By Christophe Firth, manager, A.T. Kearney Middle East.
1. Content is King: The old saying holds truth in the world of online video just as it does in traditional broadcasting. Netflix's success on the content side is based on exclusive rights to a few in-house hits (House of Cards, Marco Polo etc) and a well-curated portfolio of catalogue movies.
This has worked well in the the US, UK and some other English-speaking markets, and the common language across most of Latin America made expansion easier in that region. However, its library is generally not as compelling in other markets, while striking local content deals and/or producing original local programming (as it did with Marseille for the French market) will be more complex.
Until Netflix can build up similarly attractive propositions in its new markets, take-up may be slow and limited to niche segments.
The challenge it faces is that content owners will play hardball. Netflix benefited in the US from being an early mover while content owners were still figuring out their online strategies, and managed to scoop up the online rights without paying over the odds. Nowadays the rights holders are wiser to the opportunities online and will be mindful to hold onto enough of the right content for their own direct-to-customer services, as Disney has recently done in the UK with DisneyLife.
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