The Netflix/Cuba Announcement: Pure Propaganda

On Monday morning, Netflix put out a press release announcing Cubans would now have access to their streaming TV service. The press release was heavy on puffery and promises, but light on details. Yet most of the press dutifully repeated the headline.

Some accounts did at least acknowledge that the actual audience for Netflix in Cuba is, well ... limited.

You see, in order to watch Netflix you need a device and a broadband Internet connection capable of handling streaming video. In the U.S. one can walk into a McDonald’s restaurant with a basic smartphone and have access to such a connection. Many of the media stories about the Netflix announcement state that in Cuba it is estimated that only 5% of the citizens have access to the internet that you and I can view, a number that is almost certainly a gross overestimate when it comes to a potential audience for Netflix.

The 5% number stems from a Freedom House report that includes any kind of Internet access, including expensive, black market, and slow access.

Yet the International Telecommunications Union estimates that in 2014 there were about .04 fixed broadband subscriptions for every 100 inhabitants of Cuba. That’s not 5%, that’s less than half of 1%.

Cuba’s population is 11 million -- that translates into a total universe of potential Netflix subscribers that is perhaps 44,000.

On the infrastructure end, Netflix notably has had its issues about bandwidth with U.S.-based Internet service providers, complaining that its users are often getting a “poor customer experience.” I wonder which of the Castro brothers Netflix CEO Reed Hastings will complain to when the handful of Cuban subscribers complain of slow speeds. Or will it be their henchman Comandante Ramiro Valdes who, as minister of communications and informatics, once said that the Internet "is a wild colt that needs to be tamed”?

This doesn’t even take into account the question of cost. At $8 a month, a Netflix subscription would cost the average Cuban worker roughly 40% of his monthly paycheck.

Many Cubans have access to money, however, because they receive remittances from relatives abroad (mainly in the United States). Still, on an island where basic necessities like soap and toilet paper are scarce thanks to five decades of communist rule, it’s doubtful that the average Cuban would pony up a significant amount for Netflix.

So what’s the deal here? Why would Netflix make this announcement? Really the question is, why wouldn’t they? As an “over the top” pay TV provider, Netflix doesn’t have to invest in infrastructure in its target markets. They can simply declare that they are open for business, and it’s difficult to disprove it.

Not mentioned in the Netflix press release or any of the reporting to date is whether or not the Castro regime has given explicit permission to Netflix to begin streaming in Cuba.

This is no small matter, since the regime has always maintained a tight lid on outside communications coming in. There’s a black market for satellite dishes in Cuba and the punishments for being caught with one can be considerable. So is Netflix offering a service that goes against the laws of the regime? Are Cuban citizens who subscribe to the service endangering themselves?

More questions. Assuming the Castro regime has given explicit permission to Netflix to sell subscriptions in Cuba, what cut they are getting in return? Despite President Obama’s diplomatic opening to Cuba, the trade embargo remains in effect until an act of Congress lifts it. Does paying the Castro regime a percentage from Cuban subscriptions constitute a violation of the embargo? A plain reading would seem to indicate "yes."

Assuming the regime agreed to Netflix operating in Cuba, did Netflix agree to any conditions regarding censorship of content the regime finds objectionable? Has Netflix agreed to “tame the wild colt” that is the internet on behalf of the Castro brothers?

It’s important for Americans to understand if the companies they do business with directly enable dictatorships in their violations of human rights. I’ve posed all these questions to the public relations department at Netflix via email and directly to Reed Hastings via Twitter. The flacks from Netflix gave a curt, evasive and unsatisfactory answer:

People in Cuba will have access to a similar catalogue to what is available in other parts of the Spanish-speaking Caribbean. We are not working with the Cuban government on content; any questions on censorship are speculative and we can't answer them. Everything that we have to say about the announcement is included in the press release that went out yesterday.

I’m sure that the catalogue they are offering is similar to that available in other countries, but that doesn’t really answer the question of what the Castro regime will allow. It’s a totalitarian dictatorship, after all, and thus one of its levers of power is control of all media.

The only conclusion one can draw is that this was a clever PR stunt intended to win a news cycle and that Netflix never believed that Cuba is a real potential market for them.

This was a way to capitalize on something that was already in the news. Interestingly, on the date of the Cuba announcement, Netflix stock went down by $1.29 as investors probably saw through the smokescreen.

The sad part is how much of the media just gobbled it up with no thought whatsoever. It’s no wonder that a fabulist like Brian Williams can sit at the anchor desk of a major network, spinning fantastic yarns about his personal heroism. Apparently nobody in mainstream media questions anything anymore.

But the real victims of the Netflix charade are Cuba’s people, as the hit-and-run media lend credibility to another false narrative about Cuba becoming more open while the signs on the ground in that country point to their rulers being as adamant as ever about maintaining strict control of anything and everything.