Today Netflix launches in the Netherlands
This morning Netflix opened their doors to the millions of Dutch households. For 8 euros a month Dutch users can watch an unlimited amount of movies and series. But why would we subscribe to yet another service, while downloading movies is still legal and never has been easier. Why would they select the Netherlands over other European countries and is this decision correct?
If you really think about it the Netherlands seems like a logical choice. There are roughly 7.5milion households and 90% have broadband. The download speed is globally ranked as 7th and in Europe 2nd behind Luxembourg. The population speaks and understands English very well and the movies aren’t dubbed as in Germany or French.
But on the other hand, we are known as greedy and there is a lot of competition out there. Several services already offer movies at home, for example Pathé thuis (launched by the cinema Pathé) and Video on Demand by companies as Ziggo, UPC and KPN.
Are consumers willing to pay the price? Basic television subscriptions cost between 15 and 30 euros a month. Dutch TV shows as “Boer zoekt Vrouw” and “The voice of Holland” get ratings of 4,3 and 3,7 million viewers , which is 25% of the Dutch population. Do these viewers really want to pay an additional fee, for movies which can also be downloaded in the same quality? Netflix can’t yet show the newest movies and series which just came out of the cinema, so their content will be a bit outdated.
Spotify was able to enter a similar market, the music industry, and got over 1 million users in the Netherlands, and these users turn out to be the most active users within West-Europe. Will Netflix be able to create a similar buzz which will convince consumers to try it out? Netflix sure makes things easy, your account is up and running within a couple of minutes and you can watch content on your smart-tv, computer, laptop, gaming console and smartphones. But their competitive advantage isn’t only ease of use. After a couple of movies or series Netflix will suggest what else you should watch, based on their database and other peoples preferences.
Not only will it be interesting to watch Netflix’ launch in the Netherlands from a business perspective, but also from a cultural and IT perspective. Will they be able to change the competition or will they simply pass along, unnoticed.