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Netflix Mulling Asian Expansion

18 Aug, 2011 By: Erik Gruenwedel

Streaming trailblazer is considering Far East operations as it readies service launches in Latin America this fall and Spain and the U.K. in 2012

Netflix reportedly is eying additional rollout of its subscription video-on-demand service in Asia and Western Europe, including Luxembourg, Belgium and Holland.

The Los Gatos, Calif.-based online disc rental pioneer is looking at South Korea and Japan as beachheads for Asian operations, given the countries' high broadband penetration, according to the Los Angeles Times, which cited people familiar with the situation.

As expected, Netflix will launch service in Spain and Britain in 2012, the former confirmed by Pedro Perez, president of Spanish producers association FAPAE, who told ScreenDaily.com the service has been negotiating license rights to local video content.

The United Kingdom has long been considered a logical expansion target for Netflix, which many pundits thought would be the service’s first international launch. Instead Netflix launched in Canada last summer. Regardless the perception prompted Amazon to acquire remaining ownership in Lovefilm.com – the largest by-mail movie and streaming service in Western Europe.

Spain would be a significant challenge for Netflix as it ranks high among regions known for piracy, bootleg movies and a dearth of digital distribution. It also has the highest unemployment in Europe, at 20%. Indeed, Apple iTunes does not sell movies or music in Spain.

Netflix, which does not comment on media reports or market speculation, has only officially confirmed expansion into Latin America, Mexico and the Caribbean later this year.

In its most recent fiscal call, co-founder and CEO Reed Hastings said Netflix would up international expansion in the coming years – a move considered even more likely as it increases monthly fees for combined streaming and disc rentals in the United States by 60% Sept. 1.

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