Netflix May Want to Rethink Its British Invasion

Things aren't ok in the UK for Netflix (NAS: NFLX) .'s (NAS: AMZN) LOVEFiLM has secured exclusive "second window" rights to movies from News Corp.'s (NAS: NWSA) (NAS: NWS) Twentieth Century Fox, and that's only because BSkyB, the British satellite broadcaster in which News Corp. has a chunky stake, already has the "first window" rights.

This isn't the first time Netflix has come up short in its efforts to line up compelling streaming content for the service it recently introduced in Ireland and the U.K.

In other words, Netflix doesn't just have competition in the U.K: Netflix is the competition.

This places Netflix in an unfamiliar position. In the U.S., it reigns as the undisputed service of choice. In Canada, it's been well received since the Great White North became the company's first foray into international expansion two years ago.

In Latin America and the Caribbean, though, Netflix has struggled because it's still early into its dot-com migration down south.

But across the big pond, Netflix is seemingly the underdog. The company is trying -- and failing -- to tell regulators that its competitors are too powerful.

Britain's regulatory body, the Competition Commission, concluded last month that BSkyB's deal with Twentieth Century Fox for exclusive rights to recent movie releases is fair. Netflix obviously isn't happy about that, and all of these events make it that much harder for Netflix to succeed in this particular market.

Netflix is in a bad spot. It will either have to spend a lot more on content deals to get the fresh programming that its competitors have or it will have to settle for a tiny sliver of the streaming market.

Profitability in Netflix's domestic streaming business was more than offset by losses overseas in its latest quarter. So retreating out of an international market where it's in a losing situation may be a humbling move, but it would be the right call.

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