Netflix open to making local content, regrets unmetered data deals.

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Netflix isn’t happy about the deals it made for unmetered data with ISPs such as iiNet and Optus.

Chief executive Reed Hastings has told shareholders, “In Australia, we recently sought to protect our new members from data caps by participating in ISP programs that, while common in Australia, effectively condone discrimination among video services – some capped, some not..

“We should have avoided that and will avoid it going forward.”

“Data caps inhibit internet innovation and are bad for consumers.

“We’ve added Australia and New Zealand. In all of these markets, the internet and internet television is catching on and we’re leading competitors,” Mr Hasting said.

“We’re feeling very bullish in the long-term in all of these markets.”

But there was also good news regarding the ongoing question of whether the SVOD will produce local content.

Netflix director of corporate communications Cliff Edwards said, “We don’t come in and say ‘now, or 12 month from now, we have to have six Australian originals’. We get pitches from folks and if they’re made in Australia, or made in New Zealand or made anywhere else, the fact of the matter is they’re good stories and that’s why we pick them up.

“We’re very open and have always said we’re very open to funding originals in Australia, New Zealand, or anywhere else.”

Rival SVOD Stan has already confirmed two local productions in development.

Also in the Quarter 1 results the company advises:

We added a record 4.9 million new members globally in Q1, against our forecast of 4.1 million and prior year of 4.0 million, bringing our total global streaming membership to 62.3 million. In the US, we gained 2.3 million new members, well above our expectation of 1.8 million due to both acquiring and retaining more members than forecast. Internationally, we added 2.6 million members versus a forecast of 2.25 million due to stronger growth than expected across a number of markets. As a reminder, the quarterly guidance we provide is our actual internal forecast at the time we report.

Starting in Q2 we intend to shift some of our US marketing budget to international to take advantage of the substantial available growth opportunities. This, in the short term, drives down international contribution profits and drives up US contribution profits. We are still targeting 40% contribution margin in the US in 2020.

Our international segment was fuelled by continued strong growth across our 50+ countries as well as a successful March 24 launch in Australia and New Zealand, which adds about 8 million broadband households to our addressable market. In ANZ, Netflix benefited from high consumer awareness, a fervent fan base for original series like House of Cards and Orange Is The New Black and operator relationships with Optus and iiNet, the second and third largest broadband providers. We expect international Q2 net adds of 1.90 million, up 70% vs. last year. Later in 2015, we will launch additional markets, starting with Japan.

Source: Fairfax

One Comment:

  1. Netflix regrets tying their brand to iiNet, who screwed up by underestimate the bandwidth they would need during prime-time to meet demand for Netflix.

    Netflix has already forced ISP stop ripping off customers with small data plans. Telstra is throwing more GB at its customer to stop then switching to Optus.

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