Netflix Said to Seek Media Rights for Latin America Service

Netflix Inc. (NFLX), preparing to expand in Latin America, is negotiating with entertainment companies for rights to stream movies and television shows in the region.

Walt Disney Co. (DIS), Lions Gate Entertainment Corp. (LGF), Universal Pictures and Viacom Inc. (VIA/B)’s Paramount Pictures are in discussions with Netflix for Latin American rights, according to people with knowledge of the talks. The rights being discussed with one studio would exclude Mexico, said one of the people, who declined to be named because the talks are private.

Latin America would become Netflix’s third market. The company started a streaming-only subscription service in Canada last year, expanding from the U.S., where it also offers DVDs by mail. CBS Corp. (CBS) is in “serious talks” with Netflix for Canadian and Latin American rights, the broadcaster’s chief executive officer, Leslie Moonves, said yesterday.

“We are always negotiating with virtually all the studios and networks and independent filmmakers,” said Steve Swasey, a spokesman for Los Gatos, California-based Netflix. “We are looking at international expansion in a lot of places.”

Michelle Bergman, a spokeswoman for Burbank, California- based Disney, declined to comment, as did Peter Wilkes, a spokesman for Vancouver-based Lions Gate, and Cindy Gardner, a spokeswoman for Universal. Dade Hayes, an outside spokesman for Paramount, had no immediate comment.

Netflix CEO Reed Hastings has said he’s looking to enter new territories. He hasn’t said where, dropping hints at appearances like the Wired magazine conference yesterday, where he mentioned Brazil, India, Australia and Turkey.

“We haven’t announced our next market yet,” Hastings said at yesterday’s event in New York. “Look for high broadband and eager customers.”

Older Titles

The movies being discussed for the Latin American service are older titles, said one of the people.

Netflix said on April 26 its push outside the U.S. will lead to international operating losses of as much as $70 million in the second half, up from a previous forecast of $50 million.

Netflix fell $2.05 to $229.19 at 4:30 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 30 percent this year.

Central and Latin America will have the fastest growth through 2015 in broadband connections that are required for online movie services such as Netflix’s, according to a November 2010 report by consulting firm Analysys Mason in London.

Governments in countries including Brazil and India favor upgrading Internet service over paving roads, Hastings said yesterday.

“I was in Costa Rica on a surf trip, relatively isolated, but there was DSL,” Hastings said. “I was surprised. Government-laid fiber down the dirt road.”

To contact the reporters on this story: Ronald Grover in Los Angeles at rgrover5@bloomberg.net; Cliff Edwards in San Francisco at cedwards28@bloomberg.net; Andy Fixmer in Los Angeles at afixmer@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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