On first anniversary in Canada, Netflix launches Facebook integration

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In this undated file photo provided by NetFlix Inc., a representation of the Netflix one-click remote, is shown. Canadians are getting a first crack at a new Netflix feature that ties into Facebook.Netflix users will soon be able to share what they're watching with their Facebook friends, or browse through what others have liked.THE CANADIAN PRESS/AP, NetFlix Inc.

TORONTO - Netflix's controversial move to split up its DVD rental and online streaming businesses in the U.S. is linked to its success in Canada, CEO Reed Hastings said on Thursday, the one-year anniversary of the company's expansion north.

U.S. customers revolted in July when Netflix announced it would charge extra for access to both mail-order DVD rentals and online streams of movies and TV shows.

Then on Sunday, Hastings wrote in a blog post that he planned to spin off the DVD business into a separate entity called Qwikster, making Netflix strictly a streaming operation, as it is in Canada.

"We've had so much success over the last year of getting over a million users in (Canada) that that gave us confidence to bet on streaming, really focus the entire company on streaming, and to spin off Qwikster into a separate division," Hastings said.

Netflix has warned investors that it's shaving about a million subscribers off its near-term growth projections in the wake of the pricing changes — expecting 24 million U.S. customers instead of 25 million by the end of the third quarter — but Hastings said that won't affect the Canadian side of the business, including the acquisition of new content.

He hinted that "there's a lot more content still coming this fall."

"It's a bunch of new deals and it's also more content from existing deals," Hastings said, adding "there's a bunch more TV shows coming this fall."

On Thursday, he announced a new feature for Canadian and Latin American Netflix users that ties into Facebook. Netflix users can opt into sharing what they're watching with their Facebook friends, or browse through what others have liked. Friends' recommendations will appear both on Facebook and within the Netflix interface.

But there's still one wrinkle Netflix hasn't ironed out. In the case of a household with multiple users sharing one Netflix account, their viewing history on Facebook will be a bit muddled and not personalized.

"For now it's just going to show up (as is and maybe) there'll be some kids titles or maybe ... there'll be some chick flicks in your feed (that don't belong). We'll try to figure it out, eventually we'd like to be able to make it so you and your wife can have different Facebook/Netflix connections but we wanted to get the first stage done first," Hastings said.

He did say it will be easy for a user to temporarily disable Netflix sharing on Facebook if they decide to watch a film they'd rather not have their friends and family know about.

"I don't think many people will do it," Hastings said.

"Netflix doesn't have any porn.. if most people are comfortable sharing broadly then they're just going to share (everything). But it's easy enough, it's two clicks to disconnect and then watch something, kind of like incognito mode in a web browser."

Hastings also said Canadian concerns about data usage through Netflix have largely disappeared since the company implemented an optional lower quality feed.

"It's dropped off the radar as an issue, it seems to be successful for us," he said.

"The visual quality is only a hair less and of course anyone can set it to a higher setting if they want, so that seems to have taken the edge off the problem."