflix ... who might be coming to Australia," Quickflix chief innovation officer, Tim Parsons, said at last year's CeBIT Future of Payments conference.

"We want to make sure that when they turn up they realise we're in all the key devices in the premium positions--contractually agreed with those device manufacturers--and have all the different pieces in place like PCI compliance ... so they say, 'That's not really worth it.'"

Meanwhile, Australia's top cable provider Foxtel has been steadily rolling out IPTV services that--like Netflix--work on any device. Foxtel Play, a new $25 monthly subscription service available this month, lets customers stream TV shows and movies across the TV, game consoles, tablets, PCs and other devices with no lock-in contract.

Foxtel, which declined to comment for this article, has also signed a deal with Netflix to air and stream House of Cards, a drama series produced by Netflix for its own subscription service.

"If the incumbents stifle Netflix's ambitions here, [Netflix] may take another view," said Cranswick. "US media companies tend to expect high success rates early on with international markets and if that doesn't transpire they exit."

Netflix could ultimately find that its biggest competitor in Australia is itself, added Cranswick. Australians are currently using proxies and other methods to bypass geographic restrictions and view Netflix content. If the US offer still provides better content or price, a local Netflix offer may not be as attractive, he said.

Netflix didn't respond to a request for comment.


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