The much-anticipated availability of Netflix in Singapore finally comes to fruition, much to the delight of consumers island-wide, but local takeup will depend on its ability to secure content deals and compete with the market incumbents.
The US TV network on Thursday announced its "global" launch at the Consumer Electronics Show in Las Vegas, where CEO Reed Hastings said the streaming service had been turned on in 130 countries, including Singapore, India, Indonesia, and South Korea. "Today you are witnessing the birth of a new global internet TV network," Hastings said. "With this launch, consumers around the world--from Singapore to St. Petersburg, from San Francisco to Sao Paulo--will be able to enjoy TV shows and movies simultaneously--no more waiting."
Support for several languages also had been added, including Arabic, Korean, Simplified as well as Traditional Chinese. While not available in China, yet, Netflix said it "continues to explore options" for offering the service.
"With the help of the internet, we are putting power in consumers' hands to watch whenever, wherever, and on whatever device," Hastings added.
In Singapore, that would translate to a potential market where 88 percent of households in 2014 had internet access, while 87 percent had broadband, and the mobile penetration rate was 148 percent. The number of 3G subscription reaching almost 4.04 million in the third quarter of 2015. In the same quarter, the residential wired broadband penetration rate clocked 103.2 percent, or almost 1.37 million subscriptions.
Netflix has priced its service here a tad lower than in the US, offering its basic package at S$10.98 (US$7.67) per month, while its standard package, which includes high-definition video quality and streaming to two devices, is tagged at S$13.98. Its premium package is priced at S$16.98 and includes 4K video quality and streaming to four devices. New subscribers also can trial the service free for the first month.
The online TV network said it was working with Singapore's content regulator, Media Development Authority (MDA), to ensure its programme lineup remained in line with local laws. Currently, some of Netflix's original content including House of Cards, Sense8, and Arrested Development are not listed in its local inventory, but the company attributed this to rights issues.
"Most of our originals content will be available globally. However, with the likes of House of Cards, we didn't negotiate global licenses to the content and so the rights sit with other platforms," it told local broadcaster Channel NewsAsia. "We may get them back in some of our new markets, but have nothing further to announce at this time. With regards to our fully owned and produced Netflix originals, moving forward, these will all be available to every market and go live at exactly the same time globally."
Season 3 of House of Cards is available here on RTL CBS Entertainment, which can be accessed on the networks of Singapore's two pay TV operators, StarHub and Singtel TV.
Competing with the incumbents, Singapore's cross-carriage rule
Netflix's entry into the market has been largely welcomed by local consumers, who have been urging for more competition in the pay TV duopoly.
However, questions remain over how much of its current inventory will be made available in Singapore. As it is, by its own acknowledgement, the lack of global license agreements may mean Netflix won't be able to offer some programmes, while competitors Singtel and StarHub likely would have already negotiated such deals.
The good news is, Netflix likely will have more control to re-negotiate agreements for its fully-owned original content which, as it has said, will be available to every market moving forward.
It's also interesting to note that while Netflix's entry will mean serious competition for pay TV operators, Singapore's cross-carriage industry rule, though useful, will be of little use to the US streaming network.
Gazetted in July 2012, the cross-carriage rule comprised amendments made to the country's Media Market Conduct Code that mandated local pay TV operators carry each other's content on their respective network, ensuring consumers would be able to choose the platform on which to access the content. The move came after much public outcry over a price war between Singtel and StarHub for the broadcast rights of the English Premier League, which eventually pushed up subscription fees for consumers.
According to MDA, the cross-carriage rule would apply to pay TV retailers, or specified as "supplying qualified licensees" and "receiving qualified licensees".
Unlikely to be classified a pay TV operator, Netflix is probably parked under Singapore's Class License Scheme, which automatically includes internet service providers and internet content providers. It would explain why the US streaming network pointed to licensing issues as a reason why House of Cards wasn't on its current inventory.
Unfortunately, this also means Netflix could very well be muscled out of some content agreements by the market incumbents, which might have deeper pockets or had a headstart in license negotiations.
Furthermore, general accessibility may play a crucial role in its takeup rate, especially among households that are less tech-savvy and more familiar with switching on a TV set or with pay TV services. Some 962,000 in Singapore already subscribed to pay TV services, according to 2014 stats, and the population--of which 98 percent owned at least one TV set--spent 1,002 hours a week on free-to-air TV channels.
Setting up and watching Netflix on a TV screen also would require at least some technical know-how. And while the nation's household broadband penetration rate is relatively high, at 87 percent, it is still lower than TV's 98 percent.
Potential challenges aside, Netflix's introduction brings a much-needed jolt to the local market and it will be very interesting to see what the incumbents can bring to the table now that they have some real competition.