Netflix Canada cheaper than U.S. service

Charging $7.99 for unlimited movie and TV shows

TORONTO -- Aggressive?

Netflix launched in Canada Wednesday with an online movie and TV streaming serviced priced at $7.99 a month, lower than its stateside price point.

The U.S. online streaming/DVD rental giant will provide unlimited movie and TV show viewing for Canadian subscribers for a dollar less than the $8.99 paid by U.S. subscribers.

"It's the lowest and most aggressive price ($7.99) we've had anywhere in the world for unlimited movie and TV shows," Netflix co-founder and CEO Reed Hastings said in Toronto Wednesday.

And Canadians will get to view TV shows like AMC's "Mad Men" series not available through Netflix's U.S. service.

The downside is Netflix Canada will only offer the first three seasons of "Mad Men," not the latest cycle.

It's the same with Hollywood movies, as Netflix Canada's low price point hampers competition with local video stores stocked with the latest studio blockbuster releases.

"We provide a low-cost service with 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," Hasting insisted.

Netflix Canada is backed by major studio and local distributor supply agreements to lure potential Canadian subscribers.

Initial movie and TV product will come from Canuck distributors like Alliance Films, Maple Pictures, Entertainment One and Mongrel Media for its Netflix Canada service.

And the Internet movie and TV offering will also include programming from Epix-partners Lionsgate, MGM Studios and Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox and Universal Pictures.

The upstart Epix premium channel has not yet struck out for the Canadian market, so Netflix negotiated individually with its three partners for local content rights.

Hastings said Netflix chose Canada for its first international expansion because of its high broadband penetration and appetite for movie viewing.

And while local cable and satellite TV operators have been girding for competition with Netflix Canada, Hasting played down the threat to local players from the U.S. Internet behemoth.

"We're not an effective competitor to cable. We don't have sports, and the vast programming that cable has, and we're priced lower," he said.

Hastings insisted Netflix Canada at $7.99 a month would likely become a supplement to existing cable and satellite TV packages for Canadians.

Canadians will also be able to road-test Netflix Canada as part of a one month free trial.
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