Netflix lands in France as part of European expansion

The company has officially launched in France, but it faces a rough welcome.

Digital Media
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Netflix has arrived in France as part of its spread across the heart of Europe.

"[ALERTE SPOILER] On est là : netflix.fr," the company said Sunday in a tweet. (Translation: "Spoiler alert: We are here.") The basic tier of Netflix is priced at 7.99 euros a month there.

September will also see Netflix push into Germany, Austria, Switzerland, Belgium and Luxembourg. International expansion is a high priority for the streaming service as US subscriber growth has moderated as the pool of people who have never subscribed dwindles lower, compared with big markets like France and German with an ample pool of untapped potential subscribers. In the second quarter, Netflix added 1.1 million subscribers outside the US versus 570,000 new streaming customers inside the US.

Netflix sealed a partnership with the telecom unit of Bouygues SA, France's No. 3 mobile operator behind Orange and SFR, for the service to be available directly on set-top boxes as early as November. Netflix wouldn't release details of the deal. Netflix has signed other agreements with pay-TV providers in Europe, such as its deal to be on Virgin Tivo boxes in the UK. Netflix said it was in discussions with other French cable providers.

In France, Netflix will have French-language descriptions and dubbed content, but it may face a difficult time ingratiating itself in its latest market. In an article headlined: "Netflix is getting a frosty reception in France," Business Insider reported Monday that the company is facing hostility from local media over fears that it will "erode the French cultural exception."

More specifically, the French film producers' association claims that Netflix set up its headquarters in Amsterdam specifically to avoid local taxes and the requirement that 40 percent of content must be of French origin. Netflix will also face competition from French TV services such as Canal+ and Numericable. Canal+ already has rights to Netflix's popular "House of Cards" series, while Numericable will challenge Netflix by offering its own subscribers free access to hundreds of TV shows, The Wall Street Journal reported.

Shares in Netflix were down about 4 percent to close at $457.75, though shares hit their highest level ever last week after an influential Wall Street analyst issued a favorable note about the stock.

To try to make itself more welcome in France, Netflix announced in August that it will create and base an original series in the country. "Marseille," described as "an eight-episode tale of power, corruption and redemption set against the rich backdrop of the French port city," will start filming early next year and debut in France and elsewhere in late 2015.

Netflix said it expects its number of French movies and televisions shows to grow over time as it gauges content tastes there. For now, the catalog will be about the same size as that of the library available when the company launched in the UK and Ireland.

In addition to those countries, Netflix streaming is already available in Europe in Denmark, Finland, Norway, Sweden and the Netherlands. In August, market researcher IHS forecast that Netflix's expansion into Europe in September will add 5 million to 6 million new members.

The company, founded in 1997, made its first move outside the US in 2010 when it launched in Canada. According to the company's website, it now has about 50 million members in more than 40 countries.

Updated at 12:42 pm PT: With further details of launch, stock reaction.

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