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Netflix confirms Australia launch for March 2015

Netflix has already secured exclusive SVOD rights to Batman prequel series Gotham

After months of speculation, Netflix has confirmed that it will launch in Australia and New Zealand in March.

The US-based subscription video on-demand (SVOD) service announced its intentions overnight and touted its own financed series Marco Polo and BoJack Horseman as well as Dreamworks' All Hail King Julien as titles that will be available upon launch.

As first revealed by Fairfax Media in September, Netflix has also secured exclusive SVOD rights to Batman prequel series Gotham. Nine Entertainment holds the broadcast, first-run, and in-season catch up rights to Gotham. Netflix will not be able to offer Gotham until one-year after the linear broadcast on Nine.

Netflix said that it will continue to expand its content in Australia and New Zealand in 2015 to include series such as Bloodline, Marvel's Daredevil, from Matrix creators's Sense8 and from Friends creator Grace and Frankie.

"Australia and New Zealand have been a long time coming for us," Netflix director of corporate communications and technology Cliff Edwards told Fairfax Media.

"Both countries are great locations for us, we know that people have been very enthusiastic with us not in country and we hope that enthusiasm will grow when we launch in March."

Mr Edwards said Australians could expect a lot more announcements on content, as well as pricing, in the coming months.

In the US, Netflix costs $US8.99 per month.

"We've been talking to content providers for quite some time in Australia and New Zealand as we always do before we launch in a country, we don't just parachute in," Mr Edwards said.

What Netflix will be able to offer in Australia will depend on deals signed with content providers. It will not necessarily have the same offering in Australia as it does in the US or Europe.

Netflix's launch in Australia comes as Nine Entertainment and Fairfax Media plan their move into streaming with joint-venture Stan. It is understood that Seven West Media is in advanced talks with Foxtel about a possible venture. Last week, Seven chairman Kerry Stokes said the broadcaster will announce its streaming plans in the coming months.

On September 4, cable subscription service Foxtel slashed its basic cable package by half to $25 a month in what was seen by many analysts as a pre-emptive strike ahead of a launch for Netflix in Australia. Earlier this year, Foxtel also cut the price of its movie-streaming service Presto from $19.99 to $9.99.

The pay TV company is also getting ready to relaunch Presto to include television programs. Foxtel chief executive Richard Freudenstein confirmed that the renewed product would be offered to customers before the arrival of Netflix.

"It would be a good business decision to be out before Netflix," he said, while not revealing an exact date.

Mr Freudenstein said the new service would have HBO content, albeit not first-run material, so it will not include the latest series of Game of Thrones.

But it would also have shows that are exclusive to Presto and Foxtel, he said.

"In the SVOD world you can afford to have some things exclusively and you have to have a bunch of non-exclusive stuff," said Mr Freudenstein, adding that he believed no company offering SVOD would make any money out of the service in the "short-term, including Netflix".

Mr Freudenstein said Foxtel wasn't being dragged into the SVOD space, despite predicting the move would offer no immediate returns and saying the area is "going to be very competitive" and "noisy".

"If you look at our strategy, our philosophy, it's about getting our service into as many homes as possible," Mr Freudenstein said.

"We see absolutely huge growth in our core cable and satellite business. But we are realistic enough to know that that business is not going to be in 100 per cent of homes.

"There are people out there who currently go to a DVD store, they know that's closing down. They want to watch a movie every now and then, or a TV show now and then. So it's absolutely something that we're not doing reluctantly. We see it as an opportunity."

It is believed that Netflix already has a number of users in Australia who sidestep the US-based company's geoblock by using a virtual private network (VPN) to hide their location. However, using a VPN to access Netflix is a violation of the company's terms of services and it result in the cancellation of a users subscription.

Goldman Sachs analyst Christian Guerra said he expected the growing proliferation of over-the-top (OTT) viewing options in the US to be replicated in Australia.

Netflix, Hulu and Amazon are now being joined by Verizon, DirecTV, Sony and now Time Warner, owner of HBO, who are exploring OTT options.
"We expect to see competitive responses from Australia's TV broadcasters. StreamCo and Foxtel's decision to lower pricing are two relevant, recent examples," Mr Guerra said.

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