Netflix to go head-to-head with Sky

Netflix, the US streaming service, which launched in the UK and Ireland yesterday, says it will surpass the success of the BBC iPlayer and go head-to-head with BSkyB.

The leading player in the US, with 24 million subscribers, has launched its new £5.99 per month film and TV content offering for UK customers, which is said to be crucial to the company’s attempts to boost subscribers and revenue.

800,000 customers ditched Netflix last year after it increased its price, which saw its shares fall 61%.

However, Reed Hastings, the founder and chief executive, believes its UK launch represents the “beginning of an era of the internet TV”.

“The iPlayer deserves credit, but we will stand on their shoulders and build on that. Streaming is rocketing for us and the UK is very, very important for Netflix.”

British customers can now sign up to the service, which will allow them to stream films and TV content via games consoles, tablets, smartphones and internet-enabled TV sets. Netflix also offers a recommendation service based on what you have been watching and shows viewers what their Facebook friends have been watching.

Hastings claims that the £5.99 monthly cost compares favourably with Sky Movies and the cost of a DVD box set. He said Sky Movies and Sky Atlantic are Netflix’s biggest competitors in the UK (Sky has around 10 million UK customers – half of which are thought to be movie subscribers).

LOVEFiLM has recently bolstered its content offering following new licencing deals with the BBC and ITV – and has launched a cheaper unlimited streaming package for £4.99 a month – in a bid to attract potential customers and prevent existing customers switching to Netflix. LOVEFiLM has two million subscribers in Europe, mostly in the UK.

“They’ll do fine in DVD-by-post, but we’ve been doing streaming a lot longer,” Hastings said. “We have delivered two billion hours over the past three months. We’re in Apple TV, they’re not. We’re integrated with Facebook, they’re not.”

Netflix hopes that TV box sets for shows such as Man Men and Dexter will drive UK growth.

Read more.