Netflix just launched in the unlikeliest of locales: Cuba, where less than 5% of the population has internet access and the streaming media company’s subscription cost—$8 a month—is almost half of the average salary.
The move was made possible by the recent deal to normalize relations with the United States, which included a promise to ease restrictions on the Cuban internet. Still, even those with access to the internet are mostly on slow dial-up connections. Some hotels have internet cafes with slightly faster connections, but most Cubans can’t afford to use them.
So why, exactly, is Netflix entering Cuba? Hint: It has nothing to do with the company’s bottom line.
It’s partly a marketing stunt
Netflix has always tried to stay ahead of the curve, moving quickly from a DVD rental service to a streaming media platform to a content creator of its own. Ted Sarandos, head of content at Netflix, famously said in 2013, “The goal is to become HBO before HBO can become us.” The two companies seem to be about even on that front, with Netflix offering more-and-more original shows and HBO set to roll out its standalone internet service some time this year.
With this move, Netflix can boast that it’s the first major streaming video service to enter Cuba. Netflix presents itself as a truly global entity that can unite people through its content, and entering Cuba can be spun as a real act of TV diplomacy. It will be interesting to see if companies like HBO, Amazon, and Hulu follow suit.
It’s a template for further expansion
By the end of 2016, Netflix wants to be available in every country in the world. Right now, it’s in about 50 and has 57 million subscribers (pdf). To expand so quickly, the company may have to slim down what it offers in each country. Netflix can’t keep going through complicated rollouts like it did in France.
A Netflix spokeswoman tells Quartz that “people in Cuba will have access to a similar catalogue to what is available in other parts of the Spanish-speaking Caribbean.” In other words, they’ll be able to stream Netflix original shows and a selection of content that Netflix already has the rights to stream in the region.
It plants the Netflix flag early
One of the top priorities for the US in normalizing its relations with Cuba is to improve Cubans’ access to the internet. And Cuban leaders, at least, have signaled that they’ll allow it. The US now allows exporting communications equipment to Cuba and recently built a $31 million fiber-optic cable connecting Cuba to Florida, with the hopes that it will someday supply the internet to the entire island.
It may happen slowly—as change usually does in Cuba—but when it does, Netflix will have a head start in a brand new market (though the company already has a fairly large presence in Latin America). Over the next few years, the US hopes to connect more and more Cubans to the internet. And Netflix hopes to connect those people to Frank Underwood and Crazy Eyes.