[The following is a guest post by Rory Donald, who is writing as part of the Manatt Digital Media team. Rory is smart and passionate about the ever-shifting sands of the media and entertainment business. He writes based on his personal real-world experiences.]
Until fairly recently, traveling abroad and keeping up with my favorite TV shows while away were mutually exclusive. In my trip last month to India, I discovered that it’s getting easier and easier to stream U.S. content in foreign countries. However, availability is inconsistent. In this post, I explore two things about the state of international expansion of streaming video internationally. First, I discuss key impediments to streaming video outside the U.S. Second, I identify where the major U.S. streaming video players (namely Netflix, Amazon Prime, HBO Go, and Hulu) are available internationally (and what their plans are for expansion). To be clear, I discuss only legitimate access to U.S. content in this post (many people abroad find ways to get U.S. content illegally via a hack that looks like they are streaming content from a U.S. IP address.
IMPEDIMENTS TO INTERNATIONAL EXPANSION
International expansion is a major revenue opportunity for providers of streaming video on demand. The demand for video-on-demand abroad is significant. You can see it in the year over year growth in Netflix subscribers internationally. Netflix’s most recent annual report indicates that international membership grew 67% in 2014, and 79% in 2013.
So what are the major hurdles to tapping new subscribers abroad? In my hotel room in New Delhi, for example, I was wondering, “why can’t they just flip a switch make my show available in this country?”
A recent Variety article identifies the following major hurdles:
1. Broadband limitations in individual markets. While 78% of households in developed countries have Internet access, only 31% of households in developing countries are projected to be connected by the end of 2014 (according to the International Telecommunication Union).
2. Different devices in different countries. In many countries, mobile phones are the primary access device, and wireless services often include data consumption limits that make streaming video not feasible.
3. Varying local regulations. In China, for example, Netflix will need to get a specific state license to offer its service. In addition, many countries have specific regulations about privacy and how companies bill customers.
4. Payment systems in each country are different. For example, in some countries, customers pay for streaming content with prepaid cards.
5. Variations in copyright laws. For example, in France -- where Netflix launched last fall -- a law requires that movies cannot be made available for streaming video on demand until 36 months after theatrical release.
6. Different cultural content preferences in different countries. This speaks for itself ... in every language.
CURRENT STATE OF AFFAIRS
Below is a summary of my research regarding the international availability of the major U.S. OTT streaming services. Note that I do not address downloadable video via iTunes or Amazon, which is much more widely available, but has significant downside problems of their own, including (i) the time delay before the content becomes downloadable (time delays are deadly when your friends are gushing in live tweet about the Red Wedding in Game of Thrones), and (ii) sheer unavailability of certain premium content (e.g., HBO shows, which are never made available for download).
1. NETFLIX. According to Variety, Netflix is already the world’s biggest OTT subscription service, operating in 50 countries in Canada, Mexico, Latin America and Europe. In January, Netflix announced ambitious plans to grow to 200 countries within the next two years. In March 2015, Netflix expects to launch in Australia and New Zealand. Netflix is taking a longer and more cautious path to China.
2. HBO GO. Since HBO is a subsidiary of Time Warner, data on HBO Go’s availability outside the U.S. is difficult to find. For example, Time Warner’s most recent annual report provides data on the availability of HBO, but no separate data for HBO Go. One site, however -- hbowatch.com -- attempts to keep track of the availability of HBO Go internationally. From this site, it appears that HBO Go, or HBO Go’s content provided via a local operator pursuant to a licensing agreement, is available in the U.K., Canada, and some countries in Latin America, Scandinavia, and Eastern Europe.
3. AMAZON PRIME INSTANT VIDEO. According to a January article syndicated from the Associated Press, Amazon Prime Instant Video is available to Prime members in the U.K., Germany, and Austria. Non-Prime members can purchase movies and TV shows on an a-la-carte basis in those countries and in Japan.
4. HULU. According Hulu's website, Hulu and Hulu Plus are not available outside of the U.S., other than in Japan. The site further states: "While one of our long-term goals is to make Hulu's growing content lineup available worldwide, we don't have a timetable or any news regarding expansion beyond Hulu Japan at this time.”
Early data -- particularly from Netflix -- demonstrates the voracious appetite for U.S. television content outside the U.S. The global opportunity for U.S. travelers like me, U.S. expats, and U.S. content enthusiasts alike is right here ... right now.
Time to remove those impediments.
Tear down those walls! (Now to deal with my international data roaming bill.)
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