The Netflix French love affair: company executives fight against VOD monopolies

Dec 12, 2013
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The love affair between Netflix and France has been fiddled with mistrust and a few bumps on the road. Fortunately – for consumers – the overly popular American video streaming service might be arriving to France very soon. Being present in 41 countries worldwide, it sounds strange that Netflix is not available in the French market. Although the company has been trying to enter this market for some time, the IP & licensing aspects have been keeping it from entering the country.

As with any disruptive service, we often see how the legal framework is not adapted to the fast paced changing environment, and France’s protective legal system are both one of the country’s strengths and weaknesses. To Netflix, the biggest challenge is to work around the lifecycle of films (the period after which films can be rented/viewed at home after being released in theaters). We had previously covered how odd it was that consumers could rent a video trough their set top boxes at home 3 months after theater release, but to watch it through a paying video streaming service, the film would only be available 3 years after its theater premiere. Strange right?

Interestingly enough, Canal+ has been offering unlimited VOD through their set top boxes for some time now, making them the biggest VOD service provider in France. Amazon itself has managed to enter the French market with their European brand Lovefilm to provide unlimited VOD, but since they partnered with Canal+ to provide their content, it’s easy for them to abide to the life cycle limitations of films. At the end of the day, Canal+ has been making a lot of money in the VOD business, while Netflix has been forced out of the party – which attracted a lot of pressure from abuse of dominant position from Canal+.

After struggling to come around this scenario Netflix executives have met with the Elysée in what seems an impending launch in France for early 2014. This meeting might as well mark the end of Canal+ monopoly over video streaming services, and not surprisingly, Vivendi shares dropped 3,8 percent immediately afterwards. For consumers, this is great news. After all, the rules made to protect them and the French cinema industry have done more harm than good in protecting their interests.