When Netflix recently announced it was going to be available in 130 new countries, there was one gigantic hole in the list:
Appearing on stage at the DLD Conference in Munich, Germany today, Netflix CEO Reed Hastings expressed hope that the company is moving toward a launch in that country and said he is optimistic that talks with Chinese regulators are progressing. But he also declined to put any kind of firm timetable on those plans.
Hastings noted that China’s market is massive but said that the rules for entrance are complicated. He pointed to the six years Apple spent negotiating with China’s political and telecom leaders before it was able to start selling the first iPhone in the country.
“We take away from that a great sense of patience,” Hastings said. “It may be soon that we have a license in China. It may take several years. So we’re going to be patient.”
Netflix is now available in 160 countries and is gradually shifting toward focusing on its own original content. Hastings said that such content is proving to be a big draw across borders, no matter where it originates. And he believes that this will eventually be an advantage in China, where he joked that many bloggers believe “House of Cards” is a documentary about the U.S. government.
In fact, according to one study, more than 20 million people in China already access Netflix via VPN services that override geo-blocking, though Netflix said recently it plans to crack down on VPN services.
Still, Hastings seemed to hint that Netflix may have a breakthrough in China sooner, rather than later. He pointed out that iTunes announced last September that it was finally able to start selling movies in China. And in December, Disney partnered with China’s Alibaba to launch a streaming service in the country.
The biggest question is whether these other streaming and video services are able to gain too big of a foothold before Netflix officially enters. As Netflix’s valuation grows, so do expectations for subscriber growth. Cracking the massive Chinese market would certainly be transformative for Netflix, in terms of scale.