Spark Broadband has signed a partnership with Netflix as they bid to become a major entertainment provider. The telco said the exclusive deal would give Spark broadband customers a subscription to the Netflix NZ Standard plan for one year when they sign up to a 24-month Unlimited Data broadband plan.
This is the first time that Netflix has partnered with a broadband provider in New Zealand.
The deal comes after the second largest ISP in New Zealand, Vodafone, saw their proposed merger with Sky TV NZ declined by the Commerce Commission. The Commission said a merger would stifle competition, especially with its premium sports content.
Commenting on the Spark and Netflix deal, Forsyth Barr analyst Blair Galpin said the deal was likely a response to the planned Vodafone and Sky merger.
"I suspect given the time of the deal and the announcement, this was in preparation of a potential approval by the Commerce Commission of the proposed merger," Galpin said.
"These sorts of deals typically are effective at two things: churn reduction, so holding your customers for longer, but also how you compete," he said.
"It is an advance for Spark over Vodafone but then it will be about how Vodafone responds to this, whether with a price discount or other offers."
According to Galpin, Netflix had always been a better option long-term for Spark compared with Lightbox, with the deal being tipped to happen last week.
"They'll be looking at what they plan to do with Lightbox going forward, Spark have confirmed they are still going to make the Lightbox investment ... but it's hard to know what that means [long-term]."
A Vodafone spokesperson said the deal was not unexpected, and Netflix worked with all telco providers.
It said Vodafone had previously offered customers a similar deal with Netflix, and currently offered deals with Sky TV.
Jason Paris, chief executive for Spark Home Mobile and Business, said by offering Netflix and its own streaming service Lightbox, it could offer customers a wider range.
"We know that our customers love Netflix and Lightbox," Paris said.
"We've just announced that Lightbox is now approaching 250,000 subscribers and we already see the popularity of Netflix in New Zealand. Around a third of the data over our broadband network on an average evening is customers streaming Netflix and Lightbox."
Paris said the announcement was a step towards Spark being the "go-to" destination for media and entertainment.
Spark chief executive Simon Moutter said the move was consistent with the company's media strategy.
"It is also consistent with our shift towards becoming a digital services provider, rather than just a traditional telco," Moutter said.
"We're growing our platform approach with a range of providers, providing a mix of digital tools to support our customers' lives."
So… what is the deal we hear you ask? Well, the team at Broadband Compare have had a look at the small print and the finer elements and it seems straightforward. A Spark broadband customer can get the Netflix Standard plan, which is usually $14.99 per month, for 12 months when they sign up to any 24-month unlimited data broadband plan.
The Spark Broadband Plans on ADSL / VDSL or Fibre cost $94.99 per month with no landline or $104.99 with a landline for unlimited data. So whilst they are more expensive than some options with the value of Netflix and Lightbox bundled in it might be a good deal if you don’t mind the 24 month contract commitment. One thing to consider is that in year two of your contract, if you want to keep receiving Netflix you are going to have to sign up and pay directly so that means an extra $14.99 a month cost. Without the Netflix offering bundled in $95 a month for unlimited broadband is relatively expensive compared to some other internet provider in NZ.
So as always… be sure to weigh up all the options and compare internet providers and broadband plans to find the best broadband plan for your needs at Broadband Compare.