beyondbrics

As the FT first reported in May, Netflix, the US-based DVD subscription and online video streaming service, is setting up in Latin America.

The US-based group launched its movie and TV streaming business at the Grand Hyatt in São Paulo with much fanfare on Monday, saying it would launch in virtually every country in Latin America by next Monday.

The service promises to throw open Brazil’s home movie market to competition. The DVD of blockbuster animated film Rio, for instance, costs a pricey R$39.90 (about US$24) at the Livraria Cultura bookshop in central São Paulo.

A monthly subscription to Netflix will cost only R$14.99.

Anti-piracy advocates hope the reasonable price and easier access to movies and television programmes provided by legitimate online services such as Netflix will help deter piracy. Brazil remains on the US watchlist for countries that violate intellectual property rights, according to the 2011 Special 301 Report of the Office of the United States Trade Representative.

From the report:

Piracy and counterfeiting persist at significant levels in Brazil, including book piracy and a reported growth in piracy over the Internet. While enforcement efforts improved, including a larger number of raids and seizures, stronger enforcement at the border and deterrent level sentences are still needed.

Netflix also promises to test the robustness of Brazil’s broadband network. According to the Associated Press:

Only 20 per cent of Brazil’s 42m internet users have a connection speed above 500 kilobytes per second, according to a May report from Ibope Nielsen Online. A speed of around 800 kilobytes per second is the minimum required to stream movies online.

The issue of internet access is a wider problem for Brazil as it seeks to build a more productive economy. A study (in Portuguese) by Ipea, Brazil’s institute of applied economic research, suggests multiple ways for the government to promote universal internet access.

These include reducing the tax burden on mobile phones and televisions (in addition to existing tax breaks on computers, tablets and fibre optic networks) to make them more affordable as a means of accessing the internet.

Netflix may want to bring Hollywood to all Brazil. But first Brazil will need to find ways to bring broadband to more Brazilians.

Related reading:
Netflix pushes into Latin America, FT
Picking Up Speed, WSJ
Tax, infrastructure make broadband Internet too costy in Brazil, Xinhua