Italian IPTV provider Telecom Italia has reached an agreement to add Netflix video streaming service to its TIMvision set-top box. In Spain, two telcos, Vodafone and Orange, are considering distribution agreements with Netflix.
Netflix is scheduled to launch its streaming service in Italy, Spain and Portugal in October 2015. The service will launch with a selection of original content, and a library of local and international content. Members will gain access to Netflix Original feature films, with announced titles including Beasts of No Nation, Crouching Tiger, Hidden Dragon, The Green Legend, and The Ridiculous 6. Netflix will be available at launch on a number of connected devices including PCs, mobile devices and smart TVs, game consoles and set-top boxes.
Netflix’s deal with Telecom Italia to allow consumers to access the service via TIMvision’s set-top box is a part of an increasingly common strategy for Netflix to extend and maximise its reach through strategic partnerships with local operators. Netflix is collaborating with local players in several European markets: Deutsche Telekom in Germany and Bouygues Telecom in France, Com Hem in Sweden, Virgin Media and YouView in the UK. With those kind of partnerships Netflix is further establishing itself as ‘premium online channel’, bringing complementary services to pay TV operators’ propositions and opened to creating synergistic partnerships with market incumbents. The partnerships with an established pay TV player may provide Netflix with number of benefits, including potential access to a customer base that is ready to pay for video services, seamless integration into living room entertainment ecosystem, as well as potential collaboration in marketing activities to help both parties to control the marketing spend, which has traditionally been a significant component of the online video player's cost-base.
Telecom Italia reported 350,000 subscribers to its TIMvision services, including IPTV customers with TIMvision set-top boxes and standalone SVoD subscribers. TIMvision customers pay €5 a month for access to TIMvision and extra €45 for the box. In order to be able to access Netflix via TIMvision set-top box customers will be required to buy a separate subscription to Netflix (from €7.99 for a basic pack).
Potential partnerships with Vodafone and Orange would bring Netflix 784,000 and 129,000 potential users, respectively. Vodafone currently has agreements in place in both the UK and Germany to distribute Netflix via its mobile platform. In Spain, where the company is branded as Vodafone with ONO, the digital cable infrastructure should support the deployment of a Netflix application should an agreement be reached, however there will remain the question of STB hardware compatibility. Orange has a much smaller addressable television audience in the market however with 3.3 million fixed line and 4G subscribers across Orange and its fixed line acquisition Jazztel, there is certainly a sizable addressable market.
Uptdate: On September 1 2015, Vodafone announced that Netflix will be made available to Vodafone TV customers via their existing set-top box. Customers will also be able to access their subscriptions via mobile devices. In the past Vodafone has not excluded streaming video services from consumer data allowances.