Netflix abandons China adventure

Originals like Stranger Things have helped boost Netflix subscriber numbers

MIPCOM: Netflix is scrapping plans to launch an SVoD service in China because of a “challenging” regulatory environment in the country.

The US streaming giant announced its decision as part of the release of its third-quarter 2016 earnings yesterday.

However, it added: “We still have a long-term desire to serve the Chinese people directly, and hope to launch our service in China eventually.”

The Californian firm said it will soon license content to China’s existing content providers and expected revenue from licensing deals to be “modest.”

Last week, Netflix CEO Reed Hastings said the likelihood of the US SVoD service entering China, one of only a few territories where it has no presence, “doesn’t look good.”

Reed Hastings

Netflix had been aiming to launch in the world’s most populous territory for the last two years and previously lined up several potential partners to enter the country’s booming online video market.

When Netflix rolled out into a further 130 territories in January, Hastings said the company remained intent on having a presence in China in the future, despite still not being available in that territory along with Crimea, North Korea and Syria.

Despite its China decision, Netflix yesterday announced it had added 3.2 million global customers in the last three months, far more than the two million predicted by analysts.

In the US, numbers rose 21% to 370,000 in same period with shows including Stranger Things and Narcos helping the streamer’s total global subscriber count reach 83.3 million.

Netflix’s quarterly revenues also rose 31% to US$2.29bn, triggering a 20% jump in the firm’s share price.

In related news, Netflix has picked up coming-of-age comedy series Atypical from The Goldbergs writer Robia Rashid.