Broadband operator approached about distribution deal
PARIS — Stephane Richard, CEO of Orange, France’s leading broadband operator, confirmed in an interview with a Gallic radio last week that Netflix had approached with a potential deal for distribution.
“I think they want to launch in the fall (in France),” he said in the March 7 interview.
Richard disclosed Orange hadn’t signed anything yet, as it was “too premature.” He added Netflix was still considering different distribution routes.
Asked about Richard’s remarks, a Netflix rep declined comment.
If true, Richard’s projection squares with Netflix CFO David Wells’ comments last week at an investor conference suggesting the company would begin adding more European markets in the second half of 2014, though he didn’t identify which ones. France has been anticipated to be one of the first markets on Netflix’s list, though there are some significant obstacles to entering what is otherwise considered a plum market for expansion.
French reports have indicated Netflix was interested in being distributed via Orange, which counts over 10 million Internet subscribers in France and also operates a pay TV group.
Orange would be a logical partner for Netflix. The other two leading broadband operators in France — SFR and Bouygues Telecom — are linked to French TV groups that perceive Netflix as a potential rival: SFR is owned by Vivendi, which is the parent company of pay TV giant Canal Plus, while Bouygues owns TF1, France’s top TV network.
“Considering the wide array of low-costs TV packages from the telecommunications groups available in France, Netflix would be advised to consider striking partnership deals similar to those which it has made with Com Hem, Virgin Media and Waoo, to take advantage of the scale of existing sector players,” said Richard Broughton, head of broadband at IHS Screen Digest.
French industry insiders have said Netflix will likely be headquartered abroad like Google and iTunes in order to be exempt from paying a high value-added tax and investing in local content.