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The next Netflix territory turns out to be 43 separate countries

Netflix this week announced a plan to expand its service to 43 countries throughout Latin America and the Caribbean later this year, offering streamin


Published: 7 July, 2011


Netflix this week announced a plan to expand its service to 43 countries throughout Latin America and the Caribbean later this year, offering streaming TV shows and movies over the Internet to TVs and computers for a monthly subscription price. Netflix has been streaming to US members since 2007, adding the service in Canada last year.

We can’t help thinking that Netflix has either missed a trick in launching next in Latin America, or has something else up its sleeve, that it isn’t ready to share with everyone quite yet. We had it down for Europe first, but Latin America is not such a bad call, as long as it has local partners.

Faultline has been saying that it makes more sense to stream in Europe next because a) there are more broadband lines there b) the average speed of broadband lines in Europe are way faster than Brazil. But also there are more local streaming efforts from broadcast catch up services.

There are a couple of things that might alter the financial equation to make Latin America preferable, first off it has lower pay TV penetration than Europe, so Netflix could become THE pay TV method in the region. And we have mentioned in the past that there are less existing video licensees for US content there and that there is more piracy in Latin America, so US studios might by very happy with a better, cheaper route for legitimate content in the South. But perhaps what Netflix is relying on is becoming one of the main reasons for installing broadband in the first place, and has signed up with ISPs, including telcos and even conceivably cable operators, as resellers. In the US cable operators are the sworn enemies of Netflix, and would never been seen hawking its products about, but the same may not be true in a country that has far lower broadband penetration and it could become the killer app.

It had better be true, because there is no sense of any network neutrality law in Latin America and if the broadband supplier is not getting its cut, it is likely that the content just won’t get through.

The issue is this. Brazil has just 16 million domestic broadband lines, although there are 75 million internet users, around half of the 193 million population. This is explained by the immense usage of mobile broadband in Brazil. Fixed line players need something juicy to offer broadband sign ups that they can’t get with mobile access to the internet, and Netflix might be their killer app.

Netflix will launch in Mexico, Central America, South America and the Caribbean offering American, local and global TV shows and movies right on the usual range of Netflix enabled devices including PCs, Macs and mobile devices, although we expect that would only be economic for mobile devices when they are within reach ofWiFi. Netflix will be offered in Spanish, Portuguese, or English.

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