French Policies Put Up Big Barriers to Netflix Entree

Although France’s subscription VOD market is relatively underdeveloped, the country’s highly competitive pay TV landscape and protectionist framework will likely make Gaul the toughest test for Netflix’s European expansion.

The No. 1 challenge is Gaul’s SVOD window — the one in which Netflix typically gets movies — at 36 months after theatrical bow.

The delayed access to new film releases could impact the service’s stock of library titles. However, French entertainment industryites are currently negotiating to tweak the sequence of rights windows (and possibly cut the 36-month span for SVOD in half) as part of the drafting of a new antipiracy law.

The other two issues Netlfix will face in France are investment quotas and higher taxes.

SVOD services that are headquartered in France and have annual revenues exceeding 10 million Euros must inject 15% of their revs in European films and 12% in French movies; in addition they have to pay a value-added tax of 19.6% on VOD sales.

Google and iTunes have been able to avoid those requirements since they’re headquartered overseas.

Nevertheless, Netflix’s David Hyman, general counsel, and Christopher Libertelli , head of global government relations, first met with the staff of French president Francois Hollande, as well as with Pascal Rogard, managing director of France’s SACD rights collection society in early December to discuss the legal conditions that would affect a Netflix expansion into France.

Netflix would have two major SVOD rivals, Canal Plus’ CanalPlay Infinity and Wild Bunch’s FilmoTV.

Both platforms have strong ties to the local film biz but neither has been able to grow in any major way because of the SVOD window locked at 36 months. A third notable player is Orange’s SVOD platform, which features exclusive first-window rights to HBO series, along with more premium content.

CanalPlay Infinity boasts 1,200 films and 1,300 series episodes and is available as a standalone SVoD service priced at 6.99 Euros per month. The platform had an estimated 300,000 subscribers at the end of 2013.

FilmoTV, meanwhile, features over 1,000 films for a monthly rate of 9.99 Euros and an OTT service, FilmoCloud, launched in September. The cloud-based service all the content and services available on the VOD and SVOD platforms, and boasts over 2,000 videos of exclusive film-related content, including magazines, introductions to films and interviews.

“We can’t compete with Netlix in terms on volume of titles and rates but we can stand out thanks to the quality of our editorial content — that makes FilmoTV different from superstores like Netlix,” said Bruno Delecour, FilmoTV prexy.

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