Netflix is about to become an official competitor in the Israeli television market. Television market sources inform "Globes" that Netflix is currently translating and adapting its interface for Israel, and is buying local content and translating very large amounts of foreign content.
Netflix recently acquired the rights to broadcast the US Seinfeld television series, which it will broadcast exclusively, and also acquired the rights to broadcast Fauda, an Israeli series produced by DBS Satellite Services (1998) Ltd. (YES). Content market sources said that the fact that Netflix was buying enormous quantities of content was affecting the prices of content in general.
The introduction of a locally adapted version of Netflix into Israel is likely to upset the local market, because Netflix is a strong international brand likely to attract quite a few customers if it successfully combines local content and foreign content that it is already producing.
Netflix currently broadcasts only on the Internet for $11 a month. The company began its broadcasts to Israel as part of its expansion to other countries outside the US. Television companies are already reporting that they are having difficulty in translating foreign series, because Netflix is very active in translating very large quantities of content.
The big question about Netflix is the immediate threat that it will pose when it enters with a Hebrew-language interface and translated content. Even though it is a niche player, it is likely to take customers away from all the television players, and could very well have a major impact on Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR), which is planning to enter the television market in the coming months. The other players are already preparing for this development (Yes is about to launch a narrow Internet package at a reduced price, and Hot Telecommunication Systems Ltd. (TASE: HOT.B1) is also planning to respond soon).
Netflix's big advantage over Yes and Hot is that as a foreign company broadcasting on the Internet, it is not subject to the broadcasting regulations and is not required to produce local content (and does not pay VAT) - a very weighty factor vis-a-vis the older players. Assessments are that the company will enter the market within two months, and is probably not planning a local office at this stage, other than perhaps a public relations office.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 20, 2017
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