Amazon, Netflix must go local for Euro growth

Netflix and Amazon are driving OTT penetration in Europe but international SVOD players in the region need to focus on local programming in local languages for growth, according to analysts.

A lack of local content is a potential brake on growth for Amazon Prime Instant Video and Netflix, said Stephanie Char, western Europe analyst at Pyramid Research.

“OTT players should focus on domestic content and local languages to boost the uptake of their services and revenue,” Char said.

“Content is vital to any successful paid video service. However, linguistic diversity in the European markets has posed a challenge to OTT service providers. The lack of availability of foreign content in local languages limits market penetration for international OTT players.”

Pyramid, in its new report on SVOD in Europe, notes Netflix has started to move into local originals in the larger western European markets.

The US company’s international offerings still largely comprised US content, but The Queen in the UK, Marseille in France, Dark in Germany, and an unnamed project with Bambu in Spain are local-specific projects in western Europe.

Amazon, meanwhile, has UK original The Collection and a German original, Wanted, in the offing.

In central and eastern Europe there is widespread scepticism about whether the TV markets are large enough to justify SVOD local production, and the regional channels and operators have been dismissive of Netflix.

Research house Pyramid added that 4G penetration is driving OTT growth in Europe.

“The availability of fast fixed and mobile next generation networks has significantly changed video consumption habits in Europe, driving mobile video, on-demand video and multi-screen viewing,” Pyramid said.

It expects 4G connections to reach 66% of total SIM cards in western Europe and 29% in CEE by 2020.