Netflix is coming to France a little too late – in more ways than one

Apr 28, 2014
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After months of back and forth with the French government, and delays internally, it seems all but sure that Netflix will arrive in September 2014 – then again, that’s what we heard over a year ago. Nonetheless, Netflix has said it will come to France, via its Luxembourgeoise subsidiary – which is not great news for the French Government, who was hoping Netflix would cooperate around digital content taxes & other regulation.

Nonetheless, Netflix doesn’t just have the French government impeding its success in France, and it may have already missed its opportunity. In negotiating with the French government, it’s given local competitors Orange & Canal+ an opportunity to tweak and prepare their existing SVOD offers, with reports saying that Orange will release a Netflix-killer product. While the company doesn’t have access to super hits like Orange is the New Black and House of Cards, Orange does have access to HBO’s Game of Thrones, as well as an audience of upwards of 30 million existing customers.

Meanwhile, there’s another startup brewing in France, that might just beat Netflix at its own game. VodKaster is set to announce next month its new digital DVD service, and while it’s not VOD but a pay-per-film service, there is an ingenuity in its execution that cannot be ignored.

Vodkaster is providing a free service to customers who can leave their existing DVDs at one of Vodkaster’s thousands of retail points around the country. Once received, Vodkaster digitally uploads them to their servers, after which you can view them as often as you want via VodKaster. If you get tired of that DVD, you can sell it on the VodKaster market place, or buy other DVDs from others on the marketplace. Given that digital goods don’t depreciate in value (although films get less interesting over time, I suppose), you can imagine buying a DVD for 5€ and viewing it, and then reselling it for 5€. Vodkaster gets a cut on both sales, so ultimately you’re out maybe .50€ on that transaction.

The other interesting part of Vodkaster is that they aren’t subject to SVOD content regulation, because they are using DVD licensing and not VOD licensing. Concretely, this means that 12 months before a movie is available on Netflix you’ll be able to stream it on VodKaster. That’s a huge blow to Netflix, who will have films that are up to 36 Months old in France (normally 24 months; however, there is a loophole that allows TV channels to buy a 12-month exclusivity on distribution of a film).

A recent study about Netflix’s brand recognition in France showed that only 11% of French citizens know what Netflix is – most of those 11% probably only know Netflix via Pirate Bay or VPN’s for now. The question is whether the Netflix ecosystem is sticky enough to pull people away from other (read: better) services. VodKaster will have up to 7 months head start to woo French film-watchers. Will it be enough time?