On April 17th, according to foreign media reports, Reed Hastings, chief executive of video site Netflix, said on Wednesday that the company hopes to introduce paid video service without advertising in the Chinese market, insisting on the company's tradition. The model does not go looking for advertisers.
The U.S. company had previously stated that it plans to launch "small-scale" services in China, provided that it can obtain licenses to conduct business in China. Chinese consumers are accustomed to watching entertainment programs for free. These contents are either supported by advertisements or come from pirated channels.
Netflix offers TV shows and movie on demand services. These programs have no advertisements and consumers who want to watch need to pay monthly fees.
"What we are good at is there is no content for advertising," Hastings said in an interview. "This may lead to the fact that in the first few years we can only do business in parts of China, but this is the plan."
Netflix currently operates its own online video service in about 50 countries. The company’s goal is to expand its audience market to 200 by the end of 2016. Under the aggressive overseas growth strategy, the company broke its own expectations and the number of paying users reached 62.3 million in the first quarter.
For China, "We will continue to look for opportunities to communicate with Chinese companies and US companies that have performed successfully or encountered difficulties in the Chinese market," Hastings said. "This is a gradual process."
Netflix chief operating officer Ted Sarandos said in an interview last month that the company may enter the Chinese market without local partners. China is known for its strict supervision and censorship system. Such an approach may make it more difficult for the company to do business in China.
However, Saranddo said to analysts on Wednesday that the media's report "is slightly out of context".
In a conference call after the publication of the financial statements, Salandos said, "We very much hope to conduct business in China and we will try various forms."
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