Netflix CEO Reed Hastings Isn’t Optimistic About Streaming Into China
Will the Chinese population ever get to “Netflix and chill”? Not according to Reed Hastings. The Netflix CEO does not believe that his corporation will be able to enter and succeed in the Chinese market.
China is currently the most populous country in the world with 1.357 billion people. Its expanding consumer class has led many international companies to invest in the country. The Chinese government, however, has an incredibly tight hold on the media and has blocked numerous major corporations.
Hastings noted, “We’re focused on the rest of the world. Disney, who is very good in China, had their movie service shut down. Apple, who is very good in China, had their movie service closed down. It doesn’t look good.”
Hasting’s comment from this morning at the New Yorker TechFest in New York led to a 4.8 decrease in Netflix’s share price. Thankfully for Netflix, its shares have already recovered.
Netflix expanded to one hundred and thirty countries this past June. Important new markets included Russia, India, and South Korea. The company has the global rights to its own content, but failed to get the license in their new, local markets. During their rapid expansion, they also only added a few languages such as Chinese, Korean, and Arabic. Most of Netflix’s international content is in English.
Both Netflix and economists expect that the company will lose revenue or break even in 2016, but increase its profits in 2017. It increased subscription prices in the United States this past year in order to later fund international investments. It remains to be seen whether this financial prediction will come true and whether Netflix will always be excluded from the Chinese market.
China is currently the most populous country in the world with 1.357 billion people. Its expanding consumer class has led many international companies to invest in the country. The Chinese government, however, has an incredibly tight hold on the media and has blocked numerous major corporations.
Hastings noted, “We’re focused on the rest of the world. Disney, who is very good in China, had their movie service shut down. Apple, who is very good in China, had their movie service closed down. It doesn’t look good.”
Hasting’s comment from this morning at the New Yorker TechFest in New York led to a 4.8 decrease in Netflix’s share price. Thankfully for Netflix, its shares have already recovered.
Netflix expanded to one hundred and thirty countries this past June. Important new markets included Russia, India, and South Korea. The company has the global rights to its own content, but failed to get the license in their new, local markets. During their rapid expansion, they also only added a few languages such as Chinese, Korean, and Arabic. Most of Netflix’s international content is in English.
Both Netflix and economists expect that the company will lose revenue or break even in 2016, but increase its profits in 2017. It increased subscription prices in the United States this past year in order to later fund international investments. It remains to be seen whether this financial prediction will come true and whether Netflix will always be excluded from the Chinese market.
