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Netflix Bows Canadian Streaming Service

22 Sep, 2010 By: Erik Gruenwedel

As expected, Netflix Sept. 22 formally launched a monthly subscription-based streaming service that allows Canadian users to stream movies and TV programming for $7.99 (Canadian) per month.

The venture, which does not include disc rentals or streaming content from pay-TV service Epix or Starz, marks Los Gatos, Calif.-based Netflix’s first international expansion.

Canadians can sign up for a free, one-month trial at www.netflix.ca.

“With our launch today in Canada, Netflix is focused on adding meaningfully to the entertainment choices available to Canadian consumers,” said company co-founder and CEO Reed Hastings, who was in Toronto for the inauguration of the service.  “Convenience, selection and value are at the heart of the Netflix service, and it is our hope that this resonates with Canadians.”

Richard Greenfield, analyst with BTIG Research in New York, said the dearth of quality fare available to the Canadian service underscores Netflix’s dependence on content from Epix and Starz (which includes Disney).

Indeed, notable TV programming appeared to center around episodes of “Heroes” and “Mad Men,” while movie fare included (500) Days of Summer, My Life in Ruins, All About Steve, Fantastic Mr. Fox, Slumdog Millionaire, Superbad, and The Notebook.

“We believe the lack of content in Canada illustrates how important Netflix’s deals with Starz and Epix are in the U.S., as they clearly supply the most important content to Netflix’s streaming service,” Greenfield wrote in a post. “In turn, we continue to believe Netflix will need to retain Starz (beyond the current contract, which ends in October 2011) at a dramatically higher annual licensing fee.”

Separately, in a twist, Amazon, which for years was rumored to be in the hunt to acquire Netflix, has reportedly made an offer to buy out Lovefilm, the online disc rental service in the United Kingdom that Amazon already owns a 42% stake in, according to The Sunday Times. In 2008, after failing to establish a disc rental service in the United Kingdom, Amazon sold the nascent business to Lovefilm, which is now reportedly valued at about $300 million.

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