Netflix and Canada a foul mix: Customers face 20,000% markups on overage fees as streaming video devours data

Posted by Knowlton Thomas

Canada is typically perceived as a friendly country, but it hasn't been nice to Netflix since the company offered its services north of the border last fall.

Michael Oliveira points out in the Toronto Star that strict download caps in Canada make it difficult to enjoy Netflix content at length:

Some lower-end high speed accounts offered by Canada’s large ISPs include only 25 gigabytes of downloading a month, the equivalent of about 12 hours of Netflix viewing in high definition. And that’s without accounting for any other data usage while web surfing, checking email, playing online games or other downloading.

Netflix CEO Reed Hastings isn't happy, and he doesn't think many Canadians realize how tightly screwed on these caps are. According to the Canadian Press, in a recent conference call Hastings said that “it’s something we’re definitely worried about; my sense is . . . many of them [consumers] don’t understand their plan and it will take a billing cycle or two for them (to figure it out)."

And that's bad news, considering how brutal overage fees are: while it only costs internet providers roughly one penny per gigabyte (a cost that is actually decreasing), they charge excess gigabyte rates at around $2 per GB - a roughly 20,000 percent markup, making even pay-as-you-go texting profits a drop in the bucket.

Either the overage costs need to be slashed big time, down to somewhere between 5 and 50 cents depending on the plan's specific conditions, or the caps need to be doubled, if not tripled, so Canadians can consume content without worrying about paying ludicrous fees. (U.S. caps are up to 200 gigabytes, approximately eight times as high.)

But as it stands now, no matter how much more content Netflix adds to its library, the $8-per-month "unlimited" streaming will never truly be unlimited. And Netflix, for now, can do little against this brick wall.

Source: The Star

Company:
Netflix
Website:
http://www.netflix.ca
Location:
Los Gatos, California, United States

With more than 15 million members, Netflix, Inc. [Nasdaq: NFLX] is the world’s largest subscription service streaming movies and TV episodes over the Internet and sending DVDs by mail. For $8.99 a month, Netflix members can instantly watch unlimited TV episodes and movies streamed to their TVs and computers and can receive unlimited DVDs delivered quickly to their homes. With Netflix, there are never any due dates... more


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Knowlton Thomas

Knowlton Thomas

Knowlton is the managing editor of Techvibes. Based in Vancouver, Knowlton has been published in national publications and has also appeared on television and radio. Previously he was an editor for New Westminster weekly The Other Press and served on its board of directors. When not working, Knowlton enjoys playing tennis, hiking, and exploring weird side streets. more



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