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Netflix Expands Into Scandinavia

Monday, 15 Oct 2012 | 2:55 PM ET

Netflix is launching its streaming-only service in Sweden, as it pushes international growth and looks to move past the debacle when it split its DVD and streaming services in the U.S. last year .

AP

The video service doesn't expect the ongoing European debt crisis to have an impact on the launch, saying the company will appeal to consumers as a "great bargain."

Netflix announced in its quarterly report in August that it would expand into this new territory sometime in the fourth quarter, but the timing was unknown until now.

(Read More: Netflix: Still Worth Putting in Your Queue? )

The Scandanavian market already has established rivals, like Swedish Viaplay, which offers on-demand streaming. Viaplay has responded to Netflix's arrival by lowering its subscription price. Plus, Time Warner has said it will offer HBOGo in Scandinavia.

However, Netflix said the fact that there are rivals is proof that there's demand — 10 million plus households with broadband access. It has already had more success in competitive markets, like the U.K., than in markets with less competition, like Latin America, where it faced major challenges educating consumers and dealing with the lack of credit cards.

In its latest move, Netflix is teaming up with a powerful local partner, Swedish music service Spotify . Spotify subscribers get free access to Netflix until the end of the year.

(Read More: Netflix to Trigger the 'Chanos Rule'? )

Also, for the first time, Netflix is offering Warner Brothers movies in the earliest potential window. This is the first territory where Netflix has ever carried these movies.

It's meaningful not just because Warner Brothers is the biggest studio, but because Time Warner's CEO Jeff Bewkes and NFLX CEO Reed Hastings have exchanged sharp words in an ongoing debate over the future of entertainment after Bewkes denied Netflix access to its premium content. Bewkes famously called Netflix as threatening as the "Albanian army" and a "500 pound chimp."

Clearly Bewkes has seen the benefit of Netflix's incremental revenue. We'll see how what the Scandinavia launch of HBO Go looks like.

—By CNBC's Julia Boorstin
@JBoorstin

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.