McLeans Magazine - The end of channel surfing, thanks to Netflix


(5-Aug-10) For Canadians, the idea of watching television or movies over the Internet has not yet caught on in a big way. And that’s partly because there has so far been relatively little on the Web for us to watch (many popular U.S. sites like Hulu.com are blocked to Canadian surfers to protect licensing deals with Canadian broadcasters).

But now one company—an American one—is hoping to finally shake things up north of the border. Netflix, which built its U.S. business on mail-order DVD rentals and generated US$1.4 billion last year, is planning to launch a television and movie streaming service in Canada this fall, its first effort at international expansion. Details are scarce, but spokesman Steve Swasey says Net?ix plans to offer Canadian consumers a “robust” selection of TV shows and movies, though he declined to say how many titles would be available and how much the service would cost per month (U.S. customers pay US$8.99 for unlimited mail-order DVD rentals and streamed videos to their computers). “Streaming is really going to be the way of the future,” says Swasey, who adds that Netflix doesn’t plan to offer a DVD mail-order rental service in Canada.

As a well-known U.S. brand, Netflix represents the first real threat to the dominance of Canada’s traditional cable and satellite companies. An “all you can eat,” on-demand subscription service with desirable content would offer a promising alternative to existing pay-per-view services—particularly since Netflix has deals with makers of video game consoles and Blu-ray players that allow its content to be streamed directly to consumers’ flat-screen TVs. That’s in contrast to existing online services like Apple’s iTunes, which sells downloadable TV shows and movies that typically remain stuck on people’s computers (Netflix also has an agreement to stream content on Apple’s iPad). Netflix’s proposed service is “something that would really be disruptive in this market,” says Jayanth Angl, a senior research analyst at Info-Tech Research Group.

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