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Netflix may have found its way into China through Wasu

Netflix said to be in talks with the company to help it navigate around Chinese censorship

Financial trends and news by Steven Loeb
May 15, 2015
Short URL: http://vator.tv/n/3dd0

Netflix has been looking for a way into China for a while now, and the most likely way to do that was not to go in on its own, but to partner up with another existing service in the country.

Now it looks like Netflix may have finally found that potential partner.

Netflix is currently in talks with Chinese internet TV company Wasu Media, according to a report out from Bloomberg on Thursday, though it sounds like there may also be other companies as well, though they were not named.

China's online video market is said to be worth $5.9 billion, and Wasu is one of seven companies to have received  Internet TV licenses from China’s State Administration of Press, Publication, Radio, Film and Television. So such a partnership would be necessary for Netflix to work within the government's controls over licensing for online content.

The addition of China would also no doubt help Netflix's international streaming numbers, which have been growing rapidly. In the most recent quarter, it reported 20.9  million international streaming customers, up from 12.7 million in the same period in 2014.

At the same time, domestic growth is much slower, with 41.3 million domestic subscribers in Q1 2015, up from 35.7 million in Q1 2014.

Netflix has not been shy about its plans to enter the Chinese market. Earlier this week Ted Sarandos, chief content officer at Netflix, talked openly about how the company would approach this, saying "our intent is not to go into China without a partner, our intent to try to figure out China and how to get there."

"It could be with a partner, it could be with production partners. we’re open to all different models to get there eventually because we want to be fully global, and it’s a pretty big chunk of the world to have an asterisk. We’re definitely working on trying to figure out our entry point," he said. "From a programming standpoint, their tastes don't run that much different. We’re looking forward to figuring that out. [But] there’s not much marginal cost to not being in China. It’s not urgent, it’s not an on-fire issue, but as we try to be more global, we want to be part of China too."

A Netflix spokesperson told Bloomberg that t plans “to be nearly global by the end of 2016." VatorNews has reached out to Netflix for its own comment on this report and we will update this story if we learn more.  

Censorship is a big issue in China, but this is not the first time that Netflix has entered into a country that heavily restricts content.

In early February Netflix announced that it has expanded to Cuba, offering it service for $7.99 to those in the country who have access to Internet connections and access to international payment methods.

Cuban citizens were given access to "a curated selection of popular movies and TV shows," including Netflix original series like House of Cards, Orange is the New Black and Marco Polo, as well as kids programming like All Hail King Julien, The Adventures of Puss in Boots and original documentaries including Virunga and The Square.

(Image source: techinasia.com)


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