Cannes: Possible Partners for Netflix’s Move Into China

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Netflix CEO Reed Hastings

After Ted Sarandos annouced that he would be reversing course on finding a Chinese partner, a handful of companies have emerged as frontrunners.

Netflix is casting a wide net in seeking Chinese partners while in Cannes, industry sources say, and the group of potential targets is diverse, ranging from online streaming sites to a state conglomerate once run by the People’s Liberation Army.

“They’ve been talking to a lot of different people — state media, industrial groups, whoever will give them the wide access they need in China,” said one industry source who requested anonymity.

Earlier this year, Netflix chief content officer Ted Sarandos said the streaming giant was planning to go it alone in its attempt to break into the booming China market, but Sarandos qualified these remarks May 14 in Cannes, saying the company intended to “try to figure out China and how to get there.”

“There are unique operating models in China we have not worked with before. We’ve not acquired companies, we’ve not worked with partners before in any of our territories. But if that’s the cost of doing business in China, we’ll figure that out,” Sarandos told an audience in Cannes.

 



Netflix is a known quantity in China, mostly through the political thriller House of Cards, which has avoided censorship — possibly because of its depiction of the more venal political elements in a democracy — and is streamed through various sites.

So who would be the best fit for Netflix in China? Five companies lead the pack:

CNTV Netflix reportedly has met with the 
net-based broadcast arm of the state TV channel CCTV and the state-owned international 
radio broadcaster China Radio International.

LeTV Netflix reps also have reportedly spoken to LeTV, which meets many of the company’s requirements because it has its own set-top-box units, recently launched its first smartphone and hooked up with director Tsui Hark on a Silicon Valley venture.

Wasu Media The Chinese media group backed by Alibaba chief Jack Ma is one of the only companies to have been given an Internet TV license by China’s official regulator, the State Administration of Press, Publication, Radio, Film and Television. Wasu, which operates cable TV and broadband networks in Hangzhou, where Alibaba is based, has been working with Ma’s company to produce set-top boxes since 2013.

The Poly Group A conglomerate that was formed out of the business assets of China’s military, its business interests range from real estate to culture to mineral exploration to explosives.

 

BesTV Shanghai Media Group’s BesTV unit would be a good fit since its restructuring last year resulted in it merging into a giant Internet and TV company. SMG owns and operates 13 radio stations, 15 TV channels, 15 digital pay TV channels and eight publications.

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