news Pioneering online TV and movie streaming service Netflix has given a strong indication that it has no immediate intention to launch in Australia, despite having last week announcing plans to expand to the UK and Ireland early next year.

The company, along with similar services such as Hulu, has grown rapidly over the past few years as Internet users have increasingly demonstrated their preference for online streaming services which allow them to choose what content they can watch and at what time. Netflix offers a variety of both television shows and films for consumption.

The company currently boasts more than 25 million customers in the US, Canada and in Latin America, where the company operates in some 43 separate countries. Its services are available through a plethora of platforms, including direct to modern televisions connected to the Internet and gaming consoles such as Microsoft’s Xbox 360 system.

Responding to an emailed question about any Australian plans, a Netflix spokesperson said the company didn’t comment on its international expansion plans. However, they highlighted a statement (PDF) the company made during its latest financial results briefing session last week, where it stated that after launching in the UK and Ireland in early 2012, “we will pause on opening new international markets until we return to global profitability”.

“For a few quarters starting in Q1,” the company added, “we expect the costs of our entry into the UK and Ireland will push us to be unprofitable on a global basis; that is, domestic profits will not be large enough to both cover international investments and pay for global [general and administrative expenses] and technology and development.”

Despite the comments, Netflix made substantial amounts of operating profit in the latest quarter, pulling in $821 million in total revenues in the three months to September 30 and earnings gross profits of $285 million and net income of $62 million.

However, the company’s profitable operations remain based in the US, where it has the overwhelming majority of its customers. In Canada the company now has over one million customers, and in the Latin American region, where it launched in 43 countries in September, it has numbers in the hundreds of thousands.

The UK, Netflix noted at the time, had about 20 million households, with a very high broadband penetration, although less residents paid for subscription TV offerings, compared with the US and Canadian markets. “The UK market is similar to Canada in that online piracy use is reasonably small and nearly everyone has a debit or credit card, unlike Latin America,” Netflix noted. “In general, UK ISPs do not have Canadian-style low broadband usage caps.”

News of Netflix’s lack of interest in Australia comes as alternative players — such as FetchTV, Telstra with its T-Box package and Netflix clone Quickflix have recently started to ramp up their IPTV and online movie on demand plays locally. Customers have long complained about the lack of legal streaming online film and TV viewing options in Australia, leading to what many have characterised as high levels of content piracy locally.

opinion/analysis
You can see why Netflix doesn’t consider Australia a major market — we’re too small, and there are better opportunities in Latin America and Europe. With Canada only making a small profit for the company, one can imagine it would be making even less from Australia, where the cost of bandwidth is high.

However, I do think Netflix is missing out on an opportunity. There is very little competition in Australia in the IPTV and movie on demand market right now. A major play from Netflix could grab the lion’s share of the market. Australians are crying out for this kind of service. In the meantime, it looks like it’s going to be up to players like FetchTV and T-Box, with Quickflix bringing up the rear, to try to make something happen locally.

Image credit: Netflix

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5. Forget 3DTV … buy an IPTV instead

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1. snerd
   Posted 02/11/2011 at 4:09 pm | Permalink | Reply

   So long as we have an AGVC or CVVC, used for cost-recovery for overseas data, we’ll always have these issues.

2. Jason Cartwright
   Posted 02/11/2011 at 4:10 pm | Permalink | Reply

   It’s the 20 million problem again.. let in those boats.. just as long as they bring a credit card :)

3. Insider
   Posted 02/11/2011 at 4:15 pm | Permalink | Reply

   Netflix would have to negotiate local rights to all the movies they’d want to stream – US rights are not the same. They’d also have to strike deals with local RSPs to deliver their content ‘unmetered’ and given the volume of data Netflix streaming consumes in the US I can’t see the locals rushing in.

4. Brendan
   Posted 02/11/2011 at 4:16 pm | Permalink | Reply

   A combination of “too small” combined with a market that uses volumetric pricing.

   This is the problem Quickflix will face; unless ISPs provide unmetered content, it will struggle to gain traction.

   Which is why, when people argue that 20GB and 1.5mbit is more than enough, I point to this as an example of why that might be a problem. ;)

5. Cooper Corbett
   Posted 02/11/2011 at 4:34 pm | Permalink | Reply

   This is super creepy, everytime I research a topic for a night ZDNet and Delimiter pop up the next day, I swear I was researching Quickflix last night hoping Netflix would be arriving here soon. Then this story. I was also researching Windows XP user base and today ZDNet posted a story on that. Tonight I might research the tattslotto numbers for the next week. Creepy….

