Netflix brings its streaming video service to Cuba

Netflix brings its streaming video service to Cuba
BY MICHAEL LIEDTKE AND MICHAEL WEISSENSTEIN ASSOCIATED PRESS
02/09/2015 3:01 PM 02/09/2015 5:36 PM

SAN FRANCISCO
Netflix began selling its Internet video service in Cuba Monday in what
appears to be a largely symbolic move driven by the recent loosening of
U.S. restrictions on doing business with the communist-run island.

The expansion probably will generate more publicity for Netflix Inc.
than new subscribers because only a small fraction of people living in
or visiting Cuba have the high-speed Internet access needed to stream
movies and TV shows.

The audience with fast enough Internet service to get Netflix consists
primarily of international executives, foreign media workers and
high-ranking government officials. Many more Cubans have access to
relatively fast internet connections if they work for state businesses
authorized to have the service, but their online activities are
monitored. Streaming videos at work is among the activities that could
trigger disciplinary action.

Most Cuban incomes are meager, too, making Netflix's $8-per-month
service an unaffordable luxury for most of the island's 11 million
residents. A ban on making U.S. payments also remains in effect,
requiring anyone in Cuba who wants to subscribe to Netflix to set up an
international payment method.

Credit card use by Cubans is virtually unknown, though both MasterCard
and American Express recently announced plans to begin processing
payments by their U.S. card holders while visiting the island.

Despite those obstacles, Netflix evidently wants to establish a toehold
on Cuba now with the hope that Internet service will improve, household
incomes will rise and diplomatic relations with the U.S. will continue
to thaw. Moving into Cuba isn't likely to cost Netflix a significant
amount, given that the Los Gatos, California, company already has been
programming for Spanish-speaking audiences since expanding into dozens
of Latin America countries in 2011.

Netflix now has more than 5 million subscribers in Latin America,
accounting for nearly 10 percent of its 57 million customers worldwide.
About 39 million of those subscribers are in the U.S, but Netflix is now
experiencing its fastest growth internationally.

Things have been going so well internationally that Netflix CEO Reed
Hastings plans to complete the company's expansion outside the U.S. by
the end of next year. By then, Netflix expects to be streaming in 200
countries, including China, if the company can get the necessary approvals.

Investors apparently don't view Cuba as a particularly promising market
for Netflix. The company's stock dipped 85 cents to $443.51 in afternoon
trading Monday.

Only about 27 percent of Cuba's population currently has access to the
Internet, according to Internet Live Stats, which uses information from
the International Telecommunication Union, the United Nations and the
World Bank to estimate the world's Internet users. Another estimate by
the group Freedom House puts Cuba's Internet availability at just 5
percent of the population.

Much of Cuba's Web surfing occurs in hotels or government internet
centers with connections too slow to stream videos. That kind of access
typically costs $4.50 per hour or about a quarter of the normal monthly
wage. Most Cubans currently use the Internet time to email friends and
relatives abroad.

Hundreds of thousands of Cubans entertain themselves by sampling a wide
range of U.S., Spanish and Latin American films and television series
copied onto DVDs and USB memory drives. The pirated content makes it
possible to watch an entire season of a TV series for as little as $1.

Source: Netflix brings its streaming video service to Cuba | The Miami
Herald The Miami Herald -
http://www.miamiherald.com/entertainment/celebrities/article9612605.html