to launch in six European countries this year
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[May 21, 2014]
By Lisa Richwine
LOS ANGELES (Reuters)
Netflix Inc will launch its online movie and TV
subscription service later this year in France, Germany
and four other European countries, in a major push into
The other new countries Netflix will enter in late 2014 are Austria,
Switzerland, Belgium and Luxembourg, the California-based company
said in a statement on Wednesday.
Netflix previously said it planned a substantial expansion in Europe
this year but had not said specifically where. The costs of
launching in the new markets will keep the company's international
unit at a loss, Netflix said in an April 21 letter to shareholders.
The company will offer a mix of Hollywood, local and global TV
series and movies in the new markets. It plans to include Netflix
original shows such as "House of Cards" where possible, but the
company doesn't have rights to all Netflix shows in all markets.
Details on programming and pricing in each country will be announced
Netflix currently has 48 million customers for its monthly
subscription service in more than 40 countries, with 35.7 million of
them in the United States, where it dominates the subscription video
on-demand market. In Europe, the company has been operating in the
UK, Scandinavia and the Netherlands.
Germany ranks first among European countries in the number of
broadband households, with 29.1 million in 2013, according to
estimates from SNL Kagan. France is third with 24.7 million, behind
Netflix will compete with other video streaming services, such as
Canal Play Infinity from Vivendi's Canal Plus in France, and
Amazon.com Inc's Prime Instant Video in Germany.
In addition, France has a complex set of rules on when movies can be
released in different formats. The rules prohibit a film from
appearing on a monthly subscription video service until three years
after its debut in theaters, though it can be rented through a
set-top box four months after its premiere.
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Netflix's international unit is losing money as it spends to buy
content and market the service.
In April, Netflix reported a loss of $35 million for its
international segment, less than half of what it was a year earlier.
The company said its international territories at the time were on
track to become profitable this year but that its planned expansion
into Europe will keep our expanded international segment at a loss.
Netflix gets about a quarter of its streaming revenue from
international operations. The company said it expects its
international business to eventually surpass the U.S. market. The
U.S. streaming business reported a $201 million profit for the March
"We intend to continue our international expansion over the coming
years, so our near-term profits will be quite modest as we invest in
this large global opportunity," the company said in its April
(Reporting by Lisa Richwine; Editing by Steve Orlofsky)
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