Netflix declared this week that its launch in the UK and Ireland reached one million subscribers in just seven months, though one analyst points out that the cost of the company’s international expansion is losing it $100 million per quarter, according to Georg Szalai in the Hollywood Reporter. At the same time, a Paid Content piece by Robert Andrews looks at just what it will take for Netflix to build enough content capital in the UK to compete with the dominant BSkyB:
Sky Movies, which has nearly five million subscribers, has exclusive UK deals with the big six Hollywood studios to show movies after the post-cinematic DVD window. Netflix’s selection is thinner, poorer and later. Netflix will need to spend heavily to unpick that lock. But its domestic U.S. track record shows it can do exactly that.
Meanwhile, the two major Chinese online video companies, Youku and Tudou, have officially agreed to a merger that stands to expand their content while cutting costs and increasing efficiency. Combined, the two entities represent an estimated 450 million online users, or 30% of the Chinese market — an astonishingly large audience, even if the percentage of American content currently remains low. Szalai, In THR:
They operate much like YouTube (NSDQ: GOOG), majoring on user-uploaded videos but doing an increasing number of deals with domestic TV show makers and global movie companies to host ad-supported and premium videos.
The upshot is that as the world gets more tightly wired and international consumers gain more and more options to watch, film and TV creators everywhere will have the potential for their content to reach a truly global audience.