Netflix, Inc. (NASDAQ:NFLX) is expanding globally as the U.S. market saturates, and therefore is offering its services in new countries and adding new shows to its portfolio, so, that the growth momentum continues. Continuing the expansion, the company launched its services in Cuba on Monday, suggesting improving relations between the United States and the island nation.
“We are delighted to finally be able to offer Netflix to the people of Cuba, connecting them with stories they will love from all over the world,” said Netflix co-founder and CEO Reed Hastings. “Cuba has great filmmakers and a robust arts culture and one day we hope to be able to bring their work to our global audience of over 57 million members.”
Cuba won’t add much to profits
The residents of Cuba, who have access to high-speed internet and credit cards, will be able to avail the service at a price of $8 a month. Original shows like House of Cards and Orange is the New Black are among the few original shows that are part of the library content. The library will include many more original shows and movies that are licensed.
Netflix, Inc. (NASDAQ:NFLX)’s profits will not be bolstered much by the launch of services in Cuba as a meager 5% of the population has access to high-speed internet as informed by the World Bank. However, the fact that Netflix has made its presence in Cuba indicates that the company is super serious about expanding globally, and in process, is targeting even those nations that lack infrastructure.
Challenges ahead for Netflix
A major problem faced by Netflix, Inc. (NASDAQ:NFLX) at present that its growth in the U.S. has slowed down, and hence it needs to add subscribers globally. For this, it is expanding globally at a fast pace, but it has substantial competition to face from the other major competitors like Amazon, cable providers and Google. The company needs funds for meeting the global expansion expenses, and also for purchasing and creating new shows. For this the company will soon issue a $1 billion bond, as per its recent announcement.
Netflix operates in as many as 50 countries, and had 57.4 million total customers including 4.33 million subscribers it added in the fourth-quarter.