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Netflix enters China via licensing deal with top video streaming service iQiyi



China has long eluded Netflix. The company officially gave up on its original plan to enter the country last October in favor of licensing deals, and now it has inked its first major deal to give its programming a presence on Chinese soil.

Baidu’s iQiyi, a top video portal in China with nearly 500 million monthly viewers, has agreed to a deal that will see it show some Netflix content, according to The Hollywood Reporter, although it isn’t clear exactly which titles are covered. A Netflix spokesperson confirmed the deal to us at TechCrunch.

Netflix previously said that regulatory barriers had prevented it from launching its service in China — Syria and North Korea are the only two countries worldwide where it is not present — but a spokesperson told The Hollywood Reporter that it hasn’t entirely completely abandoned its China goal.

“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,” Robert Roy, Netflix’s vice president of content acquisition, told the publication.

Amazon is another global player that has been locked out of China due to regulatory concerns.

For now, though, Netflix is focused on closing similar distribution deals for Mainland China. It previously licensed out ‘House of Cards’ to video service Sohu, before regulators pulled it from China, but its agreement with iQiyi is likely to greatly increase its exposure in China.

iQiyi, which is owned by search engine giant Baidu, recently raised $1.5 billion to pursue new content and build out its Netflix-subscription service. The company began with an ad-supported model, but it is transitioning towards subscriptions like other rivals. iQiyi claims 481 million users and 5.579 billion hours of time spent on its service each month. The service is engaged in a dogfight with Alibaba-owned Youku Tudou, acquired via a $3.5 billion deal in 2015, and rival services from Sohu and Tencent.

Netflix itself just reached 100 million subscribers, thanks to strong international growth, and it revealed plans to raise $1 billion to finance more video content and other strategies.



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