Netflix to Debut in China Via Original Content Licensing Deal With iQIYI

Global streaming giant Netflix has struck its first licensing deal in China with one of the massive market’s leading streaming platforms, iQIYI.

To date, Netflix has been blocked by Middle Kingdom regulators from operating its own service in the world’s most populous nation.

The deal comes just over a year after Netflix took its service global with just a handful of territories — including China, Iran and North Korea — missing from its planet-wide strategy.

The announcement was made on the sidelines of the annual APOS conference in Indonesia, by the streaming service’s VP of content acquisition, Robert Roy. Netflix spokesmen told Variety that the deal was too new to provide many details, such as when the content will make its Chinese debut.

However, it is understood that Netflix Original content will be available on a day-and-date or near simultaneous basis, along with availability in other territories.

iQIYI claims over 500 million users monthly for its advertising supported (AVoD) platform. The company is also using original content to pioneer the conversion of many of its users to Netflix-like subscription models (SVoD).

Netflix had previously tried to enter China as a service operator, but acknowledged last year that regulatory hurdles were proving too great in the near term. It indicated on its third-quarter earnings call in late 2016 that licensing would likely be its route into the region.

China maintains a tight control of media, communications and the Internet within its own borders. Most foreign broadcasters are barred from operating in China except in limited circumstances and both Disney and Apple have seen their fledgling online services in China crimped in the past year.

Growing censorship controls have also made it harder to air foreign content on Chinese streaming services. Censors now require entire series to be approved before a show can begin to be carried by a platform, something that restricted Netflix-style binge viewing. It is not clear how iQIYI will overcome this issue and still make content available in synch with Netflix’s simultaneous global release pattern.