Netflix Hits the Great Wall of China


“Disney, which is very good in China, had their movie service shutdown. Apple, which is very good in China, had their movie service closed down. It doesn’t look good.”
– Reed Hastings, Netflix CEO

Netflix Looks to China

At The New Yorker’s TechFest event last Friday the CEO of Netflix addressed the China question in stark terms, by stating Netflix’s chance to break into China, “doesn’t look good.”

Netflix has been touting their expansion into 130 additional markets in January 2016. While this news is impressive, it does not move the needle much in terms of overall subscribers.

The streaming giant has been available in Latin America most of Northern Europe since 2012. Netflix started offering their service in France, Germany, Italy, and smaller EU markets over a year ago, where they faced stiff local competition and weaker demand than they expected.

The latest European subscriber data suggests that growth as slowed and is starting to level off. Netflix has already reached near-saturation levels in North America.

China was Netflix’s shot at unlimited growth, but it appears greener online pastures are for local companies only.

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DisneyLife Sent Packing

Chinese authorities recently shuttered DisneyLife, Disney’s first foray into the SVOD market with their local partner Alibaba.

Although there was no official reason for the suspension, it is relevant that the DisneyLife service tried to skirt around the 70% local content rule.

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Local firms have been able to circumvent this rule in some instances, such as Tencent’s Hollywood VIP streaming service, but different rules are applied to foreign firms.

If Disney was not able to bend the rules after having just built a theme park in Shanghai and by being Hollywood’s most successful studio on the mainland, then no foreign firms stand a chance.