Netflix Having Trouble Breaking into China Market

It seems like Netflix is everywhere. The majority of American homes have Netflix and the company has rolled out an aggressive International plan that has allowed several other countries to enjoy the service. One country they are having trouble breaking into though is China. The plan was to enter the market of the most populated nation in the world in 2016, though now those plans are in question.

In March, Netflix became available in Australia and New Zealand. The service will be rolled out in Southeast Asia and Japan in the third quarter of 2015. China, however, seems to be a problem for the massive company. They were shooting for 2016, but now they just don’t know.

Part of the problem seems that Netflix is not sure how to break into the Chinese market. First, they noted that they would be launching their own operations in China. Later, they suggested that a partnership with another Chinese company might be the way to go. They even shortlisted and mentioned a few companies, Wasu Media, among them.

However, it was announced this week that senior executives at Netflix were uncertain about when bringing Netflix to China would be possible.

“China continues to be sort of its own entity in terms of the challenges and the particular characteristics of the market. We’re taking our time and being deliberate in finding a path and the right model to work,” said David Wells, Netflix’s chief financial officer. Wells went on to say, “We hope to be able to launch the service there next year; and we’ll continue to treat it sort of as its own territory.”

Reed Hastings, the chairman and CEO of Netflix didn’t seem certain on the release in China in 2016, saying,  “We hope to open the entire rest of the world in 2016. So China, again, we still have some things to figure out, so I suppose that’s possible. But in the rest of the world, we’re pretty confident that we’ll open. And then we’ll have to see how successful we are in Poland. We have to see how successful we are in Indonesia. So there’s still a lot of work to do.”

Much of the problem appears to be regulatory. Government clearance is required for any operation or business partnership taking place in the country due to strict media regulations.

It is believed that the hope for the 2016 launch comes from the release of Netflix original film, Crouching Tiger, Hidden Dragon 2. Chief content officer, Ted Sarandos stated, “I think it’s important for people to understand that these movies are not TV movies; they’re of the same size and scale and scope of the movies you will see in theaters. So one way to do that is to have them in theaters sometimes.”

Going into more specifics about the upcoming movies he said, “theater owners will want to book them in their theaters at the same time that they’re on Netflix.” He concluded his thoughts on the China release by saying, “This afforded us to do a premiere a few days early in China and helped to launch the film, and the film brand, around the world.”