Telefonica online unit seeks Brazil-to-U.S. video stream

Reuters News
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Posted: Mar 16, 2012 8:03 PM
Telefonica online unit seeks Brazil-to-U.S. video stream

By Cyntia Barrera

MEXICO CITY (Reuters) - Telefonica's Internet unit Terra wants to create a video-streaming mammoth, stretching from the United States to Brazil, as it challenges rivals like rental firm Netflix and tycoon Carlos Slim's fledgling U.S. web TV venture.

Terra, which has been selling online content in Latin America for more than a decade, is revamping its service under the SundayTV brand, adding more content providers, striking deals with web-ready television makers and improving the technology.

Fernando Madeira, Terra's chief executive, said on Friday the company ended 2011 with 75,000 paying subscribers in the region and half a million registered users -- or those who purchase content occasionally on its existing Terra.TV website.

"The goal is pretty high: we want to reach 250,000 paying subscribers and close to a million registered users by year end," he told Reuters in a phone interview from Brazil.

Basic monthly fees for the six countries where SundayTV launched last week - Argentina, Chile, Colombia, Mexico, Peru and Brazil - average $7, similar to what Netflix is charging in the region.

Netflix launched in more than 40 Latin American and Caribbean countries last year [ID:nS1E78B10I] and it has held talks with some of the largest U.S. cable operators to discuss adding the online movie streaming service to their cable offering. [ID:nL2E8E6EL1]

"We want to be in all Latin American countries in the first half of the year," Madeira said. "And there is a plan to reach, possibly by year end, the United States and Europe too."

Hispanics would be the natural target for SundayTV in the United States. The group is the largest and fastest-growing minority in the United States, totaling 50.5 million in 2010, according to the U.S. Census Bureau. Mexican-Americans comprised 63 percent of that total.

But Terra may soon find a new kid on the block: billionaire Slim. The world's richest man recently unveiled details on his U.S. Internet television network project, Ora.TV, set to launch by October.

Slim, blocked by Mexican regulators from tapping television in his home country, is testing the waters in the United States, where he is financing a project fronted by friend and former CNN host Larry King.

"Anyone new in the field has to build from scratch," Madeira said.

SundayTV's content can be downloaded on television, smartphones and tablets.

(Reporting By Cyntia Barrera Diaz)