Netflix in Helvetia: The on-Demand Internet Streaming Media Launched in Swiss Confederation

The competition among video applications/market for content such as Netflix, Amazon, Hulu, YouTube, and traditional television is violent. The future of distribution in the entertainment industry is almost entirely digital; competitors are fighting to get most of the market shares. While online piracy has escalated as well, video streaming activity coming from legitimate online streaming services, such as Netflix, are a good reason for TV shows/movies fans to finally (and definitely) ban pirate sites. In just one week, the American provider of on-demand Internet streaming media has just expanded its European market with 5 new countries: France, Germany, Belgium, Italy, Spain, and Switzerland.

The reason is simple. As noted by Netflix CEO Reed Hastings and CFO David Wells: “This launch into markets with over 60 million broadband households will significantly increase our European presence and raise our current international addressable market to over 180 million broadband households, or 2x the number of current U.S. broadband households”[1].

Netflix is not just a new startup founded by two guys in a garage. The company was already founded in 1997, in California, by Marc Randolph and Reed Hastings[2], and introduced the monthly subscription concept in September 1999 in the United States. Today, the company finished the second quarter with 50 million subscribers (for instance, Hulu has 6 million and Amazon 20 million). Other impressive numbers, Netflix “reported $1.34 billion in second quarter revenue, up 36.9% from the same period last year with international streaming contributing $307 million, more than double international revenue a year ago. Overall net income came in at $71 million, up from just $29 million a year ago (…)”[3].

Simply put, this California based video streaming powerhouse offers affordable way to get high quality on-demand movies and TV shows into your living room. It’s a huge catalogue of content from which you can watch (almost) anything, in one reasonable monthly subscription. If that’s the solution against online piracy, that’s another question. The model is definitely not perfect, but at least, it exists and offers the possibility to “go for legal” instead of turning to torrents and piracy. 

Let’s take a closer look at the “reasonable monthly subscription” around the world to see if Switzerland is really benefiting from the launching of Netflix: 

Month streaming plan (1 SD screen)
$8.99 ( 7 EUR)
£6.99  (8,85 EUR)
89 kr (9,65 EUR)
11.90 CHF (9.83 EUR)
7.99 EUR
$8.99 ( 7 EUR)
89 kr (9,65 EUR)
7.99 EUR
7.99 EUR
The Netherlands
7.99 EUR
7.99 EUR
7.99 EUR (tbc)
7.99 EUR (tbc)
$8.99 ( 7 EUR)
89 kr (9,65 EUR)

As you can see from the table, the highest price for one non-HD screen (SD) is in Switzerland. While the average for the up to 4 screens streaming simultaneously service (“ultra HD”) is 11.99  EUR in Europe, Switzerland hits the top again with a 17.90 CHF (14.82 EUR) monthly subscription. Comparing to a cinema ticket price in Switzerland of 15.57 CHF in average[4] (in Geneva, for instance, don’t except to pay less than 25 CHF), it’s still pretty affordable. It’s not the first time that this country is experiencing this situation. For example, the Spotify subscription is 43% more expensive than the US. Rich country, higher prices. Makes sense, right? Or not. One may ask: Why not a Netflix global price without any geographical restrictions? That’s a good question. If it’s implemented too fast around the world, it may deprived local services distributors and other right holders of licensing fees (see below with France). For instance, in Australia, up to 200,000 people are estimated to use the U.S. version of Netflix[5] (with an unblock-US account i.e. a cheap VPN subscription).  Recently, some major players (read Warner Bros, Universal, Sony Pictures, etc.) are actively lobbying for a global ban on VPN users.

In Switzerland, what’s already noticeable after the launch of the video streaming service last night (on Wednesday September 17, 2014), is that the TV Show “House of Cards” is not available. Another bad news, it is impossible to have any insight into the catalog without registering. In France, for instance, the most recent movies have at least 36 months. And Canal+ has obtained the rights for “House of Cards” at least until the third season. So forget about it too. 

Don’t get me wrong. Netflix has still a lot to offer. A lot of devices are compatible with it (Apple TV, PS3-PS4, Xbox, Samsung, Android, etc.), it’s very convenient (instant, easy subscription, good quality streaming), and you get a personalized experience based on your previously rated movies, or movies that Netflix thinks you will like. It cannot be found elsewhere! As I truly believe Spotify has changed the way we consume music, Netflix has the potential to do the same, at least in Europe, with the distribution in the entertainment industry.


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