Netflix Canada Won’t be Profitable Until Q3 2011

Netflix seems to be quite happy about its foray into the Canadian marketplace with it’s streaming only service, but admits it will be a while before it becomes profitable.

During it’s fourth quarter earnings call, Netflix announced it has surpassed 20 million subscribers with a net profit of 41.7 million dollars. But Canada hasn’t been profitable just yet.

“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 launched in Canada this past September with mixed reaction. While many Canadians were excited the service was finally available, they were disappointed to see the selection was not on par with what was available south of the border.

The company says it is making content a priority across North America and claims content will only improve as the subscriber base grows.

Netflix admits it faces many challenges in Canada. Cable companies have recently bolstered their online content and are not ready to give up the rights to shows. Internet providers are also looking at capping usage which Hastings admits is a major concern.

[Netflix]