02
Dec

Netflix in China: Cultural Divide?

Leave a Comment  /  Posted in Amazon

Hmmm. Two interesting points in the second half of this Huffington Post article — linking the fact that Mark Cuban last month upped his stake in Netflix with the idea that it is a ripe takeover target for Chinese e-commerce giant Alibaba.

Reports are circulating that Alibaba is eyeing a stake in Lionsgate, a studio with a large film and TV library that includes the “Hunger Games” and “Twilight” films. So for a moment, we’ll go with the notion that Alibaba could be interested in Netflix.

In my book, I detailed the on-again, off-again talks that Reed Hastings and Jeff Bezos have had over the years exploring partnerships, cross promotions, and yes, a merger, between their two companies.

It looked like a great fit: Netflix wanted access to Amazon’s huge customer base, and Amazon wanted to hedge cooling DVD sales with hot online rental. The two CEOs could never agree on financial terms, and ultimately, tax issues related to Netflix’s DVD distribution centers may have derailed a merger.

Yet it seemed culturally dissonant to wedge a software/entertainment company like Netflix into a retailer — like selling bacon at a bicycle shop.

Now comes the Chinese version of Amazon, apparently looking for a way to jump-start the incredibly complicated and costly process of setting up an online streaming service from scratch.

Netflix is looking to expand internationally to offset cooling domestic growth, and China, Hastings once told me, is one of his dream markets. A corporate marriage between these two seems auspicious, yet China, with its strict censorship, seems antithetical to what Netflix is all about: the content you want, when and where you want it. Bacon, bicycle.

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