Hastings: Netflix tops 5M subs in LatAm; piracy remains a competitor

Piracy remains a significant competitor for Netflix in Mexico, CEO Reed Hastings said at an event in Mexico City today.

Meanwhile, Hastings said the company has about 5 million subscribers in Latin America and has yet to break into the black.

Netflix launched in Latin America and the Caribbean in October 2011, its first major expansion into a market after its inaugural international deployment in Canada in 2010, a market that has seen significant growth – and profit.

At the timeof its launch into Latin America and the Caribbean Hastings said he expected it to take about two years for the company to become profitable in Mexico.

“We are going to lose money for a while,” he said at the time, according to a Reuters report. “It will take a lot of subscribers to get to profitability.”

Netflix is seeing strong growth in Latin America. 

In July, Digital TV Research estimated Latin America Netflix subscribers at 2.46 million, significantly less than the number Hastings reported today, but still an increased of 26% since December 2013 and more than 213% since December 2012.

DTVR estimated that Mexico has the largest number of subscribers, some 640,000, an increase of 256% in 18 months. Over the same period, Brazil grew about 250% to 560,000 subscribers.

In July, Columbia was estimated to have 310,000 subscribers, up 27% in the previous six months.

Netflix continues to have big plans for Latin America, with the company planning more new content for the region, Bloomberg reported.

A recent report from Sandvine says Netflix peak period downstream traffic has more than doubled in the past year in Latin America. Netflix accounted for 5.5% od downstream traffic in H2 2014, the largest piece for any paid SVOD service. A year ago, it accounted for just 2.2%.

In North America, Netflix accounts for nearly 35% of peak period downstream traffic.

It’s forecast that by 2018, some 18 million consumers in Latin America will take some kind of OTT subscription, according to Dataxis.

Nearly three-quarters (72%) of SVOD subscribers currently subscribe to Netflix, with about 16% of the market using Claro and 12% using other SVOD services.

And, while Netflix poses a threat to operators in the region, it also has helped OTT gain traction in the region. But, with just 15% of Netflix content considered local, there’s a huge opportunity for service providers in the region to jump onboard the trend and to leverage their local content.

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn