With one memorable tweet, Netflix announced to the world on Monday that its online video-streaming service was suddenly available in Cuba. The launch makes Netflix among the first American companies—and, thus far, the most important—to expand its operations to the island nation since President Obama announced a loosening of trade restrictions in December. This is a big deal, so why is no one excited about it?
Widely reported on, the deal has been met with widespread apathy, even skepticism, with headlines like “Netflix launches $7.99 service for Cuba despite average wage of $17 a month” and “Netflix Is Coming to Cuba. But Will It Have Any Customers?” To be fair, the detractors have valid concerns regarding Cubans’ access to Netflix, which requires, unsurprisingly, “Internet connections and access to international payment methods”—both of which are unfathomably rare on the island.
This is a big deal, so why is no one excited about it?
The daily reality for the vast majority of Cubans seems pretty grim from an American perspective. Despite a modest population of 11.2 million, only 31 percent have access to a computer at home, work, or school. Twenty-six percent have Internet access, which is highly regulated, and a mere 5 percent have unfiltered access. For those who can get online, the experience isn’t great, since many people are still using (gulp) dial-up. According to Freedom House, an Internet watchdog group, there are 5,300 active broadband connections in the entire country, and many broadband users, e.g. students, have a cap on the amount of data they can use in a given month. In other words, this is hardly the kind of telecommunications infrastructure that can support binge-watching Orange Is the New Black.
There’s also a money problem. The company’s requirement of international payment methods (debit and credit cards, PayPal) creates a hurdle, as virtually no Cubans have one. And even if that were not the case, private Internet access is prohibitively expensive. In a press release, Netflix said that it expects Cuban consumers to be able to enjoy its product “as Internet access improves and credit and debit cards become more widely available,” but given the current circumstances, it’s clear that its audience will be limited to an elite segment of the population: high-ranking government officials, foreign journalists, and international executives.
So Netflix’s entry into the Cuban market is, for the time being, nothing more than a publicity stunt. But that shouldn’t detract from the importance of the company’s move, which so far has been largely dismissed as “symbolic” (a.k.a. meaningless). In reality, the Netflix deal points to an optimistic future for both American business and government vis a vis our southern neighbor.
It’s clear that its audience will be limited to an elite segment of the population: high-ranking government officials, foreign journalists, and international executives.
As diplomatic relations between the two countries are normalized, one of the U.S.’s top priorities will be expanding and improving Cuba’s Internet access, which the Castro regime claims it will support. A $31 million fiber-optic cable-line linking Cuba and Florida, built by the U. S military, is scheduled to begin operating at the end of this year, with the goal of bringing the entire island online.
Meanwhile, MasterCard and American Express have stated that they will soon allow their U.S. customers to use their cards in Cuba, meaning it could be a short matter of time before Americans are sharing their credit card info with overseas family members to make payments. (It remains to be seen, however, how long it will be until the average Cuban citizen can sign up for a credit card.) Within a couple of years, the current hurdles facing Netflix will have been significantly reduced. While that may seem like great news for the company’s investors and no one else, the implications of these developments are quite far-reaching.
In many ways, Netflix makes an ideal test case for American enterprise in Cuba. The company isn’t building any new infrastructure or taking on additional risk, so the stakes are extremely low. (It will be interesting to see when similar services like HBO Go, Amazon Prime, and Hulu make the leap.) The company’s interaction with the political establishment will also be precedent-setting; for now, the regime isn’t censoring Netflix’s offerings, which include The Square, a documentary about the Egyptian Revolution of 2011.
Skeptics would argue that a service with such a limited audience requires no censorship, but whether or not the government blocks Netflix in the future, its actions will be closely watched by other American content producers looking to enter the market. And because Netflix is also in the business of tech, every savvy app developer and web programmer will be watching closely, too, hoping to predict their own fortunes.
Netflix makes an ideal test case for American enterprise in Cuba.
The other important factor at play is the potential of American-produced news and entertainment to win hearts and minds. Just as satellite TV has increased American soft power in the Arab world, so too will Netflix play a role in shaping the Cuban people’s attitude toward us. Cuba’s state-owned TV airs some U.S. programming, and the country already has a black market for Hollywood movies and TV series distributed on DVD and flash drives, so there is clearly a demand. As a wider variety of our pop-culture products become more accessible to the Cuban populace, the benefits to American public diplomacy will be difficult to overstate. Once the proper infrastructure is in place, the State Department would be wise to work with Netflix and other entertainment providers to maximize the range of this soft power.
Many have prematurely lamented how Cuba will change once Americans are allowed to freely travel there, but that’s a misguided notion. It’s really our technology and our culture, arguably our greatest exports, which will have the farthest-reaching effects. Netflix, which sells both products, may have planted a flag in the sand for its own glory, but its fate will provide a crucial blueprint for politicians and CEOs in the years to come.