Canadian Netflix growing, to be profitable in Q3

Netflix Inc.'s spending on new content in Canada is attracting members at a rate that it expects to return profits in the third quarter of this year, the company said Wednesday in a fourth-quarter 2011 earnings report. “The market opportunity in Canada is exciting enough that we continue to invest in the content library, meaning that we’ll run at roughly break even for two quarters, and we expect to return to a positive contribution profit starting in Q3 of this year, two years after our initial launch,” the company said in a letter to investors. “Our plan after that is to grow our contribution margin as we continue to grow our membership.” Netflix said that during the fourth quarter, it added movies and TV shows to the Canadian service, improving its television catalogue with content from Fox, Sony, and AMC, as well as Pay 1 film titles such as Black Swan, True Grit, The Chronicles of Narnia and others. “The addition of lots of compelling new shows and movies both drove increased hours viewed per member and member acquisition during the quarter,” the company said. Netflix subscribers in all jurisdictions consumed more than two billion hours of streaming video during the quarter, or about an average of 30 hours per member per month, the company said. During the quarter the company said it “grew faster than expected in streaming members,” increasing by 220,000 subscribers to a total of 21.67 million. The service has 21.6 million streaming subscribers in the U.S. Figures for Canadian subscriptions were not listed Wednesday. The company reported a million Canadian members in August 2011. Netflix is available in the U.S., Canada, Latin America, and launched in the U.K. and Ireland this year. “Our UK and Ireland launch at the beginning of the month was very successful, and we’re seeing faster member growth than we did when we launched Canada,” the company said.

Canadian Netflix growing, to be profitable in Q3

Briefs | 01/25/2012 11:09 pm EST

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