Netflix launches streaming video service in Canada

Wed Sep 22, 2010 1:36pm EDT
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By Alastair Sharp

TORONTO (Reuters) - Netflix launched an online video-streaming service in Canada for films and television on Wednesday, its first foray outside the United States and a direct threat to established cable companies.

Adding another content distributor to an increasingly congested market, Netflix said it will offer unlimited streaming of movies, documentaries and TV shows for C$7.99 ($7.81) a month.

Consumers will be able to stream video to compatible TVs or Internet-connected computers. Video game consoles such as Nintendo's Wii, Sony's PlayStation, and devices such as Apple's iPhone and iPad will all be able to stream from Netflix.

"It's disruptive clearly, but with a few limitations," said Dhai Ghose from Canaccord Genuity. He said the relatively low cost, decent content supply and ability to watch on multiple platforms would pressure incumbents such as cable and wireless company Rogers Communications but a lack of sports coverage and newly released films may limit the damage.

"Initially, people will scale back their video on demand usage because it's much cheaper," Ghose said. "Over a period of time it could be a substitute."

Netflix said it has signed licensing agreements with studios Lionsgate, MGM, Sony, 20th Century Fox as well as Canadian distributors Alliance Films, Maple Pictures, eOne, and Mongrel.

Netflix Chief Executive Reed Hastings downplayed the threat to established cable operators at a launch event in Toronto.

"We're not really an effective competitor to cable because we don't have sports, we don't have the vast majority of programing that cable has," he said. "We're like a bicycle compared to their car."   Continued...

<p>Netflix Chief Executive Officer Reed Hastings speaks during the launch of streaming internet subscription service for movies and TV shows to TVs and computers in Canada at a news conference in Toronto, September 22, 2010. REUTERS/ Mike Cassese</p>