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Can Netflix Conquer China?

How Chinese blockbuster ‘Us and Them’ illustrates the streaming giant’s Asian expansion

In 2016, Netflix announced a massive global expansion, bringing the total number of countries where the movie-streaming giant operated up to 130. But the China market proved elusive.

Even without the Chinese challenge, Netflix already had plenty on its plate: Its mammoth expansion was fraught with challenges, particularly in the Asia market. First the Indonesian censorship board found that Netflix offered content that was “inappropriately violent or sexual,” convincing local carriers to block the service. Then subscriptions in South Korea floundered, as local operators provided more Korean-language content, and Netflix encountered a similar lack of localized programming when trying to reach audiences in Japan, Singapore, Hong Kong, the Philippines, and India.

Over the next two years, Netflix learned the intricacies to successfully navigating these markets by “crossing the river by feeling the stones”—strategies which the company is now utilizing to reach the Chinese market, where the company still does not have any presence (its site and app are currently blocked).

In 2017, the company announced a new licensing partnership with iQiyi, a subsidiary of Baidu, to allow Chinese viewers to legally access Netflix original content, such as Black Mirror and Stranger Things. The partnership has since developed so that Netflix has also acquired the rights to stream iQiyi’s own original content, such as Tientsin Mystic, Burning Ice, and Chosen.

Thinking to its future in China, there is no better Asian success story for Netflix than its engagement with South Korea. From a place where subscriptions stagnated, South Korea grew to be a major market, particularly due to shrewd partnerships (Netflix acquired 600 hours of TV shows from South Korea’s JTBC) and sponsorships of locally produced content. In 2017, Netflix announced two original Korean productions, Love Alarm and Kingdom, both to be released this year.

Additionally, the release of Bong Joon-ho’s feature Okja heralded a new rise for Netflix in South Korea. During press events following the release of the film, Bong Joon-ho praised Netflix for letting him “make the strange, specific movie he wanted, with no limitations.” His unhinged creativity paid off big for the company, and stirred up controversy around the world about the future of movie-streaming. Okja, which tells the tale of a Korean girl from the countryside and a genetically-modified “monster pig,” was featured in the 2017 Cannes Film Festival, where it reportedly received a four-minute standing ovation. It was ultimately snubbed during award season, though, disqualified for never having been screened in theaters, a policy Netflix will likely circumvent by arranging highly limited releases.

In May, Netflix made China-related waves when it acquired the worldwide rights to distribute tragi-romantic blockbuster 《后来的我们》 (translated as Us and Them.) The directorial debut of famed singer-actress Rene Liu tells the love story of two struggling youngsters (played Jing Boran and Zhou Dongyu) who meet while traveling home from Beijing during Chinese New Year. The story is told in flashbacks, as the couple runs into each other on a plane over a decade later and reminisces about where their relationship went wrong.

Heralded throughout China for its beautiful backdrops, realistic portrayal of the harshness of Beijing life, and the strong performances of its stars, the movie was a hit – making over 200 million USD at the box office within its first two weeks (notwithstanding some controversy over allegations that sales were inflated, due to online vendors which issued purposefully refundable tickets.)

In late June, Us and Them was released worldwide via Netflix to rave reviews. The success was noted by Rob Roy, vice-president of Asian content at Netflix, in the South China Morning Post: “At Netflix we believe great stories transcend borders. We are always in search for great content that touches the audience’s hearts and we are thrilled to bring a beautiful film like Us and Them to the service.”

This is just the beginning of Netflix’s cooperation with Chinese companies; several new partnerships are already in the works. Silvergate Media, creators of the famed animated series The Octonauts (which was picked up by the Disney Channel in the United States), is in the process of establishing a China-based content studio with Wanda. Through this partnership, Silvergate Media plans to produce two Octonaut-related films by 2020, both of which will be distributed internationally by Netflix. This past May, Netflix also paid $30 million at the Cannes Film Festival for the global distribution rights for the Chinese animated film Nex Gen.

Additionally, Pearl Studio (the former Oriental DreamWorks, now backed by Beijing-based CMC Capital Partners), has commissioned Glen Keane to direct an animated feature called Over the Moon through Netflix. The story is a modern retelling of a classic Chinese myth, as a young girl travels to the moon to meet the legendary Chinese Moon Goddess, Chang’e. It will be released in theaters in China in 2020—and to the rest of the world at the same time through Netflix. “We know Over the Moon will fascinate and inspire our Netflix members around the world,” Netflix’s Melissa Cobb was quoted.

Netflix might not be accessible in China (and may never fully be), but the company has begun to slowly establish long-term partnerships, promoting Chinese-language content. While this is doubtlessly just a part of Netflix’s Asia expansion strategy, the deal has the unintended benefit of exposing worldwide audiences to China’s stories. Now, it’s only up to Chinese filmmakers to make good ones.


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