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Netflix heads south, launching movie, TV show streaming service in Latin America
LOS GATOS, Calif. (AP) ' Netflix is expanding its movie and TV show streaming service into 43 countries throughout Latin America in the online movie rental company's largest international expansion yet.
Analysts said the expansion was larger than expected. The company's stock hit an all-time high of $283.50 in morning trading Tuesday.
Netflix Inc. subscribers in Mexico, South and Central America and the Caribbean will be able to watch TV shows and movies streamed on a wide range of gadgets starting this year. The company did not announce a pricing plan or say exactly when the service will be available.
In the U.S., a streaming subscription costs $8 a month and customers can pay slightly more to get DVDs in the mail. As is the case in Canada, Netflix's service in Latin America will be streaming-only, with no DVD option.
Citi Investment Research analyst Mark Mahaney estimates that Netflix will be able to capture 8 percent of the Latin American and Caribbean market in the next 12 to 18 months, possibly less if it also launches in Europe and other regions.
That said, "there is absolutely no guarantee that (Netflix) will succeed in any of these new international markets, although we believe that Internet video streaming will become a major activity in each of these markets," Mahaney said in a note to investors.
The company is working on broadening its international reach as its service in the U.S. becomes more ubiquitous. As of March, Netflix had 22.8 million subscribers in the U.S. ' about 34,000 more than the number of households subscribing to Comcast Corp.'s cable-TV service.
Netflix, which is based in Los Gatos, Calif., launched its streaming service in the U.S. in 2007 and in Canada last year.
If it does launch the service in Europe, Netflix would face competition with popular online movie rental company Lovefilm, which Amazon.com Inc. bought in January.
Shares of Netflix increased $14.01, or 5.2 percent, to $282 in midday trading after earlier hitting a record high of $283.50. The company's shares are up 61 percent so far this year, compared with just 6.3 percent for the S&P 500 index.