Netflix: China expansion unlikely

Netflix chief Ted Sarandos said that the streamer is unlikely to look to expand business in China, during the UBS 46^thAnnual Global Media and Communications Conference.

Sarandos said that work with the nation has been, for the most part, “frustrating distraction”, and that it will not be looking to invest its time there unless China eventually becomes more open to Western media companies.

“It’s not baked into our business much at all. I think in general we kind of have a licensing deal. We licensed them for our shows. It’s very, very random what gets in and what doesn’t,” says Sarandos.

“You can really spin up your wheels trying to get a lot of programming sold into China and then for no rhyme or reason, the show gets blocked or kicked out.”

China’s rigid foreign content restrictions set by the nation’s Radio and Television Administration, which recently saw it outlaw foreign TV shows in their entirety for prime time and place a 30% quota on streaming platforms for imported content, has seen some media companies hesitate to strike business in the territory.

The territory has, however, recently overtaken the UK to become the second-largest programming market in the world after the US, according the HIS Markit. This makes it attractive for various media companies including Endemol Shine, CBS and more who have recently struck deals in the territory.

China is one of the few territories in Asia that Netflix will not be targeting heading into 2019.

Sarandos reinforced that a lot of content spend next year will be focused on international originals to reflect the streamer’s international growth. Around 80% of new subscriber growth is coming internationally, according to the exec.

One part of Asia that the streamer will have “a very aggressive agenda” in is India. Netflix has 12 local language original series and 20 original local language films “coming out and in various states of production” at the moment.

“We think it’s a big market and it’s going to continue to grow and we want to be in early, following the success we were able to get with Sacred Games and Love Per Square Foot and  all the different original projects there that have really been resonating in India, in a way that I didn’t even think was possible to be honest with you,” said Sarandos.