As promised, the streaming side of Netflix (NSDQ: NFLX) has made its way south. The service went live in Brazil today with Netflix Brasil (announced here in Portuguese), with plans to roll out across Latin America and the Caribbean over the next week. By Sept. 12, Netflix expects to have a presence in 43 countries and territories south of its native United States — making it the first to offer subscription video throughout the U.S., Canada and Latin America. The potential is substantial.
Netflix launched in Canada last September. It passed the million-subscriber mark this summer, surpassing internal projections and helping Netflix break through the 25 million mark. By spring, it was on a path to break even in its first year. The initial success with their first international effort — and the lessons learned — gave CEO Reed Hastings and team a foundation for the next, more complicated effort.
Latin America traditionally is treated as a block in licensing deals but launching across that many countries with multiple languages (English, Spanish and Portuguese) is a usability and customer service challenge. Appropriately, Monday’s announcement on the Netflix corporate blog came from Rochelle King, VP of User Experience and Design, who stressed, among other things, training local customer service reps. (Launch schedule and pricing details per country in the release.) Netflix has 13 separate launches scheduled, the last in Mexico, Central America and the Caribbean on Sept. 12.
Programming interests vary, too. King says Netflix has licensed “thousands and thousands of hours of feature films, classic favorites, gripping telenovelas, documentaries and kids shows.” It launched in Portuguese in Brazil at BR14.99.
Like the service in the U.S. and Canada, Netflix Latin America will stream across platforms with computers, game consoles (WII and PS3), and internet-connected TVs. Unlike the U.S. or Canada, the details about Netflix Latin America don’t mention access via mobile devices. (Update: A Netflix spokesman said mobile is coming “over time” in Latin America.)
Netflix has yet to announce its plans past Latin America but is expected to expand to Spain and the UK early next year. Subscription challenger Hulu went in a completely different direction for its first international effort, launching in Japan last week.
At the same time, Netflix faces new challenges at home. The decision to split its DVD and streaming services, effectively raising prices by 60 percent for those who want access to both, has raised questions for subscribers– and opened the door to competition. The price change started Sept. 1 and will take effect as customers hit their billing cycles this month. Netflix is betting that a substantial number will opt for streaming only, especially with the bulk of new subscribers doing just that, but subscribers considering that shift to streaming only have new options outside Netflix.
The appeal will vary according to their needs. *Amazon* Instant Prime provides “free’ streaming movies and TV shows to those whoalready pay $79 annually for special shipping rates from Amazon (NSDQ: AMZN). That could be enough for relatively casual users. So-called cord cutters or others who want quick and deep access to current-season TV may prefer Hulu Plus, priced at $8 a month like Netflix. The online video portal is being shopped by owners News Corp. (NSDQ: NWS), Disney (NYSE: DIS), Comcast (NSDQ: CMCSA) and Providence Equity Partners, leaving some questions about the kind of programming it will be provide. A recent move by Fox offers a hint, though: current Fox prime-time programming is only available 24 hours after it airs to Hulu Plus and Dish subscribers; others have to wait eight days. Hulu Plus already is the best way to see more than five trailing episodes of current shows. More casual users may opt to go a la carte.
Netflix also is losing some of its edge for subscribers who want access to first-run movies. Last week, Starz Entertainment went public with its decision to end ties with Netflix when its current deal expires in February. It already had pulled certain Sony (NYSE: SNE) titles because it had run out of room under cap agreements with the studio but a new deal with Sony could take care of that. Granted, that doesn’t mean Starz Play is guaranteed to disappear from Netflix then and, yes, it does give Netflix more money to spend elsewhere. Still, when people can’t get what they want in one spot, they look elsewhere.