Netflix has signed an important deal as it readies its streaming service for customers in the U.K. and Ireland.
When Netflix launches there early next year, the company will offer access to a wide range of BBC programs, including "Torchwood," "Spooks," "Little Britain," and "Fawlty Towers." Although the financial terms of the deal were not disclosed, the BBC content will be offered to Netflix users the day the streaming service launches overseas, the companies said.
Netflix has been signing a host of deals with content providers over the past several weeks, including Miramax and Lionsgate. However, unlike the Lionsgate deal, the BBC agreement doesn't appear to be an exclusive streaming arrangement.
Exclusivity could become a central part of Netflix's strategy in Europe. Once its streaming service launches there, the company will be taking on Lovefilm, a streaming and DVD-by-mail firm that Amazon acquired earlier this year. Currently, Lovefilm lacks many of the shows and movies found on Netflix, but that could change early next year as it tries to fend off the Netflix onslaught.
Meanwhile, back in the States, Netflix is trying to fend off its own precipitous decline. Since raising prices 60 percent on customers who rent DVDs and stream video and since temporarily deciding to spin off its DVD-by-mail operation (before an about-face), Netflix has caught flak from customers and shareholders. The issues have become so troublesome that Netflix itself has acknowledged that things must change.
"If we are unable to repair the damage to our brand and reverse negative subscriber growth, our business, results of operations, including cash flows, and financial condition will continue to be adversely affected," Netflix wrote in a Securities and Exchange Commission filing last month.
Of course, Netflix believes that it might be able to reverse its fortune by expanding to Europe early next year. Wedbush analyst Michael Pachter, however, said last month that the move will likely cause the company to lose $100 million next year. If Netflix can't fix its issues, Pachter believes that figure could rise to $250 million or $300 million.
Netflix has yet to say exactly when it will launch its streaming service in the U.K. and Ireland. However, the company does plan to offer it toward the beginning of next year.