Netflix negotiating with Beijing to enter China after launching in 130 more markets but will face strict controls on foreign content

Viewers would have to wait till whole seasons wrap up before the mainland censors allow foreign shows to stream online, among other headaches

PUBLISHED : Thursday, 07 January, 2016, 4:54pm
UPDATED : Thursday, 07 January, 2016, 5:28pm

Streaming pioneer Netflix launched its service in another 130 countries and territories including Hong Kong on Thursday but China remains a tougher nut to crack due to its strict controls on online streaming and foreign content.

Meanwhile, even viewers in Hong Kong expressed their disappointment on social media upon learning that hits including Breaking Bad, House of Cards and Sherlock are not available in the city yet.

In his keynote speech at the Consumer Electronics Show in Las Vegas this week, Netflix chief executive Reed Hastings said the company was hopeful of entering mainland China, the world’s second-largest economy, in the future.

“[There are] a billion Chinese that we want to give access to Netflix content,” Hastings said.

“You need specific permission from the government to operate in China. We are continuing to work on that and we are very patient.”

READ MORE: Ten popular TV shows and movies you won’t find on Hong Kong’s new Netflix

Other markets where Netflix is not available include the Crimea, North Korea and Syria - all due to US government sanctions.

In China, the central government restricts the broadcast length and number of imported TV shows and movies. Netflix said it plans to make as much content available globally without any alteration.

House of Cards, its flagship show, is already wildly popular in China. The first season accumulated 140 million play counts on Sohu.com, a local website that purchased the right to broadcast the show.

“We want citizens of the world to have the same content,” Hastings said.

Netflix is also releasing its own shows globally. Hastings said he plans to make everything on the site available worldwide within five to 10 years.

However, even after Netflix has persuaded Beijing to let it in, some content is likely to get a delayed release that may frustrate customers given the speed with which reviews go online.

Streaming websites in China must wait until foreign shows have finished broadcasting an entire season before they can air in the country, in order to give the censor’s a chance to review all episodes and make sure there are no unwelcome messages or other content.

This is in accordance with the regulations set out in September 2014 by China’s State Administration of Press, Publication, Radio, Film and Television (SAPPRFT).

READ MORE: Netflix now available in Hong Kong and almost everywhere else - except mainland China

Beijing also limits the number of imported shows that can be on shown on streaming websites in the country. Their total length should be less than 30 per cent of the total length of the domestic shows shown in the previous year by that site.

However, while foreign companies like Netflix are bracing for competition from local players like Letv, despite their diverging content, the same feeling does not seem to be reciprocated.

Letv, a popular Chinese streaming service provider that entered Hong Kong in 2014, said it welcomes such competition because at least foreign players will help grow the market and transform local viewing habits.

“Netflix has a huge content library, but the number of shows it can bring to Hong Kong will be limited [as broadcasting rights differ from country to country],” said Mok Tsui-tin, Letv’s chief executive for Asia-Pacific.

A spokesperson for Letv said their should not be much friction between the two companies because “we have totally different audiences”.

“Letv has a rich collection of Chinese, Korean and Japanese dramas, while Netflix has mostly American shows,” he said.

Due to the limits China places on foreign shows, most streaming websites in China are pivoting their resources to focus on domestic and self-produced content.

iQiyi, which is backed by China’s top search engine giant Baidu, said in October it plans to spend more than half its total budget for this year on new Chinese and self-produced shows.