Netflix Coming to Europe in 2012 – to Launch in UK and Spain

written by: Richard Kastelein

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Andrew Wallenstein and Diana Lodderhose from Variety Magazine scooped the news that Netflix is making a move towards a long-awaited European launch in 2012.

Earlier this month, Netflix said they were going to expand into in 43 countries across Latin America and the Caribbean which sent the stock flying up to $291.23 before settling at $289.63, up $21.64, or 8.1%. It's expected that Netflix will pursue an IP only strategy rather than mail order DVDs like they did in Canada - meaning that web and Connected TV devices will be the focus of deliver.

More from Variety:

Sources at leading European film distributors say as recently as last week Netflix reps confirmed plans to put roots down in both Spain and the United Kingdom in the first quarter of next year. Netflix declined comment.

The European invasion would come after the 43-country blitz scheduled to take place by the end of the year across Latin America and the Caribbean. Netflix surprised many analysts who predicted the UK would be one of the first targeted territories only to end up absent from the list released last week.

That could be a reflection of tougher competition it will find in England, from Amazon-owned Lovefilm to incumbent multichannel services like BSkyB, which may seem newly vulnerable given the turmoil that has engulfed News Corp.'s aborted attempt to grab a bigger stake in the satellite service.

Ryan Lawler from Gigom also reported on the move:

Interest in Spain and the U.K. markets makes sense, if only because by next year it will have both English and Spanish-language services in place. But unlike its venture to Latin America, where existing streaming operations haven’t taken hold, Netflix could face some stiff competition from existing services in Europe.

Lovefilm, which was bought by Amazon  earlier this year, already has a robust streaming service in place in the U.K., Germany and the Nordics (Sweden, Denmark and Norway). And the U.K. market has a number of incumbent TV services that also have a streaming component. Take, for instance, the BBC’s wildly popular iPlayer, or BSkyB’s satellite service, which allows viewers to stream live and on-demand TV over the web and to a growing number of mobile and connected devices.

Meanwhile, in Spain, there are less visible streaming competitors, which could create a lower barrier to entry. But Variety notes the market is also known for being a hotbed of video piracy. At the same time, offering a low-cost alternative is one way Netflix could possibly help studios fight piracy there.

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