Dutch Ramp Up VOD Offers Ahead of Netflix Launch

DOWN: Reed Hastings

Less than a year ago, the Netflix chief's stock was at $285 a share. On July 30, it closed at just $57.75 thanks to slowing domestic growth and the high cost of expanding overseas.

The online movie and TV service is expected to bow in the Netherlands Sept. 11, just ahead of the International Broadcasting Convention.

BERLIN -- Dutch broadcasters and pay TV operators are stepping up their on-demand and online services to shore up the defenses ahead of Netflix's launch in the territory, expected on Sept. 11.

Free-to-air broadcaster RTL Netherlands has taken a majority share in The Entertainment Group, owner of Dutch VOD service Videoland, giving it a beachhead in the online streaming market. The Entertainment Group claims to be the largest provider of online film content in the Benelux region with VOD deals with both major and independents. RTL is expected to unroll a new all-inclusive subscription service, which will include unlimited streaming, in the territory, likely around the International Broadcasting Convention (IBC), the TV and tech-industry event kicking off in Amsterdam Sept. 12.

Just ahead of that, on Sept. 11, Dutch journalists have been invited to a Netflix event in Amsterdam whose guest list includes company CEO Reed Hastings and Dutch actress Famke Janssen, the star of Netflix’s original series Hemlock Grove. Netflix, which has said the Netherlands would be its next international territory, is expected to make the news official then.

Rumors that Netflix planned to launch in the Netherlands started months ago, when Netflix began advertising for job openings in the area.

Pricing details aren't clear yet, but most estimates put the fee for the new Dutch service at between $10.50 (€7.99) and $16.00 (€11.99) per month, depending on how many devices a customer has hooked up to Netflix Netherlands.

Netflix declined to comment Monday.

But that isn't stopping local competitors from gearing up. Cable group UPC Netherlands, part of John Malone's Liberty Global group, has announced plans to take its hybrid Horizon service, launched at IBC last year, into the cloud, putting it in direct competition with Netflix. Liberty Global is rolling out Horizon in the other 11 European territories it operates, including Germany, the U.K. and Poland. Horizon TV in the Netherlands has a little under 200,000 subscribers.

The second-largest Dutch pay TV operator, Telco KPN, has been aggressively expanding its fiber optic network to build on the 1.15 million Dutch customers who already receive its online services. KPN hasn't announced plans for new VOD services, instead hoping its multichannel offerings -- online and off -- will keep customers from hoping ship. Of course with more Dutch homes getting faster broadband service, perhaps courtesy of KPN, the potential market of Netflix customers in the country also gets bigger.

As of July, Netflix had nearly 38 million subscribers worldwide, but only a small fraction of those -- 7.75 million, according to figures in the company's second-quarter earnings report -- are from oversees territories. After an initial burst of expansion activity, launching in dozens of international territories in 2011-12, Netflix this year pulled back on its global rollout, citing high costs.

While the VOD service has successfully established itself in territories such as Canada, where it has around 2 million subscribers, things have been slower going in many territories due to infrastructure issues and competition from powerful incumbents.