Euro-focused Netflix nears deal with Deutsche Telekom

Setting its sights on the next step in its European invasion, Netflix (NASDAQ: NFLX) is reportedly in talks with Germany's Deutsche Telekom for carriage on the company's IPTV service, Entertain.

According to a widely cited report in Germany's monthly Manager Magazin, the two sides are in advanced talks, but no deal has yet been consummated, and Netflix is also in talks with other German telecoms.

As Gigaom notes, Netflix has a number of deals with pay TV providers in the U.S. to have its service integrated into TiVo, but it does not have a pay TV deal outside the country not involving that DVR service.

Netflix now offers its services in more than 40 countries, with much of the international distribution concentrated in Latin America right now. In terms of Europe, it has entered Britain, Ireland, the Nordics and the Netherlands, and is now poised to go into Germany, France, Switzerland, Austria, Belgium and Luxembourg.

In Germany, if it were not to partner with Entertain, it would compete directly with the IPTV service, as well as Amazon's (NASDAQ: AMZN) Prime Instant Video, ProSiebenSat.1's Maxdome, Sky Deutschland's Snap and Vivendi's Watchever.

The German market is a big one for Netflix, enjoying the highest number of broadband households in Europe, with 29.1 million, according to 2013 SNL Kagan data.

As it pushes east, not everyone is looking to deal with the new competitive threat offered by Netflix by forming a direct alliance. For example, according to Austria's Kurier, Austrian public broadcast company ORF has acquired a stake in the local transactional video service Filmmit. The pubcaster reportedly wants to turn Filmmit into a business based on advertising and subscriptions.

For more:
- read this Manager Magazin story (in German)
- read this Gigaom story
- read this Reuters story

Related links:
Netflix gives 'Breaking Bad' the 4K Treatment
Report: Verizon, Netflix are behind on setting up interconnection infrastructure
Netflix's OTT position is challenged by various outside forces