Netflix expands online service to Latin America
NEW YORK (Reuters) - Netflix Inc is expanding its online video service to 43 countries in Latin America and the Caribbean, sending its shares to an all-time high.
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.
The company was widely expected to announce plans of an international move and has signaled it could push into at least two international markets a year starting in 2012.
"I think generally people were expecting a launch in one country and this was a whole region," 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.
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.
Netflix declined to comment on further expansion.
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.
Shares of Netflix have had an incredible run in recent years -- up roughly 1,000 percent since 2008. In recent months some investors have bet the stock will fall after its rocket-like trajectory.
That also could explain today's share rise, said Bagga about investors piling into the stock to cover their short position.
Once considered a friend to TV and movie studios, media conglomerates have fretted over Netflix'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, had 22.8 million subscribers as of March 31.
Netflix shares hit an all-time high of $291.23, and were up 8 percent at $289.48 in afternoon Nasdaq trading.
(Reporting by Jennifer Saba in New York and Lisa Richwine in Los Angeles; editing by John Wallace, Derek Caney, Dave Zimmerman)
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