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French Resistance Crumbles in Netflix Debut

But company still faces stiff cable competition

Now with a French accent Photo: Netflix

Netflix broke through some heavy French telecom resistance today as it debuted its video-on-demand service in six more European countries. One of France's major telecom companies, Bouygues, announced that it would integrate Netflix in its TV set-top boxes starting in November, according to the Nasdaq news.

Bouyges' move is just the news Netflix wants to hear because its video-on-demand service counts on reliable broadband pipelines, and the set-top boxes are how French TV viewers access their programming. France's largest telecom company, Orange SA, has also signaled it would consider offering Netflix if the service is successful, according to the Nasdaq report.

This last-minute breakthrough comes amid reports last week that European countries didn't have the bandwidth to handle Netflix, an assertion flatly denied by a company spokesperson. Just to be safe, Netflix is increasing its server capacity in Paris.

The pieces appear to be coming together from a technical standpoint, but when it comes to content, there is ample French pushback.

French cable company Numericable started offering its subscribers access to a competing service today that it is calling SérieFlix. The offer includes access to 3,000 episodes of TV series, including Mad Men. The Wall Street Journal also reports that Numericable will start adding movies to its service in an attempt to blunt the Netflix rollout.

In the meantime, the country's premium cable-TV operator Canal+ is launching a new partnership with HBO and creating a Franco-American TV series. Canal+ owns the French rights to "House of Cards," which was ironically financed by Netflix, and counts half a million subscribers in France. Canal+ is also a major investor in producing French movies and is investigating pre-downloaded series and movies to counter Netflix's market share.

The French résistance to Netflix is based on widespread criticism of what commentators, politicians and film producers say is U.S. culture creeping into French society. The French are known for zealously guarding their language and culture, despite the introduction of such Americanisms as "le week-end" into the French vocabulary. To wit: a national requirement that 40 percent of content on TV, radio and the movies has to be French, which Netflix doesn't have to comply with because it is headquartered in Amsterdam.

Still, Netflix is reportedly planning to produce a TV drama called Marseille in late 2015 written by Dan Frank.

As the French tussle for control of cable content moves forward, five other European countries will be offering Netflix today. They include Germany, Austria, Switzerland, Belgium and Luxembourg.

Germany is the biggest of the lot and already offers a considerable amount of free and pay-TV, and the country is considered to be a very lucrative growth market for Netflix.

Netflix has to work within a heavy European regulatory environment no matter where they operate in the EU. Starting next year, the company can only stream films less than three years old, and it will have to pay a 2 percent tax if its annual earnings exceed 10 million Euros in France.

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