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Has the Netflix horse bolted?

Last week's announcement by Telecom that they'd be launching a new online TV service was very interesting and I've already written a column on the subject.

The more people I talk to about this issue, the more I realise that Telecom's offering is almost certainly going to be too-little, too-late.

This was confirmed by the comments which appeared on this Stuff story on the weekend. It would seem that there are already a *lot* of Kiwis already using VPNs and Netflix here in NZ.

Even here in the timber-town of Tokoroa, a surprising number of the people I've asked have said they are either already using or have plans to use Netflix in preference to SkyTV or renting DVDs.

Perhaps the writing is on the wall for the "old school" and grossly over-priced broadcasters.

I seriously believe that it's already too late for anyone to come in with a product that will compete with Netflix -- they seem to already have reached a critical mass within the NZ marketplace.

Pretty soon, that growth will become exponential...

Regular Kiwis will drop around to a friend's place and they'll watch something on Netflix. Their first comment will probably be something along the lines of "Wow, you get all this for under $20 a month?"

Kiwis being what Kiwis are, "those who have" will be more than happy to help set up the systems of "those who want" and, in a surprisingly short space of time, Netflix will become the leading source of TV content in this country.

Sure, there will always be a market for free to air broadcasts but honestly, if you were to ask the average bloke or bloke-ess whether they'd pay $20 a month to get rid of all those crappy ads, I think many will say "yes please!". That's effectively what a Netflix/VPN subscription does.

So how will Sky, the FTA channels and ShowMeTV respond?

I expect a huge amount of pressure will be placed on government to start regulating access to VPNs.

Undoubtedly we'll be told that only criminals, paedophiles and terrorists really need VPNs so they should be banned or heavily regulated (by way of permits or "authorities to use").

Based on casual observation, it would seem to me that far too many of our politicians are in Sky's pockets (perhaps they have shareholdings or are looking forward to their honourary board seats on retirement from parliament) so don't underestimate the chances of laws being passed to support the monopoly pay TV provider.

For its part, Netflix will come under pressure from the likes of TV3 (who have licensed some of their content) but I have a sneaky feeling that if the they were serious about blocking NZ subscribers, they'd have already done so. Chances are that it suits Netflix to have (eventually) a million or more Kiwis directly subscribed to the service since it will be worth far more to them than the paltry sum TV3 pays for program rights.

Sky TV knows that it can't compete on a value-basis (and doesn't want to -- because that would bite into its very healthy profits). Just as several other companies (including Sky City) have discovered that some governments are more than happy to barter with the rights of the public -- I suspect we'll see a great deal of backroom dealing going on between Sky TV and our politicians.

In the meantime -- keep using Netflix. Tell your family, friends and neighbours about it.

If enough Kiwis sign up and use the service then it will become very difficult for any government or commercial entity to take it away.

Yes, this horse has well and truly bolted. Woohoo!

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