Netflix Scores Deal with China’s iQiyi

Netflix has probably scored its biggest goal yet with China.

Netflix has recently struck a licensing deal with Baidu’s iQiyi, China’s leading streaming platform which is one of the top video portals in China nearing a whopping 500 million viewers a month.

Baidu’s iQiyi has recently raised $1.5 billion to seek out new content and build its own subscription service much like Netflix. It started out with an ad-supported model but has been slowly transitioning to a subscription which mirrors other competitors.

Last October, Netflix admitted that regulations of the country to foreign digital content has become challenging. This prompted Netflix to decide to just license their content to the local companies in the country instead of running their own service and therefore directly streaming it to China’s astoundingly massive audience. With the choice of just licensing their content, Netflix only expects a modest income from it.

Netflix isn’t the only one rushing for the gold in China. Many western media and even tech companies have been continuously trying to open their business in China for many decades. However, the fact remains that due to the heavy censorship of the country, heavy regulation occurs especially to western content. As a matter of fact, China has its own version of Google which is Baidu and its own version of Facebook which is Weibo because the two giant companies still cannot penetrate the heavy regulations imposed by the country.

Netflix wants to join Disney and Apple, one of the few western companies that have had success in China but this may take a long time. Co-founder and CEO of Netflix, Reed Hastings has said in January that they would need government permission and they need to work with the government to develop relationships with them.

One of Netflix’s challenges is the entire series has to be approved before a certain show can be aired which restricts Netflix’s video on demand binge style viewing in the country.

Until now, the most populated country in the world still has Netflix blocked by Chinese regulators thus preventing the streaming giant from operating its services there. Hastings admitted that a Chinese Netflix release was most likely unlikely in the near future this is why Netflix is opting to just license content to the heavily regulated country.

So for now, Netflix will mostly focus on licensing and distributing its content in Mainland China.

With that said, Baidu’s iQiyi will show selected content from Netflix but it is still unclear what shows are covered.  Robert Roy states that this move does a few things for Netflix. This would apparently get their content distributed into the territory and makes the Chinese market aware of the Netflix brand and its content.

Netflix decided to not share anymore details of said deal including which shows will be airing in China and when. It is definitely confirmed however that Netflix original content will make its way to China via iQiyi readily available and with no delay just like the rest of the world.

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