The other issue facing Netflix is one of market saturation. There is only so much that a cheap subscription service can grow in an existing market. Netflix has passed most of the potential barriers of cost and access that would prevent potential American subscribers from signing up. In 2013, Forbes estimated that approximately 30% of American households were subscribed to Netflix. In 2017, RBC estimated that 55% of Americans regularly watched Netflix. These figures suggest that Netflix would need to look outside the United States in order to continue its expansion.
Netflix began its rollout, starting with regions geographically close to the United States. It broke into the Canadian market in September 2010, and reached into Latin America, Central America and the Caribbean the year following. Between 2012 and 2014, the company expanded into Europe. It made a beachhead in the United Kingdom, Ireland and Scandinavia, before reaching into the Netherlands and from there into the rest of Europe. As of January 2018, Netflix is available everywhere in the world except for China, Crimea, North Korea, and Syria.
Naturally, these two objectives dovetailed into one another. Netflix not only sought to expand its reach geographically, but also to broaden its appeal to international consumers by offering content not available from local distributors. It should be noted that the very first “Netflix Exclusive” television series was the Norwegian series Lilyhammer, which launched in January 2012. International content had always been part of Netflix’s brand and identity, one enabled by the company’s capacity to cross geographical borders and to provide users around the world with access to content that could be produced anywhere in the world.
Of course, Netflix’s expansion into Europe has been met with cynicism and mistrust by the established industries. There was a minor controversy at Cannes in May 2017, when the company opted to screen Okja and The Meyerowitz Stories in competition. The Netflix logo reportedly prompted loud boos from the crowd. Part of this was down to Netflix’s refusal to release such films in French cinemas, in large part driven by a requirement in French law Netflix would have to wait three years before making such films available on its screening service. This was obviously not a viable alternative for Netflix, who are committed to day-and-date rollout across the world.
There is concern with Europe that Netflix may take away income and attention from national distributors and providers, without providing income to initiatives to fund art within Europe. A lot of this is down to the fact that the European Union laws regulating streaming companies like Netflix were written in 2010, years before the company expanded on to European soil. By 2016, it was estimated that the video-on-demand market within Europe was worth €2.5bn. Hrvoje Hribar of the Croatian Audiovisual Center protested of Netflix’s aggressive expansion into Europe, “We are facing a cultural and business holocaust.”
This is undoubtedly an exaggeration – certainly the casual use of the word “holocaust” in the context of European Cinema feels in bad taste. However, there are reasons to be concerned. Film and television production within Europe is often enabled and abetted through initiatives overseen by the European Union, particularly co-productions between member states. In September 2016, the European Audiovisual Observatory reported than an average of €2.59bn per year of public funds had been allocated to productions between member states. Feature production is a huge part of that investment – 40.9% of that money is allocated to film production for the European Union in general, with that figure rising to 53.9% if France is taken out of the equation.
CinÉireann / February 2018 59