Hastings: ‘We Fell A Little Too in Love with Pure Streaming’

Netflix CEO credits Canadian market for encouraging international expansion

If Reed Hastings could express in song his disastrous strategy for splitting Netflix into separate businesses for streaming and DVD in 2011, he might choose a little ditty from “South Park: Bigger, Longer and Uncut.”

“Blame Canada.”

In a keynote address Tuesday at the Canada 3.0 conference in Toronto, the CEO credited the success Netflix had in the country for leading him to be overeager to adjust the company’s course in the U.S. market. Canada was the first market in which Netflix abandoned its DVD component to focus on an Internet-only approach.

“For us, it inspired us that this pure streaming business was very possible,” Hastings told attendees, paving the way for Netflix to copy its Canadian strategy in 38 other countries around the world.

“The down side is that we got so excited about pure streaming that we split our U.S. business,” he acknowledged. “So we fell a little too in love with pure streaming but then we recanted and recovered in the U.S.”

Hastings reserved much of his remarks at the conference about his philosophies regarding entrepreneurship. But he did a little tubthumbing for Netflix original programming, with the premiere of “Arrested Development” just 10 days away.

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