Netflix now in Cuba, even if Internet use is low there

As relations normalize, the Cuban people will get access to America's greatest export: pop culture

Technology trends and news by Steven Loeb
February 9, 2015
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It has been said that America's best export is its pop culture. Now, I don't know if that paints us in the best light (surely we have something better to offer than Iggy Azalia and the Transformer movies) but I get what they mean by that. I was shocked when I went over to Europe back in 2007 and, instead of having their music, I heard Amy Winehouse in even the smallest, hole in the wall places. It is pervasive and inescapable.

So, with America's embargo with Cuba not going away just yet, but with tensions finally beginning to ease between the two nations, it makes sense that one of the first things we would send over would be our movies and television. 

Netflix has arrived in Cuba, the company announced in a press release on Monday, to those in the country who have access to Internet connections and access to international payment methods. The service will cost $7.99.

Cuban citizens will have access to "a curated selection of popular movies and TV shows," including Netflix original series like House of Cards, Orange is the New Black and Marco Polo, as well as kids programming like All Hail King Julien, The Adventures of Puss in Boots and original documentaries including Virunga and The Square.

“We are delighted to finally be able to offer Netflix to the people of Cuba, connecting them with stories they will love from all over the world,” Reed Hastings, Netflix co-founder and CEO, said in a statement. “Cuba has great filmmakers and a robust arts culture and one day we hope to be able to bring their work to our global audience of over 57 million members.” 

The addition of Cuba will no doubt help Netflix's international streaming numbers, which have been growing rapidly. In the most recent quarter, it reported 18.28 million international streaming customers, up from 10.9 million in the same period in 2013.

Netflix began offering its service in Latin America in 2011 and now counts over 5 million members in that part of the world.

Domestic subscribers, meanwhile, were 39.11 million, up from 33.4 million in the fourth quarter of 2013. Both are growing, but it's easy to see where the big opportunity is for the company. 

This move also helps it grow against the increasingly fierce competition, specifically from Amazon. Last week, Netflix announced that it was looking to raise $1 billion in debt, in order to getting the rights to content, as well as tp increase the development of its own slate of original programming. Netflix is among the most ambitious, streaming companies, with its plan to create 20 new original series per year. Opening up to a new market will obviously help the company increase its dominance.

There could be one big roadblock for Netflix in the case of Cuba, though: low numbers of Internet users. The country has a population of 11.3 million people; of those, only around 25%, or around 2.8 million, had Internet access in 2012, according to data from the World Bank. That number has presumably grown since, but it is unlikely to have moved all that much.

That may be misleading, though, as it only counts those who use government approved Internet, and not those who have found other ways to get access. Even so, access to fast Internet in the country is said to be particularly hard to come by.

The bottom line is, expanding to Cuba will not have a huge effect on Netflix's numbers, at least not yet. But there could be a long game being played here, where, as relations normalize and the embargo is eventually lifted, more Cubans will have access to computers and high speed Internet. And so they will turn to the streaming company that they immediately will have access to.

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