Newspaper article International New York Times

Anticipation and Fear as Netflix Grows in Europe

Newspaper article International New York Times

Anticipation and Fear as Netflix Grows in Europe

Article excerpt

As Netflix starts streaming in six European countries, some politicians and rival businesses are assailing the company over issues like competition and taxes.

With Netflix making its debut in six European countries this week, the expansion of that online streaming giant's international territory is stirring a mix of anticipation, anxiety and "House of Cards"-style political intrigue.

French headlines warn of a "Tsunami Netflix" that could challenge the customary offerings of dubbed American programs and homegrown shows. German cable competitors are slashing the price of monthly subscriptions. Switzerland's largest cable operator introduced a new counteroffer and is rushing production of a sitcom about a couple approaching retirement.

The stakes are high. Europe's unified market and high Internet use have created ripe territory for American technology companies like Netflix, Amazon and Google. But as their power and reach grow, companies like Netflix are also being assailed by European politicians and business rivals over issues like taxes and competition.

The fiercest resistance to the California-based company, which has a market capitalization of almost $29 billion, is emerging in France, where, so far, telecommunications operators like Orange are refusing to carry the service on popular television-top devices that enable Internet streaming because they have not settled on financial terms. Netflix is nonetheless available on tablets, computers and smartphones.

The local film producers' association is complaining that Netflix is engaging in "fiscal dumping" by establishing its European base in Amsterdam and thus avoiding the French audiovisual taxes that national television channels and rival streaming services pay to subsidize French films.

Last spring, top French politicians joined the fray, with the culture minister calling Netflix a "stowaway" for entering the local market with a headquarters in a different country. In August, those voices vanished in a government shake-up, clearing the path for Netflix to mount a relentless charm offensive in a series of news releases and interviews with French reporters that the company flew to California.

Netflix has been gradually extending its reach in waves in Canada, Latin America, Britain and Scandinavia, and it is now available in 40 nations. Analysts are predicting that Netflix could add four to six million users in the six countries where it starts operating this week: France, Germany, Switzerland, Austria, Belgium and Luxembourg.

To demonstrate its investment in France, Netflix has announced that it has purchased streaming rights to "Wakfu," an animated French television series mingling manga and Marvel comic-book styles and featuring an orphan with supernatural powers.

Netflix is also financing the Mediterranean answer to its original series "House of Cards," the critically acclaimed political drama set in Washington. "Marseille," an eight-episode French- language drama about power and corruption, will be filmed in that southern port city and depict shady politicians, drug lords and others battling for control, according to its creators.

"It's a very Shakespearean story, and I think it can also be very universal," said Pascal Breton, who heads Federation Entertainment and is producing the series.

Mr. Breton himself has become engulfed in political combat related to Netflix's arrival when the French magazine L'Express reported that Fleur Pellerin, the new minister of culture, vacationed at his Corsican villa this summer.

In her first week as culture minister, she then shifted the government's stance on Netflix in a radio interview by calling it a "rational economic choice" to seek tax advantages in other countries. …

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