Netflix has close to 500,000 subs in LatAm
Juan Pablo Conti ©RapidTVNews | 27-01-2012
With the announcement of its end of year results, Netflix has provided the first meaningful clues about how well (or otherwise) the OTT operator is doing in Latin America.
Three months ago, CEO Reed Hastings had anticipated the company would end 2011 with approximately the same number of Latin American subscribers that it had managed to sign up in Canada a year earlier.
The comparison was relevant in the sense that both in Canada and Latin America (the first two markets outside of the US where Netflix took its video streaming business), the company launched at roughly the same time of the year: early-to-mid-September – albeit with a 12-month lapse in between launches.
This time around, while he still preferred not to give away the exact number of users that the company has in LatAm, Hastings did confirm that the OTT player ended 2011 with "about the same number of members as we had in Canada at the same time post-launch last year".
This suggests that, throughout the 43 Latin American and Caribbean countries where Netflix operates south of the US border, the company has managed to attract 500,000 users during the initial four months since launching in the region.
"Latin America presents unique challenges relative to our other markets," Hastings wrote in a letter addressed to shareholders. "Namely, low device penetration, high piracy, varying preferences for subtitles and relatively low credit card usage for ecommerce.
"We are quickly learning what content works best in the region and are adjusting our content library accordingly. We have already nearly doubled our content library since launch, adding considerably more US and local movies and TV," he wrote.
As the OTT operator had previously warned, its international operations reflected a loss-making Q4 2011. In fact, Netflix has repeatedly admitted that – just as in its logo – the red colour will continue to dominate its international accounting books for, at least, another two years.
Specifically on Q4 2011, the company posted losses of US$60 million for its non-US operations, which now also include the UK and Ireland. For the current Q1 2012, Netflix has warned investors to expect an even bigger offshore loss – possibly as high as US$118 million.