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November 07, 2011
Brazilian rent-by-mail and streaming operator NetMovies has signed a multi-year distribution agreement with The Walt Disney Co., giving its subscribers access to Disney movies and ABC TV shows on disc as they become available for sale at retail, and via streaming after that content debuts on premium subscription TV services.
NetMovies' subscription plans start at R$14.99 (US$8.57) a month for streaming-only or one-disc-out plus streaming (limited to four rentals a month) plans and go as high as B$64.80 a month for its unlimited three-discs-out with Blu-ray Disc access and streaming. The streaming service is available throughout Brazil but disc delivery is available in limited areas, mostly in cities in the east of the country.
NetMovies claims a library of 35,000 available movies and TV series on DVD and/or BD and a streaming library of 5,000 titles. It was established in 2004 and was most recently sold by Iseiasnet (which acquired it in 2006) on December 27, 2010 to New York, US-based portfolio manager Tiger Global Management for B$11.1m.
US-based Netflix, which NetMovies seems to have emulated successfully so far, announced in early September its own plans for rolling out streaming-only services in Latin America and the Caribbean, with service beginning in Brazil on September 5. Netflix charges its Brazilian subscribers B$14.99 a month, the same as NetMovies' streaming-only and one-disc-out plus streaming basic plans, but doesn't offer a physical disc option in Brazil and has announced no plans to introduce one.
Long term Netflix may well outdo NetMovies on the acquisition of streaming content due to its existing relationships with US studios, rapidly building list of local partners and its greater financial wherewithal. Even so, NetMovies may not lose much ground to Netflix, at least in the near term, due to the fact that:
- Netmovies offers the sort of disc-plus-subscription offer that Netflix itself used to popularise streaming in the US, as opposed to Netflix's streaming only offer. This hybrid model has a proven track record of launching subscription offers and generally gives consumers access to movies in an earlier window via disk than a streaming only proposition.
- Netflix has become relatively financially streched by its international expansion and now expects to spend the next few quarter in the red because of content acquisition, particularly breaking into the UK. This, in turn will limit the additional funds that the company can spend on further rights acquisition for Brazil, creating a window for Netmovies to beef up its content offer.
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