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What Is Netflix’s Edge In China’s Increasingly Competitive Video Streaming Subscription Market? 17 June 2015

As the world’s largest video on demand subscription service, Netflix seems like a company poised to dominate China’s multibillion-dollar video streaming market. However, with an increasing number of homegrown companies rolling out their own versions of the video subscription service, Netflix continues to lose its edge over the competition.

According to Market Watch, Netflix Inc.’s stock dropped 1.4 percent in pre-market trade Monday, following an announcement by Chinese tech giant Alibaba unveiling TBO, or T-Mall Box Office, a subscription service that sets out to be a hybrid of Netflix and HBO. Given Alibaba’s home court advantage, analysts believe that whatever leg up Netflix had going into China may be diminished as TBO and already existing services like China’s LeTV also gain popularity.

Still, Netflix has experience in global expansion in terms of providing content tailored to international markets that other companies have yet to reveal. Content-wise, Netflix’s expansion into Britain, Scandinavia and Latin America matched the expansion of its content, obtaining licenses for shows that would have traction in each specific market.

While homegrown Chinese companies can compete with each other to license Chinese-language shows, if Western television is what Chinese want, Netflix is still a proven leader. While TBO still aims to secure content, Netflix has a growing catalog of originally produced ‘new on VOD‘ shows, comedy specials and documentaries. Series like “House of Cards” became a surprising hit in the country, even counting China’s much feared anti-corruption chief Wang Qishan as a fan, after the second season was released on video streaming site Sohu last year through a temporary licensing agreement.

Read the entire story here.

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