Here we go. This week, Netflix (NASDAQ:NFLX) is opening up its largest round of European expansion. France opened its streaming door on Monday, to be followed by the German-speaking markets of Germany, Switzerland, and Austria on Tuesday or, perhaps, Wednesday. Belgium and Luxembourg close out this epic expansion assault later this week.
Packages start at eight euros a month in France. Luxembourg, Belgium, and Germany are likely to land at the same price point. These prices are largely aligned with existing Netflix plans across Europe, though Nordic customers who don't trade in euros tend to pay a little more.
News outlets in Germany and France have been skeptical regarding Netflix's chances to make waves in these countries. "Too late in Germany?" ponders German newspaper Deutsche Welle, underlining the presence of several strong video players. These options are mostly traditional linear stations, and not on-demand binge-watching havens like Netflix; but Germans still tune in to scheduled hits by the millions.
Moreover, Germans aren't overly fond of credit or debit cards. Netflix had to come up with new systems for billing German customers via direct bank transfers, instead.
Bald wird sich etwas ändern. https://t.co/uCu3j2Arm8— NetflixDE (@NetflixDE) September 12, 2014
"Life before Netflix," this strangely epic video Tweet starts. "Soon, things will change," it ends.
In France, regulations demand that a certain percentage of each broadcaster's content must be French-made. Netflix has already announced one original series to be shot in France, based on entirely French themes. Marseilles, as the political drama is titled, will be broadcast in all of Netflix's territories; but it's the origin that matters this time. Even so, French politicians decry Netflix's potential to undermine homegrown French culture.
Furthermore, Germany and France are different from previous Netflix exploits in that these consumers expect films and TV shows to be dubbed into their native language. In Latin America and Scandinavia, American and British material usually hits the screen with nothing but a string of subtitles. Netflix is taking the time and effort to provide French and German audio tracks to most of the movies and shows headed into these territories.
Given all of these challenges, Frank Sinatra might have felt right at home with Netflix's European expansion effort. "If you can make it there, you'll make it anywhere," he'd croon.
Then again, they said the same thing about beating back the piracy subculture and entrenched on-demand providers in the Nordics, too. Now, Sweden is reportedly the fourth largest Netflix market, serving nearly 20% of Swedish households.
Netflix has overcome many large challenges in its rocky history. I believe that the company is equipped to deal with this round of threats and unexpected setbacks, as well. All in all, current shareholders shouldn't get down on these short term bumps in the road.