Living overseas for three years, my family and I missed the quick turnaround and inexpensive rental fees from Netflix, America’s popular online DVD rental service. We even tried British knock-off service Lovefilm, but were disappointed that it didn’t quite have the system down like Netflix did.
It’s no surprise, then, that Netflix has chosen to expand its market. Netflix has announced that they will begin to offer streaming-only services to Canada later this year, according to The Motley Fool. With their second quarter earnings just a day away, Netflix stands poised to blow the competition out of the water yet again.
Why are Netflix customers so loyal?
Every time we turn around, Netflix is offering something new. Once a DVD rental company that depended entirely on users renting and returning films through the mail, the service now includes streaming capability through computer, Playstation 3 or Wii video game consoles, while keeping the rental price the same. Customers keep getting more bang for their buck through Netflix, and many customers (my family and I included) have left the service for a time, only to return when new capabilities are added.
What’s the big deal about Netflix’s expansion to Canada?
Until now, streaming capability was only available within the United States. This included US customers traveling or living abroad. If Netflix is able to offer video streaming services to customers outside of the US, it broadens their market and gives hope that they’ll continue to grow throughout the world. In addition, the streaming-only service prepared to launch in Canada later this year by Netflix paves the way for an equivalent package in the US (right now, streaming service is an add-on to a regular service).
The AP notes that RedBox is one of Netflix’s biggest competitors in the US – this won’t be the case among a Canadian audience base where RedBox doesn’t exist.
What does this announcement tell us about tomorrow’s earnings report?
Expect another huge bump in Netflix’s earnings report tomorrow. This announcement should foreshadow news that the company isn’t holding back, continues to grow, and plans to expand their market both in and out of the US.
The Motley Fool; http://www.fool.com/investing/general/2010/07/20/a-huge-new-market-for-netflix.aspx
The Associated Press; http://www.google.com/hostednews/ap/article/ALeqM5ilvjIUNkGD1Po05pFYE7FBcwEfwwD9H27TEO0