Can Netflix, the licensee of pickup games, realize its "Chinese dream"?

Can Netflix, the licensee of pickup games, realize its "Chinese dream"?

Earlier this year, news broke that Netflix, the US streaming video service provider, would officially enter the Chinese online video market. At the time, Netflix Chief Content Officer Ted Sarandos publicly stated, "We are unlikely to adopt a model of cooperating with local manufacturers because such cooperation is very complex, difficult to manage, and ultimately difficult to succeed."

But in a recent report by the Wall Street Journal, executives from Wasu Media and BesTV said that Netflix is ​​in talks with the two companies on content licenses. It seems that despite the complexity of China's online video market, Netflix is ​​determined to tackle the tough market of China in the face of a potential market of more than one billion users and a future market value of 200 billion. Why did they choose Wasu and BesTV? After Netflix's plan to enter China was confirmed, senior executives represented by Sarandos knew that if Netflix wanted to win a place in the Chinese market, it would first need to apply for eight different licenses, and the supervision of content "needs to go through reviews and supervision that we have never seen before." In the field of Internet TV licensees in China, the State Administration of Radio, Film and Television has stopped issuing relevant licenses. As far as the current status of the seven major Internet TV licensees is concerned, only Wasu Media and BesTV may obtain cooperation matters. First is Wasu Media; Wasu Media's Internet TV license was applied for by Zhejiang TV and Hangzhou Radio and Television Station. In April last year, when Wasu Media issued its shares privately, Hangzhou Yunxi Investment Partnership, jointly initiated by Shi Yuzhu and Hangzhou Yunhuang Investment Management Co., Ltd. controlled by Jack Ma, acquired 287 million shares of Wasu, accounting for 20% of the shares. As a Chinese Internet company successfully listed in the United States, Alibaba's market value once exceeded the combined market value of the two major American e-commerce companies, Amazon and eBay. The US capital market is extremely optimistic about Alibaba, which is not only reflected in the total amount of financing at the time of its listing, but also in the fact that Alibaba is a shareholder behind Netflix's choice of Wasu Media for license cooperation. The second is BesTV; as a new media company under SMG, BesTV is in charge of the operation of the Internet TV license obtained by Shanghai Radio and Television Station. The relevant specific work is handled by Shanghai Shiyun Network Technology Co., Ltd., which is 51% controlled by BesTV and 49% by Lenovo. When talking about the advantages of cooperation between BesTV and foreign-funded enterprises, it is inevitable to think of the entry of Xbox One and PS4 game consoles into China, which was a hot topic last year. Especially after absorbing and merging "Oriental Pearl", BesTV has sufficient experience in the three aspects of film and television content, omni-channel linkage and service application. In the "serial number" supervision work of the State Administration of Radio, Film and Television on the OTT box market at the beginning of this year, there was only one OTT set-top box with video on demand function in the entire Chinese OTT market that met the relevant approval standards, and that was the Xbox One under the cooperation of BesTV. What is a "moderate" video service? At the beginning of this year, Netflix CEO Reed Hastings said in an interview: "We are clear about what we want to do in each country, but we are still exploring new options in China." Regarding the plan to enter China this time, Netflix said that if it can obtain relevant licenses and other issues, Netflix will launch a "moderate" video service in China, a market with a large number of users. Regarding the understanding of "moderate", Hastings once said that he hopes the company will launch a paid video playback service without advertising in the Chinese market and stick to the company's traditional model instead of looking for advertisers. As we all know, in the Chinese video service market, users have long been accustomed to the form of free video with interstitial ads, and the "contrary" to this business model is the paid ad-free model dominated by Netflix in the American video market. In the video on demand service provided by Netflix to users, because there is no advertising content, users need to pay the corresponding fees on a monthly basis. Obviously, if Netflix continues to perform its local paid business model in the Chinese video market, it will not be able to withstand the competitive pressure from the free model of the domestic video website industry; and if it promotes the free model of interstitial ads like "when in Rome", Netflix will also have to face the content copyright issue that is particularly important in the field of domestic video websites. No matter which form, it has unfavorable factors for Netflix, which originated from streaming video services, and the established national conditions in China are difficult to change in a short period of time. The only thing we can be sure of is that Netflix, which has promoted and operated its own online video services in about 50 countries, will not give up the Chinese online video market under the pace of global expansion. In addition, people familiar with the matter said that the content license partner that Netflix hopes to find this time must also be a partner that has obtained content licenses for all devices including mobile phones, PCs and set-top boxes. This is also in line with the growing strength of China's online video market driven by the mobile Internet.  

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.

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