Netflix dominance challenged by culture, cost overseas
Streaming service continues its global expansion as competition mounts
When Netflix launched in France in 2014, the country didn't exactly say bienvenue.
The streaming giant's arrival along the Champs-Élysées led not to the Arc de Triomphe but a collision with the "cultural exception" law -- which requires broadcasters to produce 40 percent of their content locally as well as pay extra taxes to help fund the French TV and movie industries.
The company sought an exemption, given that its headquarters isn't in France nor is it a broadcaster. Now France is finalizing a bill to force Netflix and its video-on-demand rivals -- Amazon, AppleTV+ and Disney+ -- to use at least 25 percent of their revenue from the country to fund local productions.
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A state-owned outlet and two private networks, meanwhile, are joining forces to create streaming service Salto, scheduled to launch sometime early this year. So it may not be just a coincidence that Netflix announced a new office in Paris and plans to develop 20 French-language projects as it fights to maintain dominance in the streaming wars.
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"This office is a sign of our long-term commitment to the country," Netflix CEO Reed Hastings said in a statement. Netflix is no bargain in the "City of Lights" or the rolling countryside. According to a report from Comparitech, France is the seventh-most expensive country for a standard monthly plan (at $13.72 in U.S. dollars) and eighth-most expensive for premium monthly plans (at $17.90 in U.S. dollars).
The company has 6.7 million subscribers in the country, which isn't the only nation where cultural issues have affected its business model. In some, its video library is limited as a result: Netflix grappled with censorship in Saud Arabia, for instance, after one of its shows criticized the crown prince.
And in Iran, where harsh language and nudity are not allowed, its library is only 2,301 titles, compared with nearly 6,000 in the U.S. As a result, Netflix isn't always seen as a great value.
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A basic subscription in Iran costs $7.99, a standard subscription costs $9.99 and a premium subscription costs $11.99, according to data aggregated from Comparitech. Iraq and Qatar rounded out the three countries that Comparitech identified as being the least cost-effective for basic Netflix plans – costing $7.99 for a content library that holds 2,291 and 2,658 titles, respectively.
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At the opposite end of the spectrum is Canada, where Netflix plans are most cost-effective.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NFLX | NETFLIX INC. | 872.60 | +7.01 | +0.81% |
A basic subscription in the Great White North costs $7.51 while a standard subscription costs $10.52 and a premium subscription costs $12.78; all offer much better cost-per-title ratios compared with Iran. Canada's library contains more than 4,000 titles.
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