   Anyway I desperately want Netflix, or even for Quickflix to be on more devices and to advertise on TV and Radio so the old parentals can actually see what it is useful for. Would be wonderful to have either on my Apple TV and iPad as well as Xbox.

   • Andrew
     Posted 03/11/2011 at 8:07 am | Permalink | Reply

     All u need us a VPN and an AMEX Card, they don’t seem to be able to track where the card was issued, works like a charm.

6. toshP300
   Posted 02/11/2011 at 4:53 pm | Permalink | Reply

   “In general, UK ISPs do not have Canadian-style low broadband usage caps.”

   err…..Canadian ISPs only recently introduced those usage caps in response to rising Netflix consumption…

7. Nich
   Posted 02/11/2011 at 5:02 pm | Permalink | Reply

   No Netflix will probably also mean no Hulu in the forseeable future :\

8. Michael Wyres
   Posted 02/11/2011 at 6:16 pm | Permalink | Reply

   This of course, doesn’t stop an Australian company from starting a service like this – don’t be so “glass half empty” folks…

9. Ant
   Posted 02/11/2011 at 7:42 pm | Permalink | Reply

   I’m already using Netflix in Australia. A VPN + a Boxee Box brings Netflix in all it’s glory to my big screen TV. All for $7.99 USD / month. Beats the hell out of all the recently announced legal streaming services coming to Australia. 300 movies on Quickflix offering. Don’t make me laugh. Netflix will destroy when it eventually comes if it is anything like the US offering. And people in America have the nerve to complain about the limited selection on Netflix. Try Australia’s legal options and come back to me.

   • Noddy
     Posted 02/11/2011 at 9:33 pm | Permalink | Reply

     http://www.theaustralian.com.au/australian-it/media-streams-spark-piracy-row-over-copyright/story-e6frgakx-1226078817583

     • Ant
       Posted 03/11/2011 at 1:58 am | Permalink | Reply

       Thanks. Never caught that. The comments on the article are more telling & informative than the shill entertainment industry front writer batting for NewsCorp.

       • John
         Posted 03/11/2011 at 1:35 pm | Permalink | Reply

         I would do the same if i watched enough tv or movies to see it as a viable option. The way i think of it is if im in court and saying “I want to watch what they stream, I pay for what they stream, those compainies pay the movie studios using my money. If everyone gets paid for the products how is what i’m doing wrong”.

     • SMEmatt
       Posted 03/11/2011 at 1:52 pm | Permalink | Reply

       I still don’t understand why restricting imports to get a higher price locally isn’t considered a misuse of market power under the trade practices act.

10. Simon Reidy
    Posted 02/11/2011 at 10:17 pm | Permalink | Reply

    Put this one in the predictable, but still highly disappointing category. It’s funny how there are all these so called “smart TVs” with Internet access in Australia now, but all that usually means is limited access to YouTube or your Picasa albums. Maybe an RSS feed or the weather if you’re lucky!

    Then there’s FetchTV, which last time I tried it, sucked. The T-Box is a giant rip-off, like everything from Telstra. And as for iTunes, does anyone seriously want to pay $7 to rent a 720p movie, when you can rent a 1080p Blu-Ray for $4, or download a 1080p torrent for $0?

    I know a lot of people that pirate movies and television shows, primarily because they can’t access them legally or cheaply (or have to wait months after the US has seen them). Until they can buy a cheap STB that streams and/or downloads HD content at a reasonable price and time-frame, the piracy will continue.

    Someone please step in and offer a service in Australia that doesn’t suck! Hopefully the NBN will be the catalyst to drive some proper innovation for IPTV services over the next few years. Otherwise VPN here I come..

11. John
    Posted 02/11/2011 at 11:51 pm | Permalink | Reply

    Another example of a wonderful american company with such short sighting it isn’t even funny.

    Why do american companies fail?

    and i’ll answer a question with a question,

    WHY DO THEY NEVER LOOK AT THE LONGER TERM?

    and to complete my post, i really want this service, i think piracy will decline in australia if this happens.

    THERES CORRUPTION HERE PEOPLE

    FOXTEL, TELSTRA, THE MOVIE STUDIOS, AFACT, ALL THE BASTARDS THAT RUN THE SHOW ARE TRYING TO FORCE THEIR OWN LOCAL SERVICES ON US KNOWING THEY CANNOT COMPETE WITH NETFLIX.

