Netflix is Here, But Does the UK Really Need Another Television On-Demand Service?

By Bulent Yusuf on at

With a wee bit of fanfare and a few murmurings of excitement, Netflix has finally arrived in the UK and Ireland. But it is really that big of a deal? It's not as if we don't have a veritable avalanche of television on-demand services already dribbling out of our ears. Between iPlayer, LOVEFiLM, 4OD, ITV Player, Virgin Media, iTunes, YouTube and Sky, we've got all the bases covered thank you very much. Or do we?

The official line from Netflix is that they "complement" existing services, their unlimited streaming package at the low price of £5.99 per month will slot-in unobtrusively alongside everything else. It's a cheeky bit of spin, but it highlights the critical point that none of their rivals have been able to address: cross-platform compatibility.

 

One Service to Rule Them All

Y'see, Netflix have thought of all the angles, and they're playing to the strengths of each platform. A dedicated kids' channel on the Wii version of Netflix, for example, or a 360 version tweaked for Kinect with voice and motion controls. And then there's seamless integration with the Front Row menus on AppleTV, and fully functioning Apps for Android and iOS. It doesn't matter how many devices you own or favour, Netflix will rule them all.

Compare this to our humble homegrown offerings from the BBC, ITV and Channel 4. Their content is top-notch, to be sure, but they don't have the resources or the technology to roll-out onto every single media platform going. The best effort is from the BBC and its iPlayer, with a drip-feed of devices being added every couple of months. The fact that the channels are hived off into their own individual media players and are mostly non-HD doesn't help either.

 

Bye Bye LOVEFiLM?

And then there's LOVEFiLM. Whilst Netflix is launching with a pure streaming service on this side of the pond, LOVEFiLM is saddled with a physical DVD/Blu-ray rental operation along with a fledgling streaming service available on a handful of platforms. Their operational costs are therefore much higher than Netflix, and fiscally frugal parent company Amazon will be reluctant to engage in a protracted price war. Temporarily undercutting the Netflix deal with a pound cheaper streaming-only plan is likely to be the extent of their efforts.

The matter is further complicated when considering that Netflix is already available on Amazon's Kindle Fire tablet in the US, and there's no conceivable reason why it shouldn't be available on the Kindle Fire when it's launched here in due course. Dedicated media streaming is a core feature with the Kindle Fire, and that places Amazon into something of a quandary. Do they spend the money to upscale LOVEFiLM's streaming infrastructure and supplant Netflix in the UK? Or do they jettison LOVEFiLM rather than hobble the launch of their flagship product?

 

Believe in Better

No, if there's a real threat to the Netflix juggernaut, it's going to be Sky. They have the funds and the bargaining power to buy up exclusive content, as demonstrated by their deals with HBO and AMC for the Sky Atlantic channel, with top-tier television like Game of Thrones, Boardwalk Empire, and Mad Men. If Netflix is starved of this kind of content, then it will never gain the traction it needs in the UK market. Already they're lacking at least one major film studio, Warner Brothers, from their line up.

However, it's probably in Sky's best interests for Netflix to succeed. Why? Because consumers who want HD content streaming will need a fast broadband connection and no download limits, which means that physical broadband providers like Sky, BT and Virgin Media will almost certainly experience a boost in activations for their top-end packages. It pays not just to have rights on the content you're broadcasting, but also on the physical infrastructure through which that content is delivered.

Perhaps Netflix are right. Complementing existing services may well be the best approach for their business. The UK waters are muddy enough for watching TV and film online, and it will take something altogether different to move away from the current situation of content silos, outdated physical media, and incompatible media players. But whether the gamble pays off is entirely up to you, the humble consumer.