Netflix makes China move with iQiyi

Global streaming giant Netflix has made its breakthrough in China thanks to a licensing deal with local player iQiyi.

Reed Hastings

The country’s strict media regulations have so far blocked Netflix from gaining access to a market of a billion people as part of its global roll-out.

But Netflix announced today at the APOS Conference in Indonesia that it had reached an agreement with iQiyi for its original content to be made available on the Beijing-based firm’s platform at the same time it is launched around the world.

IQiyi, which is backed by search giant Baidu, is moving from an ad-supported model to a Netflix-style subscription business as it competes with other giants in the local VOD space such as Tencent and Alibaba.

In 2015 Netflix chief content officer Ted Sarandos said the company was keen to launch in China and was unlikely to pursue a local partnership.

“It’s unlikely that we would definitely pursue a local partner model as a strategy,” he said. “These ventures become very complex and very difficult to manage, and ultimately it’s difficult to be successful.”

The service subsequently rolled out in 130 countries around the world at the start of 2016 but China was not among them. CEO Reed Hastings said Netflix remained intent on having a presence in the country in the future.

By October last year those plans seemed to have been abandoned due to a “challenging regulatory environment.”

Hastings said at the time: “Disney, which is very good in China, had their movie service shut down. Apple, which is very good in China, had their movie service closed down. It doesn’t look good.”