Netflix said in talks to enter China with Jack Ma-backed Wasu
Netflix is in talks with a Chinese media company backed by Jack Ma and other possible partners as it seeks entry into the country’s $5.9 billion online video market, according to people familiar with the matter.
Netflix has held discussions with companies including Wasu Media Holding about forming a partnership, according to the people, who asked not to be identified because the talks are private. Netflix plans “to be nearly global by the end of 2016,” a spokeswoman, Anne Marie Squeo, said in response to questions about a possible China partnership.
Entering China would allow Netflix to take advantage of what’s forecast to be explosive growth in online television in the nation of 1.4 billion people. The market is expected to almost triple to 90 billion yuan by 2018, according to Shanghai- based Internet consultant IResearch.
A local partnership would be essential given the Chinese government’s strict controls over licensing for online content. Netflix wants a partner that has licenses for content on all devices — including mobile phones, computers and set-top boxes, according to the people. China’s State Administration of Press, Publication, Radio, Film and Television has given Internet TV licenses to seven companies, including Wasu.
Wasu didn’t immediately respond to an e-mail seeking comment. Two phone calls to Wasu’s general line weren’t answered.
Netflix, based in Los Gatos, California, is investing heavily in original programming to keep the U.S. business growing and support international expansion. Chief Content Office Ted Sarandos told a May 13 investor conference that Netflix intends to “try to figure out China and how to get there.” The company doesn’t intend to go to China without a partner, he said.
“We’re open to all different models to get there eventually, because we want to be fully global,” he said. “And it’s a pretty big chunk of the world to have an asterisk.”
Netflix would need to sort out content censorship regulations with Chinese authorities. Starting this April, new episodes of foreign programs can’t be shown until after the shows’ seasons have ended, according to a government notice.
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