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Netflix, Quickflix, Lightbox, Neon: An interim market
Posted on 8-Apr-2015 16:24 by Bill Bennett. | Tags Filed under: News.

After years of waiting New Zealanders are now spoilt for choice with streaming TV. Netflix, Quickflix, Lightbox and Neon each offer a decent local catalogues at reasonable prices.

Thereís a thin line between choice and fragmentation. The most popular shows are scattered among the four services.

Customers are left with difficult choices. The good news is that buying subscriptions to more than one service is unlikely to break the bank in most homes.

Streaming TV market will change

Donít assume the market will stay this way. History suggests the online TV industry will consolidate to become dominated by a handful of global giants.

To understand how that will work look at what happened to online music distribution.

In the early days many countries had their own online CD and MP3 stores. These disappeared as a handful of global brands took control.

iTunes, Amazon, Spotify

Appleís iTunes and Amazon cater for music buyers. While all-you-can-eat services like Spotify will stream music for a subscription.

While there are notable differences between say, the iTunes NZ catalogue and the US one, the underlying service is global.

Legacy territorial rights are the main reason iTunes national catalogues have yet to consolidate into one single global list.

We can reasonably assume streaming TV and movie rights will follow a similar path.

Most likely weíll end up with a handful of services with global economies of scale.

One service is not enough

For now, if you restrict choice†to only what is officially offered in New Zealand, most viewers will need to subscribe to more than one service to get all their favourite shows.

Thatís why many users still plan to get around†geo-blocking and buy Netflix direct from the USA. The American Netflix service offers a far greater range of programmes than the authorised New Zealand version.

The backdoor route to a bigger Netflix catalogue will eventually close.

Global Mode

That could be down to local rights holders. Say the action started by Sky TV, Spark, TVNZ and Mediaworks succeeds in stopping CallPlusí Global Mode service. Their next step would be to tighten the screws on all VPN and DNS rerouting products used to get around geo-blocking.

Or it could be stopped by action at the other end of the chain. As already mentioned Netflix and other giants may negotiate global content deals with studios.

Another possibility is that Netflix bends to the studios demands and cracks down on non-US customers accessing the service by VPN and proxy services.

Thatís a matter for the studios and the distributors to sort out. It depends on which side holds the most power in these relationships.

A question of geography

The studios will only continue to carve up the world into discreet geographic units with each country having its own set of rights if they think thatís doable and likely to be more profitable. It probably isnít.

The administration cost of maintaining multiple national boundaries is high. When was anything involving lawyers ever cheap? Getting one signature for global online distribution solves a lot of problems.

What does this mean for local streaming providers like Lightbox, Neon and Quickflix? They may have a future if they can capture key niches.

Sky TV shows the way here. It continues to own the bulk of the sports programming that matters most to New Zealanders. Coliseum Sports Media has other rights and partners with Lightbox.

Fly under the global radar

There are other forms of programming that matter to local viewers but are unlikely to appeal to global distributors.

This leaves the local streaming TV players with interesting strategic options. They could partner with existing broadcasters like TVNZ or Mediaworks to build portfolios of local material or they could partner directly with producers and local studios. This means commissioning new shows aimed at New Zealand audiences.

Local players donít have deep enough pockets to compete with global scale media companies but they can outperform them locally if they do a better job of delivering the programming New Zealanders want.

?This story first appeared as

Filed under: Media Tagged: Netflix, Spark, tv

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