I heard Brent speak - he talked about any country they look at needing to have three things:
2: Good data limits or unlimited data
3: Local content rights.
We've got 1 sewn up. He told me that's not always the case - quite often they find a market is well served by multiple providers already and the only way in is via a price war which they're not keen on. No problem with that here.
Number 2 is trickier but as you say, local CDN distributing content locally makes sense. Incidentally, the speech was sponsored by Kordia which owns Orcon which owns a vastly under-used CDN platform.
However he did say on one slide that the average US Netflix customer will be downloading 1TB/month next year. Local transit costs are cheaper than international but short of basing it at a peering exchange there's still going to be a cost (anyone know what we're talking about there money wise?).
Number 3 is clearly the sticking point - Sky TV has a lot of TV rights, most of the sport and now has a deal with TVNZ. It also has no need to offer video on demand as the govt won't look at regulating the industry at all and sees no problem there. It also has a long term lease on rights on the satellite so again, no need to look at the UFB as delivery model any time soon.
I wouldn't rule out local pressure on Netflix to come over however. I don't mean from users, I mean from the telcos who are desperate to be able to offer video on demand and can't get anything up and running legally.