Netflix On Demand Streaming Service Coming To Canada Fall 2010

by Sudha Krishna | July 19, 2010 at 03:45 pm

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Netflix Launch In Canada Signals Seismic Shift In Canadian Media Industry

The popular on-demand TV and Movie streaming service, Netflix, is coming to Canada.

Hulu Plus, Not Available In Canada

Canadian Netflix members will be able to instantly watch a broad array of movies and TV episodes right on their TVs via a range of consumer electronics devices capable of streaming from Netflix, as well as watching on PCs and Macs.

In addition to representing its inaugural international market, Canada will also mark the first streaming-only service promoted by Netflix.

This is the first expansion for Netflix outside of its home base in the United States. At first, content will only be available in English but Netflix said it will be adding French language services soon after the launch in the autumn of 2010.

Though Netflix does provide DVD deliveries in the USA, in Canada, Netflix will be a "streaming only service."

The news of Netflix's launch in Canada should have Canadian broadcasters and the cable and tele-communication companies that own them, worried.

Netflix provides an on-demand service for high quality TV shows and movies without the high cost and hassle of paying for channels, and channel bundles that cable companies offer.

Other companies like Hulu Plus, Apple iTunes Video all operate in this space, all are gradually eating away at the revenue model of cable companies.

The market in the USA for these services is small but growing fast, very fast - the people who are making the shift to watching TV content online are sometimes called cord cutters. Right there are an estimated 600,000 cord cutters in the United States with that number expected double in 2010.

Cord cutters don’t yet represent a serious threat to the $84 billion cable/satellite/telco TV access industry, which counts an estimated 101 million subscribers. But they are a leading indicator of the shift to TV viewing on the Web. The cord-cutters make up less than 3 percent of all full-episode viewing on the Web. The rest comes from people who are only beginning to watch occasionally online. An estimated 17 percent of the total weekly viewing audience watch at least one or two episodes of a full-length TV show online. Last year, that percentage was 12 percent, and next year it is forecast to grow to 21 percent.

Plus, Netflex delivers content to multiple devices including iPhone, the iPad, Xbox, Mac's, PC's and of course flat screen TV's.

But all these on demand streaming services have been unavailable in Canada, until now.

Canadian broadcasters rely for much of their profits on U.S. television shows bought usually every year in Los Angeles.

Telecommunication companies like Roger's, Shaw, and Bell all own Canadian TV stations of one kind or another, and they too want to deliver that content, and deliver it to multiple devices just like Netflix but they are big ships often slow to roll out easy-to-use innovative products and services.

Judging by Netflix's services which I have tried in the USA, Netflix is smaller, more agile, and more in tune with customer needs than bulky, plodding cable and TV companies in Canada.

The TV companies should be particularly worried after all, they are completely dependent on U.S. television shows for the majority of their revenues - revenues that are dependent on an old terrestrial model that simply made money by running Canadian advertisement against U.S. sitcoms, dramas, and movies within Canada.

For decades it has been like that for media executives in Canada - But some American TV shows, run some Canadian spots against them - and count the cash.

Increasingly, that model is being challenged.

If media executives don't figure out how to adapt in this fast changing market the product their peddling on TV may well be available elsewhere online, on mobile, on TV, directly streamed from the United States, with a level convenience and cost that may have Canadians the cutting cord on domestic cable companies thereby cutting the cord on the entire Canadian Media Industry.

That sort of seismic shift won't come in the form of a dramatic earthquake rather the change will occur like erosion over time.

No, the answer is not to complain to the CRTC to keep Netflix out of Canada.

Netflix has an Canadian email sign up form for Canadians interested in receiving its streaming service.