Netflix is partnering with local companies to expand into China

With more than a billion people living in China, it’s essential for Netflix to expand into the country if it has any chance of fulfilling its dream to become a global power, which is exactly what the company is doing. Despite saying a few months ago that it’s unlikely that Netflix would pursue a partnership with a local Chinese company, reports seem to suggest that that’s exactly what the company is doing with China’s Wasu Media Holding Company.

Late last week, news broke that American subscription-based streaming video service Netflix is in talks with Jack Ma-backed Wasu Media Holding Company to bring Netflix to China. Netflix, the maker of popular original shows like House of Cards and Orange is the New Black, has aspirations of being a global power, and it can hardly realize those without China’s billion-plus internet users. Netflix spokeswoman Anne Marie Squeo told reporters Netflix plans “to be nearly global by the end of 2016,” which implies a China launch could be coming soon. The news caused a jump in the stock prices of both Netflix and Wasu, but the personally I think it’s cause for concern rather than excitement. First of all, what happened to Netflix’s plan to enter China without a partner? Just two months ago, Netflix chief content officer Ted Sarandos told reporters: “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.”