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Summary:

Expansion into the Southern Hemisphere is proving more costly and time-consuming than Netflix anticipated. But the company has made another significant content investment in the region, bringing 24, Glee, How I Met Your Mother and other Fox TV shows and movies to Latin America.

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You can now stream hit Twentieth Century Fox -produced TV series including How I Met Your Mother and Glee in Portugese and Spanish within 43 Latin American countries. You can watch Fox movies like Wall Street and Office Space, too … provided you have the broadband capability.

That latter component is a major infrastructural issue as Netflix continues to aggressively expand its Latin American streaming operation. Only 20 percent of Brazil’s 42 million internet users, for example, have a connection speed above 500 kilobytes per second, according to a report released last year by Ibope Nielsen Online. But it takes a speed of around 800 kilobytes per second to stream movies.

Also read: Why Netflix can still win

Still, despite significant hurdles like this one, Netflix announced yet another major Latin American pay TV content deal, bringing Fox’s series and movies into the region’s streaming portfolio.

Under the agreement, all past seasons of Fox-produced TV shows including  24Prison BreakThe X-Files and Arrested Development will be available for viewing beginning July 15, as well as current and past seasons of How I Met Your MotherGlee and Bones.

In addition,  Fox films including Gentlemen Prefer BlondesWall Street and Office Space will come to Netflix on July 1, with more films and TV series to be added over the next few years.

In its first-quarter conference call with investors on April 23, Netflix CEO Reed Hastings conceded that his company’s expansion into Latin America, Brazil and the Caribbean, which began last September, faces a number of hurdles beyond just broadband development. Consumers in the region are unfamiliar with the concept of over-the-top services, for one thing, and basic tasks such as orchestrating payment through recurring credit/debit card transactions is problematic given the developing states of local banking systems.

Still, despite some pushback from the investor community, Netflix keeps plugging away with content deals. In the first quarter, for example, the company added CBS Corp. TV shows including Dexter and Charmed to its Latin American slate; Disney animated hits Gnomeo & Juliet and The Incredibles also debued on the service, while the Weinstein Company’s Oscar-winning film The Artist is slated to make a second-quarter bow.

For a subscription-based media company like Netflix, which must keep adding customers in order to survive, Latin America could ultimately prove to be salvation. On Tuesday, for example, another U.S. media business facing stagnant U.S. subscriber growth, DirecTV, announced that it had added another 593,000 Latin American subscribers in the first quarter.

But delivering satellite signals to the developing region is one thin,g and broadband is quite another.

Asked about competition from over-the-top services in the region during DirecTV’s earnings call, company chief Michael White said it wasn’t much of a concern given the level of broadband penetration.

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  1. Hmmm, just checked Net Index by Ookla for Sao Paulo, Brazil, and it shows 7.43 mbps average across hundreds of thousands of tests. And it has been getting faster in recent months: http://www.netindex.com/download/4,280/S%C3%A3o-Paulo/?tab=1

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