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Netflix, Inc. (NFLX) Closes Office in France, Opens in Netherlands

Netflix, Inc. (NASDAQ:NFLX)

Netflix, Inc. is reportedly closing its Paris office and is moving its all operations to the Netherlands. It seems that the streaming isn’t winning in the French market, where it launched two years ago. According to the rumors, the online streaming giant has been facing problems in France due to local content, Variety reported, citing an unidentified source.

France is Tough Market

Netflix launched its service in France two years ago. The company has its European headquarter in the Netherlands but it opened its office in France to win trust of the French industry and build strong relationship with the industry players.

Netflix, Inc. (NASDAQ:NFLX)

The anonymous source told Variety that the streaming company has a small office in Paris and it’s loss-making in France. The source rejected the speculations that the company is leaving Paris due to heavy VOD taxes. The report notes that Netflix will continue to pay VAT of 19.6% on VOD sales in France.

Netflix, Inc. was unable to get local content, mainly due to a strict window release schedule which makes new titles available only 36 months after their theatrical releases. The streaming company is struggling to feed its pipeline with fresh local content despite signing distribution deals with all but one of France’s telco operators. Moreover, France is a tough market due to the strength of French TV networks and pay-TV channel Canal Plus, according to the report.

In last February, Xavier Albert, who was managing director at the Netflix Paris office, left the company to join Universal Pictures France. The company did not replace him.

Netflix in Europe

Netflix conducts operations for its other European territories — Germany, Italy, Spain and Scandinavia — from Amsterdam. Upon its launch in France, the streaming company faced a resistance from the French industry players who believe that the Netherlands-based company would not be subject to the same tax regime and investment obligations as local streaming and SVOD services such as Wild Bunch’s FilmoTV and Canal Plus’s Canalplay.

To gain trust of the French industry, Netflix promised to invest a percentage if its revenue in European and French movies if its annual revenues exceeded 10 million euros ($11.3 million). The company decided to open a Paris office to build ties with French content-makers, filmmakers, producers and sales agents. The company was also planning to cut deals with local telco operators in order to reach French households via set-top boxes.

Futuresource Consulting estimates that Netflix had roughly 750,000 subscribers as of last September.

Netflix was able to deliver only one original French-language series, “Marseille,” a political thriller with Gerard Depardieu and Benoit Magimel. Recently, the company acquired Houda Benyamina’s Cannes Camera d’Or winning directorial debut, “Divines” from Film Boutique, and Brazilian helmer Kleber Mendonça Filho’s critically acclaimed sophomore outing, “Aquarius” from Paris-based SBS Films.

In other news, Netflix, Inc. is making its way to more hotel rooms worldwide. The company in partnership with Enseo reached an agreement that will make the video streaming app available to users in more hotel rooms around the world. During the second quarter, Julian Robertson’s Tiger Global Management dumped its entire stake in the streaming giant, selling about 18 million shares.

If you’re thinking about buying Netflix stock, you should check these stock trading apps.

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