Netflix, the online and mail DVD delivery service, plans to expand to 43 countries in Latin America later this year, and is looking to Europe as well.  The company will launch its streaming service in Spain and the U.K. as early as the first quarter 2012, according to reports.

Netflix, which launched its first international streaming service in Canada last year, announced an ambitious plan earlier this month to tackle 43 countries in Latin America and the Caribbean in the second half of 2011. Now Variety reports Netflix has already talked with European film distributors about its plans to expand to the continent.

“We think the international opportunities for us to build profitable businesses may be quite large, but the rapid expansion will lower global operating margins as long as there are additional markets in which we can wisely invest,” Netflix CEO Reed Hastings wrote in response to the company’s long-term future growth back in December 2010.

Netflix will probably choose Spain and the U.K. as its first two European pilot markets before introducing its streaming service across the entire continent.

Spain is known for being a center for digital piracy, which makes it a good candidate for Netflix. The company has often been referred to as an attractive alternative to illegal streaming and downloading because of its relatively low subscription cost and enormous library of content.  Furthermore, unlike illegal streaming websites, the company can offer a quality video stream with few service interruptions.

In the UK, things are quite the opposite. The British government provides a free streaming video of public programming through the BBC iPlayer.   The iPlayer isn’t a true competitor to Netflix’s Watch Instantly streaming service, but there is no shortage of competition. If Netflix does enter the U.K. market, it will be going up against Amazon-owned LoveFilm and News Corp.’s BSkyB streaming service as well.

Netflix might be having trouble keeping its customers happy at home, but that’s not going to slow its international expansion plans. The news that Netflix is being even more aggressive on the international market comes to light as the company faces criticism from existing users in the U.S. The company’s announcement earlier this week that it’s separating its DVD-by-mail and streaming service plans has been met by widespread disapproval. Moreover, while a number of its existing customers say they might quit Netflix all together, expanding more aggressively in international markets could more than make up for slower growth at home.