The growing popularity of Netflix has some heavyweight tech companies like Amazon.com, Google Inc. and Sony Corp. showing interest in the lucrative online streaming game.

But what effect will it have on Canadian television watchers?

Industry observers say competition for Netflix’ international turf is inevitable given its runaway success in Canada, which has an estimated 4.5 million paid and trial subscribers.

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And they believe that as more competitors dip their toes in the lucrative on-demand programming waters, it would only increase the choice and availability of offerings -- which for Netflix is much more limited in Canada than it is on its U.S. home base.

“It won’t eat into the traditional TV-watching market, but it will put pressure on pay-TV services here,” said media analyst Aravinda Galappatthige of Canaccord Genuity.

“The more options consumers have, the more targeted they will be to go into these over-the-top services,” he said.

Netflix Inc., the world’s largest subscription streaming service, said Wednesday its fourth-quarter profit rose more than fivefold, beating analysts’ estimates as its domestic video customers rose. Domestic subscribers, including free trials, rose to 33.4 million.

Chief executive Reed Hastings’s strategy of offering unlimited Web viewing of movies, TV shows and original programs for $7.99 a month is financing the company’s international expansion.

Now it’s on Amazon.com’s radar. The world's largest online retailer, which has approached U.S. media companies to acquire rights for an online pay-television service, according to people with knowledge of the situation.

The service would expand on the Web retailer’s Prime Instant Video subscription service by offering live programming similar to traditional pay-TV providers, said the people, who asked not to be identified because the talks are private. Amazon reportedly began reaching out to media companies in recent weeks.

The Seattle-based behemoth is the latest U.S. company planning Web-based pay-TV businesses to challenge existing cable and satellite providers. Sony this month said it will offer an online service. Verizon Communications said Tuesday it will introduce a nationwide plan with technology acquired from Intel, expanding beyond its existing FiOS territories.

That, analysts note, could in turn prompt companies such as Comcast Corp., Time Warner Cable Inc. and AT&T Inc. to use the Web to expand from current geographic franchises and spark a national free-for-all for subscribers.

It’s still early days, and it’s unknown to what extent they would enter the Canadian market, observers say.

But potential competitors can’t just offer an identical version of Netflix because current subscribers would be unlikely to switch to a similar service, said Ira Wagman, associate professor of communications studies at Carleton University.

“That straight-ahead, no frills service is refreshing to people, which is why others are trying to jump in,” said Wagman.

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“The fact that it’s spurred on some competition is probably a good thing, but they are going to have to be different, better, more expansive – not just a copycat service,” he said.

Galappatthige doubts there would be any difference on the flat monthly fee since the price point is already pretty low, even on top of cable.

Due to complicated licensing roadblocks, Canadian Netflix offers roughly 3,600 television and movie titles compared to the U.S. service, which has more than 10,000 as of last November. Other entrants would have to face the same reality.

For instance, Netflix often finds a program or movie it wants is already licensed to someone else in Canada. But industry observers note the growth of the popular service is increasingly putting pressure on content producers to simplify licenses, reduce wait times and put the web first.

There are about 12 million households in Canada that subscribe to cable, and many of the 4.5 million paying for a monthly Netflix subscription or on the current free trial are the same customers who want that extra downloadable content, analysts say.

With files from The Star’s wire services

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