Netflix reports that during first quarter 2011, only 290,000 Canadians subscribed down from 510,000 in the previous quarter ending December 2010. Netflix also reported the total number of Canadians currently subscribed was 800,000.
Reading a report on the National Post, they seem to think that the bandwidth caps are hurting Netflix growth in Canada. While I have to agree that the bandwidth caps will have an impact on digital media moving forward, the decline in growth has little to do with Usage Based Billing the CRTC tried to introduce earlier this year.[pullquote_right]“During the quarter, we made great progress in increasing the quality and volume of content available to our Canadian subscribers. At the end of Q1 we began an output deal with Paramount, in which all of its movies will be available on Netflix streaming just a few months after DVD release. In Q2, we will continue to increase our content spending in Canada.”[/pullquote_right]
That said, Netflix has nailed it. The reason for the slow growth is definitely the lack of content. Canadians have many choices for content and although a minority are happy with the content Netflix provides, the majority feel the monthly cost does not provide enough new material.
We feel Netflix may do their best to provide fresher content to Canadians, but with a majority of the licensing locked up such big companies as Rogers, CTV, Shaw, and Quebecor to name a few, this will not be an easy task.
Where do you think digital media is heading? Are consumers becoming too confused by too many options?