Wednesday, October 1, 2014

A NEW BLOW DEALT TO NETFLIX — IN LATIN AMERICA

May 17, 2012 by · Leave a Comment 

Shares of Netflix fell 3 percent today (Thursday) after recovering from a deeper decline earlier in the day as investors reacted to news that the company’s launch in Latin America is experiencing unforeseen difficulties. Netflix launched in 43 Latin American countries last year, where growth has proved to be slower than it had been in other countries where it had launched during the past three years, including Canada, the U.K. and Ireland. Speaking to an investors conference in New York on Wednesday, Netflix CFO David Wells suggested that a major problem may be that Latin Americans have had little experience downloading movies and TV shows online (partly because highspeed broadband is being rolled out relatively slowly there). “The key thing we have learned with Latin America is that when a market has a competitor set, that may actually help us,” he said. Now, however, Netflix has to explain to Latin American consumers “that click-and-watch, Internet-delivered entertainment will actually work” But investors must certainly have worried that Netflix’s difficulties in Latin America will escalate its debt, which some analysts have already described as intolerable.