Netflix might currently dominate domestic markets and might be the worldwide leader in streaming with a reach extending to more than 190 countries, but Netflix has yet to extend its reach to the most populous nation on the planet: China. China is currently on pace to pass the United States as the largest movie market, and streaming services are already booming in the Middle Kingdom. Like most media available in the country, however, Chinese regulations ensure that most of these are Chinese-owned companies. Netflix had been pursuing various ways of breaking into the Chinese market, but gave them up in 2016 in the face of China’s strict regulatory and media censorship environment.
It seems Netflix wasn’t entirely read to quit chasing the dragon, however. Netflix has recently brokered an agreement with Chinese streaming service iQiyi to license several original Netflix shows for streaming in China. According to The Hollywood Reporter, the deal was announced at the 2017 APOS Expo, an annual meeting of the biggest names in Asian media, telecoms and entertainment industries.
Netflix’s vice president of content acquisition Robert Roy says that the move could be an important first step in introducing Netflix to the Chinese market and possibly creating an environment where the streaming service might find a foothold with Chinese consumers:
We closed a deal with iQiyi, which is exciting. For us, it does a couple of things. It gets our content distribution into the territory and builds awareness of the Netflix brand and Netflix content. We’d love to have direct relationship in China, and it’s just a matter of when and how, and that’s something that we’re trying to figure out over time.
Figuring things out over time has become a common theme recently for Netflix, and this latest deal with iQiyi is indicative of Netflix’s forward-looking, long-term strategy. The company is constantly growing and evolving, and continues to invest nearly its entire cash flow in future projects and original content with the expectation that its growth will continue. Whether or not those investments pan out in the long run is unknown.