Netflix Plans to Break Into China Market Without Local Partners

Ted Sarandos
AP Images

Netflix's Ted Sarandos attended the party for The D Train.

The U.S. streaming giant feels partnerships can make business more complicated.

Netflix is planning to go it alone in its attempt to break into the booming China market, a move that could make it tougher to get into the notoriously difficult China market but ultimately was a more streamlined option.

Netflix CCO Ted Sarandos told Chinese reporters in Shanghai that the House of Cards producer was also planning to look at exporting content produced in China to the rest of the world, Reuters reported.

"It's unlikely that we would definitely pursue (a local partner model) as a strategy.... These ventures become very complex and very difficult to manage, and ultimately difficult to be successful," Sarandos said. Shows like House of Cards have proven very popular in China.

China is the world's largest Internet market, with 649 million users and 60 percent of the audience using smartphones and tablets to watch.

Despite being an attractive market, it can be difficult on the regulatory side — Google, YouTube, Facebook and Twitter are all blocked. Netflix will need to get local licenses itself, which can be difficult.

Sarandos said Netflix would need eight different licenses to launch in China, and he also said that TV was "subject to a censorship and regulatory environment that we haven't had to deal with."

Under new rules, foreign TV shows wishing to screen online must get censorship approval for the whole season before they can be broadcast. This would suit Netflix in some ways, as shows like House of Cards and Marco Polo are produced a whole series at a time, unlike other shows, which shoot every week.

Local rivals such as iQiyi and Tencent are already streaming many overseas shows in China.