Netflix gets in market, on demand

The online streaming service formally announced its entry into the Canadian on-demand TV and movie market today, offering subscriptions for $8 and locking in distribution deals with Canadian producers.

The trumpets have sounded. The battle is on.

Netflix has launched a Canadian movie and TV series subscription service at $7.99 a month, in competition with Canuck broadcaster and cable websites lately ramping up their free on-demand content.

And the result has Netflix and other internet streaming players shelling out even more money for Canadian content.

‘If we’re willing to write cheques for content, we can get [it]. There’s no problem in principal, because we’re willing to license content,’ Netflix co-founder Reed Hastings said Wednesday on the availability of Canadian rights for popular movie and TV fare.

Netflix Canada already has content supply deals with Canadian producers like Lionsgate, Alliance Films, Maple Pictures, Entertainment One and Mongrel Media, as well as stateside deals with MGM Studios, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox and Universal Pictures.

Hastings said Netflix targeted Canada for expansion a year ago on the basis of its high broadband penetration and movie consumption.

And the US online streaming/DVD delivery giant in August agreed to pay nearly $1 billion annually to premium channel Epix in a five-year deal covering online rights to films from Canadian mini-studio Lionsgate and partners Paramount Pictures and MGM.

As Epix has not yet marched on the Canadian market, Netflix negotiated individually with Lionsgate, Paramount and MGM for the Canadian rights to their content.

The result is Netflix Canada will offer the first three seasons of Lionsgate’s Mad Men, while the popular AMC drama isn’t yet available through Netflix’s US service.

Also in the Netflix Canada lineup is the first five seasons of The Trailer Park Boys and animated series from Nelvana like Babar and Franklin.

Hastings said the strategy of Netflix Canada is to offer the most content at a low $7.99 price point to sign up as many Canadian subscribers as possible after a one-month free trial period.

‘It’s the lowest and most aggressive price we’ve had anywhere in the world for unlimited movies and TV shows,’ he said.

That said, the bulk of Netflix Canada’s offerings will be library titles, not the first-run TV shows on CTV, Global and Citytv, or the latest DVD blockbuster releases at the corner video store.

For new product, Netflix Canada looks to be waiting to build up its subscriber base north of the border, and then write bigger cheques for newer content from its suppliers.

‘We provide a low-cost service with a vast selection of movies and TV shows. But for the newest new [movie] releases, within a week of DVD releases, that would be extremely challenging at this low price point,’ Hastings explained.

Here the Netflix boss pitched his $7.99 online movie and TV service as a bicycle to local broadcast and cable giant’s cars, and that Canadians may want to have a bicycle and a car in their garage when it comes to living room viewing.

Hastings would not be drawn for comment on rivals like Rogers Communications and Bell Canada earlier reducing their bandwith caps for subscribers on news that Netflix was to enter the Canadian market.

‘You’d have to ask them why they (cable and phone companies) are doing certain things. But over 30 years, the internet will just grow and grow. There will be pricing and caps, but it’s hard to hold back the technology,’ he said.

Hastings added that Netflix codes its content offerings to help guard against subscribers bumping up against bandwith caps with their movie and TV show consumption.

Netflix Canada will also not seek programming exclusivity. ‘It’s fine when it’s distributed on appointment TV and it’s fine when it’s distributed over us,’ Hasting said.

Netflix is also betting that Canadians will already have reception technology to receive the new online video streaming offering, to Nintendo’s Wii, Sony’s PlayStation 3 and eventually to Microsoft’s Xbox 360 console, to Blu-ray disc players and iPhone, iPad and iPod Touch platforms.

Netflix Canada will be available to Canadians initially only in English, as the US company is taking its time to line up the rights to French-language content.

From Playback Daily