If a new deal signed by Netflix with Lionsgate UK is any indication, it would seem that the long-rumored European launch of the popular DVD rental and streaming company finally be heading across the Atlantic.
According to a report from Deadline, Netflix has signed a deal with Lionsgate UK which is part of the Lionsgate Group, but it operates as its own entity. While the company told Deadline that it considers this speculation and they do not comment on potential expansion plans until they announce them. This news comes on the heels of Netflix announcing that it has surpassed 1 million subscribers in Canada, and it still preparing for its launch in 43 countries through out South and Latin America before the end of the year.
Back in May we were hearing rumors that Netflix would be expanding into Europe, but once the announcement of the 43 country expansion came about, we figured that plan was dead for the time being. The signing of the deal with Lionsgate UK definitely signals that this plan has to still be on the table, otherwise there is no point for the deal to have been put together. As they have done in Canada, and will doing in the newer expansions, Netflix is only launching Watch Instantly and forgoing the DVD rental portion of their businesses. Considering the recent price hike in the United States, it’s fairly obvious that the DVD portion of the formula here is also not something that they want to keep as a going concern anywhere.
While it’s great to see a company expanding like this, one has to wonder if they aren’t potentially stretching themselves a bit thin. There is the argument that they have to get into key markets before competitors can swoop in and get established before they come along, but with only one foreign country under their belt, expanding into 43 more this year, and the potential of going even further in another part of the world, you have to wonder if any company is capable of scaling this rapidly. Only time will tell if this is folly or not, but I know it would certainly make me nervous.
What do you think about the idea of Netflix expanding into the U.K. and presumably more of Europe?