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Netflix Streaming Heads North, With Some Differences

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Netflix (s NFLX) entered its first international market today, as it unveiled a streaming-only subscription service in Canada this morning. For $7.99 CAD ($7.80 USD), users can now get access to thousands of streaming titles that they can watch on PCs or one of multiple connected devices.

But there are some key differences between the U.S. and Canadian services, mainly in content that’s available and the number of devices that the service can be access on in its first international market.

First, on content availability: While Netflix says that viewers in the U.S. have access to more than 20,000 titles, only 7,500 titles will be available to Canadian viewers at launch, according to VP of Corporate Communications Steve Swasey. But Netflix did announce that it has streaming license agreements with studios like Lionsgate, (s LGF) MGM, Paramount Pictures, (s VIA) Sony Pictures Entertainment, (s SNE) Twentieth Century Fox (s NWS) and Universal Pictures (s GE). It also has struck deals with Canadian distributors such as Alliance Films, Maple Pictures, eOne and Mongrel.

Key to the launch in Canada will be Netflix’s ability to secure some popular video content for streaming, including a number of titles that aren’t available on the U.S. version of its service. For instance, Netflix has secured rights to some first-run films from Twentieth Century Fox, including (500) Days of Summer and Fantastic Mr. Fox at the same time that they are available on pay TV channels in Canada. It’s also gotten rights to TV shows like Mad Men that U.S. users can’t watch on the streaming service.

As for which connected devices the service will work on: Netflix has been hard at work getting its streaming service to a wide range of TVs, Blu-ray players, game consoles and other consumer electronics devices, and expects to be on more than 100 devices in the U.S. by year’s end. But not every device that streams Netflix in the U.S. will also stream in Canada, at least not at launch. Most notably, streaming on Sony PlayStation and Nintendo Wii game consoles will be a go, but streaming on Microsoft’s (s MSFT) Xbox 360 won’t be available until later in the fall.

Also, unlike in the U.S., where Netflix is available on a number of connected TVs from various CE makers like Sony, Netflix streaming will only be available on Blu-ray players from Samsung and Toshiba to start, with Blu-ray players from Vizio and Insignia adding the capability later on. The good news is that Netflix streaming will be available on all supported Apple (s AAPL) devices, including the iPhone, iPad, iPod Touch and the Apple TV when it launches in Canada.

Netflix will look to the Canadian market to help grow its customer base, something that it has been pretty successful at ever since launching its streaming service in the U.S. In the most recent quarter, the company announced that it had more than 15 million subscribers, which marked a 42 percent increase over the previous year.

Its focus on streaming has also been instrumental in lowering customer acquisition costs and churn, and helping the company to control its costs, as most of its cost for online content comes from licensing rather than delivery, which runs contrary to the cost structure of its DVD-by-mail business in the U.S.

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11 Responses to “Netflix Streaming Heads North, With Some Differences”

  1. The streaming only, cloud service model, lets Netflix expand to other countries much quicker without setting up the physical postal infrastructure.

    Clearly the business model has changed with the Streaming only model. It would be interesting to know how the content providers – studios and network channels are being compensated? Is it by number of downloads or number of subscribers?

  2. While I respect that Neflix has secured rights to some marquee titles and shows, for me it can’t replace my cable subscription until all the content is there, at or close to original air date.

    And if it can’t replace my cable subscription, I’m definitely not getting it in addition to cable.