12. Jared
    Posted 03/11/2011 at 12:33 am | Permalink | Reply

    So, whats the issue?

    We have Quickflix as a close contender.

    Plus, regardless of the movies only available in Australia are concerned, the facts speak for themselves. “If people want it, they’ll get it” and that means mor piracy.

    I do not see a problem here. Quickflix are doing what Netflix is done in the US, provide streaming services and DVD by mail. If people arn’t happy with the quantity of movies, they’ll turn to other ways.

    Beides, its not like we are cut off from netflix anyway… People from AUS have proxied to US just to get Netflix. Also the fact this proxied setup, alone, seems like a hassle just for Netflix, more and more people will just choose the to download from Bittorrent alone, as its the easyist, while still getting near perfect quality.

    Thats all we want.

13. Jc
    Posted 03/11/2011 at 9:08 am | Permalink | Reply

    I’ve been using US netflix (Via VPN) for a couple of months now. This month, so far, i’ve streamed a full season of the TV show Merlin, about 3 movies (IN HD), ~5 episodes of Dr Who. I’ve used 18% of my 200gb monthly allowance so far.
    I think netflix could easily survive without being unmetered in Australia.

14. A.A.
    Posted 03/11/2011 at 9:34 am | Permalink | Reply

    I noticed Netflix has 3 trademarks here in Australia-2 registered and one “pending” according to IP Australia’s ATMOSS database.

    Competitor Hulu has also applied for trademarks locally but like Netflix won’t comment on their plans for an Australian launch.

15. Paperkrain
    Posted 03/11/2011 at 12:17 pm | Permalink | Reply

    I live in Sydney.. and I have netflix :)
    But it does cost a little bit more .. about $20 a month to run it.

    Just hire a VPN service in America :)

16. Mike
    Posted 03/11/2011 at 1:12 pm | Permalink | Reply

    If I remember correctly there are licensing fees associated with having access to FTA TV stations broadcast in the UK.

    I don’t know if it is a mandatory or opt-in/opt-out model (and the only Brit in the office who can confirm is on an RDO damn it!) but if it is mandatory it would be a big disincentive that could derail consumer confidence towards such services.

    Foxtel, FetchTV etc. are lousy, overpriced services and the introduction of a premium streaming/on demand service could potentially make a killing (especially) if first to market.

    Until then Australians continue to pirate away and nobody wins.

    • Mike
      Posted 04/11/2011 at 10:26 am | Permalink | Reply

      Spoke to the ‘only Brit in the office’ (think Little Britain) and it goes like this.

      You buy a TV, it gets registered at the place of purchase to your name, address etc.

      Those details go on a government register.

      You then pay a yearly rate which supports the BBC. Even if you have zero capability of tuning in to a station at all, the fee is still mandatory.

      They have detector vans which go up and down streets looking for unregistered TV’s.

17. Jonathan Wilson
    Posted 07/11/2011 at 7:02 pm | Permalink | Reply

    If the studios stopped their backwards 20th century thinking and offered ALL their content (not just the new content or the content they want to promote or the content that earns them the most money) through an online streaming service (including the obscure content you cant get anywhere unless you buy Foxtel and hope that some channel happens to decide to show it) and charged reasonable rates for it, piracy would drop dramatically.

    Foxtel cant compete with “free”, neither can an airing on FTA TV 6 months after the US air date or an overpriced DVD release months behind the US DVD release. But a GOOD streaming service that didnt cost a fortune, was available on ANY ISP, could be played back on a wide range of devices (set-top-boxes, smart TVs, computers, phones, tablets etc) and has a big library of content (all available on demand 24/7/365) would be able to compete with “free”. Why? Because if the price is low enough, many people will pay rather than go through the effort involved with torrents. I for one would pay for such a service if it had the content I want to get but cant and if the service didnt have the huge costs of Foxtel.

18. Ty
    Posted 19/03/2012 at 4:57 pm | Permalink | Reply

    So use Quickfilx, and if they don’t have the moive you want, then go to a video shop. Streaming movies may give you 1080p picture, but the sound isn’t as good as bluray.

19. Know It All
    Posted 04/05/2012 at 4:52 pm | Permalink | Reply

    There aren’t 43 countries in Latin America.

20. Andy
    Posted 12/05/2012 at 5:10 am | Permalink | Reply

    As others have mentioned above simply use a vpn like shown in this guide: http://vpnfreedom.com/netflix/how-to-watch-netflix-from-australia/