Netflix expands online service to Latin America

Features Reuters

By Jennifer Saba

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NEW YORK (Reuters) - Netflix Inc is expanding its online video service to 43 countries in Latin America and the Caribbean, sending its shares up more than 6 percent.

This is Netflix's second foray outside the United States. It began offering its services in Canada last year.

Netflix, which offers TV shows and movies over the Internet and rents DVDs through the mail, is seeking new subscribers as competitors such as Apple, Google and Hulu are moving in on Netflix's turf.

"It makes a lot of sense," said Atul Bagga, an analyst at Think Equity. "I think that there is a lot of room for growth in these markets."

The Latin American market has an estimated 215 million user base, compared to the U.S. with about 245 million, Bagga said.

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In the widely anticipated move, Netflix said on Tuesday that subscribers in Mexico, Central America, South America and the Caribbean will be able to access shows and movies in Spanish, Portuguese or English later this year.

In a letter to investors in April, Netflix said it expected to have $50 million to $70 million in operating losses during the second half of the year due to its second international expansion.

Once considered a friend to TV and movie studios, media conglomerates have fretted over the service's popularity because it threatens traditional cable and satellite providers.

The fear is that consumers will drop pricey cable packages -- known as cord cutting -- in favor of cheaper services offered by companies such as Netflix.

Netflix has more than 23 million subscribers. By contrast, Comcast, the No. 1 U.S. cable operator, has 22.8 million subscribers as of March 31.

Netflix shares were up 6.3 percent at $284.92 in late morning Nasdaq trading.

(Reporting by Jennifer Saba; editing by John Wallace, Derek Caney, Dave Zimmerman)