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Canadians Like Netflix, CEO Hastings Loves Europe

22 Sep, 2014 By: Erik Gruenwedel

Netflix has become the most popular video streaming service in Canada, accounting from 30% to 40% of downstream traffic during primetime evening hours, according to new data from Sandvine, the Waterloo, Ontario-based technology company. Three years ago, Netflix accounted for 13.5% of evening traffic in Canada. The SVOD pioneer launched service in Canada on Sept. 22, 2010 — its first foreign expansion.

By comparison, Sandvine said no other over-the-top (OTT) video service accounts for more than 1% of primetime traffic, which it said could make Canada a candidate for the introduction of new streaming options, including Amazon Prime Instant Video. In the United States, Amazon Prime, Hulu, and HBO Go account for almost 7% of peak downstream traffic — well behind Netflix at around 33%.

Meanwhile, peer file-sharing still represents more than 15% of total fixed network traffic on many Canadian networks, while in the U.S. it is below 10%. Notably, Canadians love to stream live hockey action, with data from a Canadian operator showing some the recent Sochi Olympic men’s hockey games accounting for more than 35% of traffic. Netflix doesn’t stream sports.

Separately, more than 25% of downstream traffic on mobile devices is generated by social networking apps Facebook, Instagram and Twitter. YouTube is the single largest source of mobile traffic, accounting for more than 20% of downstream traffic. Despite longtime availability of Netflix on portable devices, the SVOD service remains a favorite on traditional TV.

Netflix, which just concluded a six-nation service launch in France, Germany, Belgium, Switzerland, Luxembourg and Austria, plans further European expansion into the south and east, CEO Reed Hastings told the CTAM cable marketing summit in Copenhagen Sept. 19. Hastings said those plans would be finalized and announced in 2015.

“Our pattern for the next few months … we’ll spend a lot of time in France and Germany trying to learn, improve and adjust. Then we’ll decide next year to either expand more in southern Europe, [or] central and eastern Europe,” said Hastings, as reported by Advanced-Television.com.

Interestingly, Hastings said 66% of subscribers stream TV shows, underscoring the service’s focus on licensing original and third-party episodic content; not movies.

“We continue to invest very heavily and are betting on future growth throughout the world in terms of membership. So we’re relatively high-leveraged, not financially, but in terms of content cost and content commitments,” he said.

About the Author: Erik Gruenwedel

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