Netflix Chief Hastings Says China Entry ‘Doesn’t Look Good’

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  • Disney, Apple troubles show difficulty of offering video: CEO
  • Theater chains are ‘strangling the movie business’: Hastings

Netflix Struggles to Enter China Market

Netflix Inc.’s likelihood of entering the Chinese market, one of the few countries where it doesn’t offer streaming video service, “doesn’t look good,” Chief Executive Officer Reed Hastings said.

“We’re focused on the rest of the world,” Hastings said Friday at the New Yorker TechFest in New York. “Disney, who is very good in China, had their movie service shut down. Apple, who is very good in China, had their movie service closed down. It doesn’t look good.”

Netflix shares had plunged as much as 4.8 percent in early trading following Hastings’s comments, though they recovered and opened little changed in New York. Through Thursday, they had slid 8.1 percent this year on concern that Hastings would have trouble replicating his U.S. success throughout the world. China, with its large population and expanding consumer class, has represented a tantalizing opportunity, but the government’s tight control over media and internet services has blocked Hastings’ path so far.

Netflix has continued to build its arsenal of exclusive programming, including the rights to first-run movies. The company announced a deal this week with the iPic Theaters chain to release some original films on the company’s 113 screens, a way to assure filmmakers they can still get a theatrical release when they do deals with Netflix.

The National Association of Theatre Owners, which has long sought to protect movie theaters’ ability to show films exclusively before they’re available on television, sounded a note of caution about the Netflix-iPic deal. “Simultaneous release, in practice, has reduced both theatrical and home revenues when it has been tried,” NATO CEO John Fithian said in a statement this week.

Hastings was unsympathetic to Fithian’s view Friday. “Theater chains are strangling the movie business” by refusing to allow more experimentation on when and how movies get released, he said.