Netflix Comes to Cuba

Netflix

Netflix comes to Cuba because of the détente in relationships between Cuba and America.  CEO Robert Hastings is glad to be one of the first American companies in the communist country. This thaw has opened up the chance for Americans to visit Ernest Hemingway’s old stomping ground and welcome home political prisoners who had fled from justice. In return, Cubans may stream movies just like they do in America. Netflix is on the cusp of this change  and has targeted an unexpected population.

Most Cubans still drive around in 1950s-style cars. Few places outside of hotels in the Latin America country have internet service, even fewer have the high-speed waves needed to run a good Netflix movie. In fact, Cuba has an internet penetration rate of five percent, one of the lowest in the world. Couple that with Hastings’ declaration that only “international payments” will be accepted to access the service.

Things do not get much better. Only U.S. card holders who visit the island may use their cards to charge a service, although two credit card companies intend to offer service in the near future.  However, Cuban subscribers cannot use U.S. payments. Cubans do not use credit cards, nor can they hold money in a foreign bank. Additionally, not many on this Caribbean island can afford the $8 monthly fee.

Parenthetically, Netflix’s spokeswoman has somewhat of a different angle on the whole scenario. She seems to intimate that Netflix came to Cuba just because they could. “It was the only country…where we have been illegally unable to operate.”

Netflix
Cuban girl

Hastings and Cliff Edwards, Netflix’s Director of Corporate Communications are betting  on a big payout on this risky investment. The Cuban government is committed to improving internet on the island and President Obama will facilitate it in any way that he can. In the future, when internet waves permeate Cuba and almost every hacienda  has high-speed internet, they will remember who was there first. The company caters to its 5 million-strong Latin America base, representing more than 10 percent of their international customers. Although they are firmly ensconced in 50 countries around the world, they have their eye on 200 more, including China and Japan. These countries may offer a bit more of a return.  The plan seems to be working. After recently expanding into European countries such as France, Germany and Luxemburg, the company experienced, “stronger than expected international gains.” This makes them eager to go “down under” into Australia and New Zealand, which is in the works.

Although Cuba’s internet penetration averages about five percent, It ranges up to 27 percent. International executives and high-ranking government officials who use high-speed internet regularly will have no problem logging on the streaming service. Everyone else can visit one of several public internet cafes. They can also catch some high-speed internet waves at a touristy hotels. Internet cafes use slow-speed internet and not the high-speed waves that are used to operate Netflix. Until Netflix (really) comes to Cuba, the natives will be content to do what they have been doing already. They pirate movies, downloading them and burning them onto a compact disc or loading it onto a USB drive. That will do until they learn how it is done in America; sharing a username and  password.

By Danielle Branch

Sources:

USA Today – 1

USA Today – 2

CNN Money

Photo by Chris Messina – License

Photo by Thomas Munter – License

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