Netflix launches in Cuba for $7.99/month as trade restrictions ease

In a clear sign of improving relations between the U.S. and Cuba, Netflix has launched its video-on-demand (VOD) streaming service in the tiny Caribbean nation.

This move is in line with Netflix’s current aggressive expansion program, with it recently announcing plans to enter Asia via Japan, while a number of other new market launches are on the cards in 2015.

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Cuba, however, is a notable new territory for Netflix, particularly given the historical tensions between the country and Netflix’s home nation. President Barack Obama recently introduced new rules designed to alleviate travel and trade restrictions against Cuba, which came shortly after the countries revealed they would seek to re-establish diplomatic relations.

Today’s news mirrors similar moves made by other U.S. tech firms in recent times, with Google launching Chrome in Cuba last August, followed by Google Play and Analytics in November. However, because of long-standing trade embargoes, Google only offered free apps on Google Play, as well as the free version of Google Analytics. The fact that a major tech firm such as Netflix is going in with a direct subscription-based business is notable.

It’s also indicative of Cuba opening up to e-commerce, with Internet spreading and international payments becoming more widely available for international transactions. American telcos will also be allowed to trade in Cuba, which is obviously conducive to bumping up broadband speeds — integral to services such as Netflix.

This isn’t Netflix’s first Latin American launch — it’s been in the region since 2011, and is now available in major markets such as Brazil, Chile, and Argentina. However, the company only claims 5 million paying members in Latin America, which isn’t that many compared to the potential market size, which runs into the hundreds of millions.

Against that backdrop, Netflix may struggle to gain traction in Cuba at first, especially when you consider the country is only just opening up to e-commerce on a global level. But in a nation of 11 million people, and with very little in the way of direct competition, Netflix’s early arrival on the scene is likely as much a strategic future-gazing move as anything. And if nothing else, it’s symbolic of the burgeoning relationship between the U.S. and its neighbor.

Netflix says that a number of familiar titles will be available at launch today, including House of Cards and Orange Is the New Black. The service will cost the same as it does in the U.S., too — $7.99 per month.