September 30, 2010, 12:56 PM

Netflix expands into Canada, but botches the launch

The retailer paid extras to talk about the service, leading to charges it tried to mislead reporters.

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Netflix Inc. didn’t make the best first impression with its northern neighbors last week when paid extras at a launch event in Toronto talked up Netflix’s service to the media in attendance, setting off a storm of criticism that Netflix was paying to plant positive buzz about its service in the media. A Netflix spokesman says the extras received improper directions and that their talking with news media wasn’t part of the launch plan.

The company hired the extras for a corporate video it was filming at the launch event, wrote Steve Swasey, Netflix vice president of corporate communications, on the Netflix blog.

“Simply put, we blew it,” he wrote. “We didn’t intend to mislead the media or the public, and we can understand why some have raised questions. We’re sorry that our misfire has given Canadians any reasons to doubt our authenticity or our sincerity.”

News of the perceived ruse spread on Twitter and overshadowed much of the mainstream media coverage of Netflix’s first service expansion beyond the United States. A headline in the Toronto Star read “Netflix stumbles as it launches in Canada.” The Globe and Mail led with the company’s apology and published online the handout given to the extras. The handout instructed extras to act as members of the public who came across the launch event and to “look really excited, particularly if asked by media to do any interviews about the prospect of Netflix in Canada.”

Netflix’s Canadian offering features its video-streaming service to TVs and computers, not DVD rentals by mail. Content is delivered only in English, although the company says it expects to add French capabilities in the future.

Netflix Inc. is No. 14 on Internet Retailer’s Top 500 Guide.

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