Netflix: International Expansion to Follow Early Canadian Success

4:48 PM PST 01/26/2011 by Etan Vlessing

U.S. online streaming giant expects Netflix Canada to be profitable after one year in business.

TORONTO -- Netflix on Wednesday pointed to early success in Canada to justify continued international expansion this year.

As the U.S. online streaming/DVD delivery giant posted its fourth-quarter 2010 results, Netflix said its Canadian service is on track to be profitable during the third quarter of 2011, around the first anniversary of the company launching a pure streaming service here in September.

“We expect our Canadian operations to have a positive operating margin in Q3. We expect to have approximately $50 million in operating losses in international in the second half of 2011 as we expand beyond Canada,” Netflix said in a statement accompanying its latest results.

Netflix in the fall 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.

California-based Netflix did not identify which international market it will expand into after Canada.

The Internet subscription service said it expects to make money in each of its future international markets within two years, “and in Canada, we expect to achieve that in one year or less from launch.”

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