Netflix will fight piracy with quality content that people would pay for, while expanding its online streaming service to Latin America and the Caribbean, the company's chief executive said.
Netflix Inc will invest close to $70 million in the region this year on content and marketing.
The movie-rental company launched its online streaming service in Brazil this week. It costs about $9 a month and will expand to Argentina and the rest of the region next week.
"We're in this for the long term. We're expanding in Brazil, Argentina, Mexico, the rest of Latin America. It's good for us to learn the taste, to know which movies are most popular," Netflix CEO Reed Hastings told Reuters in an interview in Buenos Aires.
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Although piracy remains a challenge because of the endemic knock-off DVDs sold on the streets and the widely available pirated online content, Hastings remains confident viewers will turn on to Netflix for its quality and wide selection.
"What we can offer is a service that works so well that you can just click and watch, and with such good content that people are willing to pay 39 (Argentine) pesos" a month, he said. That is the equivalent of about $8.80.
Over the next six months, the company plans to double the amount of content, including Argentine films and TV shows. For now, Netflix began its operations in the region with broad content that appeals to most viewers, including family films such as Apollo 13, which Hastings displayed online.
The firm will move into Asia or Europe by early 2012.
"Both Europe and Asia are great markets. They're both very attractive," Hastings said. "In Asia, there's so many people and so many Internet users but very high piracy. And in Europe, the economy is not as fast-growing but there is less piracy. Both will be important to us as we expand. We just have to figure out the order; we'll do one and then the other."
Under the leadership of Hastings, Netflix shares have tripled in value since January 2010. But the stock rally and recent stumbles, including a July decision to raise some prices, have drawn short sellers betting the momentum cannot continue.
Netflix shares plunged last Friday, a day after Pay-TV operator Starz Entertainment decided not to renew its contract with the movie-rental company. The collapse of talks with Starz highlighted investor concerns that Netflix may lose its edge in online rentals.
But Hastings downplayed the importance of the deal, which includes exclusive rights to first-run Sony Corp and Walt Disney Co movies, for streaming on Netflix.
"The Starz content deal is only in the U.S. and it's less than 10 percent of our content viewership, so it's actually relatively small. So we'll replace that with other content," Hastings said.
"In each country we try to see what people are watching and try to do more of that. Over the next weeks, we'll be watching what Argentines are watching," he said.
(Additional reporting by Alejandro Lifschitz; Editing by Richard Chang)
