The Netflix cat is out of the bag

Netflix is going to launch in March without several flagship programs -- because it sold the local rights to Foxtel. It's a mistake the US streaming video giant is unlikely to make again.

The cat is out of the bag, Netflix is coming to Australia on March 31, but it launches without several flagship programs -- because it sold the local rights to Foxtel. However, the US streaming video giant has vowed to never make the same mistake again.

While Netflix was keen to court Australian journalists at CES in Las Vegas last week, it wasn't keen on answering tough questions or divulging a launch date and pricing. It only took 24 hours for the details to leak Netflix is reportedly coming to Australia on March 31with three-tiered pricing starting at $9.99 per month.

The challenge for Netflix is that it's taken so long to come to Australia that the online rights for many shows have already been snapped up. It launches at the end of March without its own hit series House of Cards and Orange is the New Black, because this season's Australian rights were sold exclusively to Foxtel.

Launching into a competitive new market with your prize stallions in a competitor's stable isn't exactly ideal. The streaming giant has learned its lesson, with Netflix chief product officer Neil Hunt ensuring that global rights were secured for new Netflix Original Marco Polo, along with all other Netflix-commissioned titles going forward.

"These odd licensing relationships won't last forever," Hunt says.

"Scenarios such as the case of Foxtel and House of Cards will become an historical footnote. Increasingly we will be relying on original content that we own worldwide."

Netflix has signed some high-profile deals for a strong Australian launch, such as the global streaming rights to Batman prequel Gotham, but that doesn't mean it will be able to offer episodes online the day after they screen on Australia's Nine Network. Nine has the Catch Up rights to Gotham, offering it online the next day, and Netflix will have to wait at least until the entire season has screened. As such, Netflix is more of a competitor to Quickflix, Stan and Presto Entertainment rather than to FreeviewPlus and the networks' various next-day Catch Up services.

A VPN blacklist

Netflix is keen to emphasise that the Australian streaming service will not merely be a subset of the US library, which many Australians already sneak into via various geo-dodging methods. The Australian service will have some programs that aren't available in the US and might even be able to negotiate better deals on some shows.

For example, Netflix UK had the right to screen Breaking Bad only one day after it screened in the US. There's even talk of Netflix possibly commissioning original Australian content.

Hunt also insists that Netflix isn't cracking down on Australian geo-dodgers who bluff their way into the US service. It maintains a VPN blacklist, in order to protect the interests of rights holders, but has no plans to bolster its defences or change the way it processes foreign credit cards.

In some ways Netflix's Australian launch will make it easier to sneak into the US service, as Australians will be able to pay in Australian dollars and then use the same geo-dodging tricks to switch between the US and Australian libraries.

After a rough-housing from Australian journalists Netflix did crack down on VPN questions, but it was keen to talk about the move to High Dynamic Range streaming. At CES Netflix announced partnerships with LG and Sony to stream enhanced video to their top-of-the-line LED and OLED televisions which boast superior contrast to display more fine detail in the highlights and shadows.

HDR is only available on a handful of Ultra HD Netflix Originals titles for now, such as Marco Polo. Streaming in HDR demands roughly 20 percent more bandwidth, pushing a 4K Ultra HD stream from 15 Mbps to 18 Mbps. But thanks to Netflix's adaptive streaming HDR won't just be limited to Ultra HD streams, sometimes Netflix may drop back to lower resolutions or bit rates but retain HDR to boost the picture quality.

"White areas which are completely washed out on a typical television, perhaps like a cloud or a reflection, will have more more detail in them on a HDR-capable television playing HDR content," Hunt says.

"It makes the picture come to life and appear almost 3D… it's probably far more noticeable to the average user than the move from Full HD to 4K." 

It will take time for Netflix to wrestle back Australian control of its Netflix Original content but, with Ultra HD streaming and the benefit of HDR, Netflix has certainly thrown down the gauntlet to Australian video services when it comes to picture quality.

Adam Turner attended CES as a guest of LG.

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