Netflix growth slows in Canada

Netflix Inc.’s growth in new subscribers in Canada has slowed. The streaming service had added 510,000 new subscribers during the previous quarter ending in December, but this week, in its first quarter 2011 results, the company said the number of additions was 290,000. Overall, the company said it added 3.6 million subscribers during the quarter ending March 31, 2011, reporting a new total of 23.6 million. Of that, 800,000 subscribers are in Canada. “During the quarter, we made great progress in increasing the quality and volume of content available to our Canadian subscribers. At the end of Q1 we began an output deal with Paramount, in which all of its movies will be available on Netflix streaming just a few months after DVD release,” Netflix said in a release. “In Q2, we will continue to increase our content spending in Canada.” The company added that it intends to achieve profitability in the third quarter of 2011, and “stay at approximately break-even in Canada for a few quarters in order to further strengthen the availability of our streaming content there.” The company has been critical of the monthly bit caps that Internet service providers use in Canada and overage fees for exceeding them. In its first-quarter release, the company referred to “outrageously high” data costs for Canadian Internet customers, adding that “data caps are actually a very poor way to manage demand and limit Internet congestion.” Netflix recently changed the default streaming settings on its Canadian service to reduce the amount of bandwidth consumed per month. During an April 25 conference call, Netflix CEO Reed Hastings indicated that streaming lower quality video is not a solution. "It's a mitigator. I'm not sure I would call it a solution. It helps. I think the right solution over time is that Canadians enjoy great uncapped Internet like the rest of the developed world,” he said.

Netflix growth slows in Canada

Brief | April 26, 2011

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