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Netflix in Talks With China’s Wasu to Enter Country: Report

Netflix is in discussions with Internet TV company Wasu Media as a means to breaking in to the massive China market.

According to a report by Bloomberg, Netflix has held talks with Wasu — and other companies — about forming a possible partnership in the world’s most-populous nation.

Netflix had previously indicated that it might attempt a go-it-alone strategy in China. That route seemed highly problematic to industry observers, as the company would have been unlikely to have been granted a business license. It would also face fierce competition from well-entrenched local rivals, including: Youku Tudou, backed by ecommerce giant Alibaba Group; Baidu-backed iQIYI; and Tencent’s Tencent Movies.

Wasu Media delivers Internet TV services via proprietary set-tops. Jack Ma’s Alibaba owns a 20% stake in the company.

For Netflix, a local partnership would be essential to comply with China’s censorship restrictions and content regulations. Those have become significantly tighter in the online sector over the past year, with the latest set of regulations effective since April 1.

Netflix chief content officer Ted Sarandos, a keynote speaker at an event in Cannes Friday, addressed the question of China.

“We want China to be part of our operating strategy,” Sarandos said, adding that the company is open to a partnership. “That will be a new skill for us, too. What’s the right path?”

He acknowledged the market was complicated, but also said: “People in China recognize ‘House of Cards’ as a Netflix show.”

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