Any film distributed to the public in New Zealand must carry a label from the New Zealand Office of Film & Literature Classification. There is no exemption for films or games.
Suppose that Netflix wanted to open an official NetflixNZ and had somehow sorted out all the rights issues with all the rights holders.
Next step is to check its film catalogue against the NZ classifications database. For any films already classified in New Zealand, they'd need to attach the NZ classification sticker somewhere to the start of the programme, or maybe in the programme description.
Digital labels for online content can be obtained from the Film and Video Labelling Body. You can call the Labelling Body on +64 09 361 3882, or email them at email@example.com.Anything not already classified for distribution in New Zealand would need to be classified.
What if a downloadable film or game is supplied from an offshore server?
While distributors may be supplying games and films from servers not based in New Zealand to New Zealand-based customers, the supply activity falls under the jurisdiction of the Films, Videos, and Publications Classification Act 1993. Restricted games and all films that are not exempt from the labelling requirements should be classified and labelled for supply to the New Zealand public regardless of the source of supply or the platform used to download the material.
If the film already has a UK or Australian unrestricted rating (G, PG, or M in Oz, U, PG, 12 or 12A for the UK), they'll issue the NZ equivalent (G, PG, or M). I do not believe classification fees apply in this case.
If the film has a UK or Oz restricted rating (MA15+, R18+ in Oz, for example), the Classification Office will review the film itself; the fees below then apply.
Classifying a DVD cost $1000 as of a couple of years ago; it's $1124.40 now. You have to fill in forms for each film and wait until it's reviewed; a 50% surcharge for urgent consideration can cut down delays. Some films are exempt from classification requirements; somebody at Netflix would need to read the legislation and decide whether particular films met the requirements.
Here's the flow chart for each film Netflix, or anybody else, would want to stream in New Zealand.
Netflix has on the order of 3000 streaming movie titles. They also have on the order of 20,000 streaming TV episodes. How many of the movie titles have already been rated in New Zealand? I don't know. Here are some of their recently rated films.
TV shows come under the Broadcast Standards Authority. They have their own classification systems for Free-to-Air and Pay TV; the same show will get a different classification on Free-to-Air than it would get on Pay TV. A watermark with the classification comes at the start of a show on television.
Would a streaming-only service providing access to TV shows that hadn't before aired in New Zealand come under the Broadcast Standards Authority's Pay TV Code or the Office of Film Classification's DVD rules? The Pay TV Code requires visual warning labels immediately prior to content, so Netflix would need to add watermarks. But, DVD box sets get OFC classification categories. I don't know whether Netflix-streamed TV series would come under the OFC's rules or the BSA's PayTV Code. I think that the latter would have Netflix supply its own ratings, but would allow NZ-based viewers to complain to the BSA were any of the codes out of line with community expectations.
I would be surprised if classification costs were the main hassle stopping Netflix from officially taking Kiwi subscribers; rights issues seem even worse. But wouldn't it be reasonable for us to start simply accepting any UK, US, Canadian or Australian film classification as good enough for New Zealand purposes?
Update: Broadcasts come under the BSA; everything else seems to be OFLC. Broadcasting means "any transmission of programmes, whether or not encrypted, by radio waves or other means of telecommunication for reception by the public by means of broadcasting receiving apparatus but does not include any such transmission of programmes:
(a) made on the demand of a particular person for reception only by that person"
I read this as saying that on-demand streaming isn't broadcasting.
Section 122 here says that distribution of restricted or objectionable publication includes transmission other than broadcasting. Section 125 makes it a strict liability offence to supply or distribute a restricted publication other than in accordance with New Zealand's classification regs. I expect that means Netflix would have hassles here, but I'm no lawyer.