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Globalizing Netflix to China

Wrapping Up: What Can Netflix Do?

  • Netflix is already a powerful company that receives 200 million daily views (Coonan, 2014).

  • Netflix will need to expand their already existing series productions to include shows directed at Chinese audiences, or at least work with local Chinese producers to put good content on the market that Chinese consumers will enjoy. This will make them stand out and generate revenue through chinese subscribers.

ATTENTION GRABBER

(thinking about popcorn activity with Chinese regulations)

Benefits of China

China's growing Economy

Barriers to Entry

“The consumer’s in control of the experience they get to watch when they want, they get to pause it when they want, they get to play it when they want, watch it how and where they want” (Cook, 2014).

Seizing Opportunities

China only allows 34 foreign films to be shown in theaters each year...

To keep subscriber numbers up, a new market in necessary. “Netflix… could roughly double its subscribers worldwide, to 130 million by the end of the decade, with the majority of viewers living outside the United States” (Scott & Peltier, 2015).

“China already has become a major importer of industrial and consumer goods” (Weidenbaum, 2004).

To keep subscriber numbers up, a new market in necessary. “Netflix… could roughly double its subscribers worldwide, to 130 million by the end of the decade, with the majority of viewers living outside the United States” (Scott & Peltier, 2015).

Along with the growing domestic revenues, the international revenues have also grown dramatically within the last few quarters. This is something Netflix should capitalize on and use to their advantage.

External Benefits

“The revenue the company generates from its new international business also helps bolster the company against foreign developers encroaching on its home turf” (Ferranti, 2000).

Current Competition

Weidenbaum claims that “U.S. employees obtained more job security as outsourcing helps the company stay competitive, as well as generate new jobs and a rise in salaries” (Weidenbaum, 2004).

Banned films:

-Pirates of the Caribbean: At Worlds End

-Avatar

-The Departed

-Lara Croft Tomb Raider: The Cradle of life

According to Coonan (2014), “Youku Tudou net revenues were $148.9 million"

Cultural Adaptations

With such large revenue numbers, Netflix will have a difficult time competing with Youku Tudou

Companies such as YouTube which are currently advertisement based operations looking towards future subscription viewer base perspectives on a global level present further U.S competition for Netflix (Ettinger, 2013).

  • In fact, the most popular shows viewed in other Asian markets are The Walking Dead, The Shield and Under the Dome, as well as Downton Abbey, Sherlock and the Japanese anime series Naruto, most of which are American programs. With that said, Netflix has accomplished the language barrier needed to transfer movies from English to the Chinese language. (Coonan, 2014).

  • Netflix’s CEO and Founder, Hastings, explains “The consumer’s in control of the experience they get to watch when they want, they get to pause it when they want, they get to play it when they want, watch it how and where they want” (Cook, 2014)

The appearance of new competition and demand can cause the benefits of globalization to quickly be too much for a company, causing failure. This is a potential future for Netflix, if globalization is done incorrectly

China's Regulations

Many Chinese companies offer American films for free, or at low rates, to user’s months after the movie’s original release date and with limited selection. This lack of variety causes increased piracy for American and Chinese film making companies.

There was a recent ruling passed by the Motion Picture Association of America that repealed some of the rules in China that dealt with the way their state companies selected and distributed imported films (Movement on movies, 2009)

Netflix will need to spend their time making content appropriate for Chinese audiences and letting the Chinese movie market know that they are seriously interested in becoming a powerful contender.

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