Deal is in conjunction with existing Baidu-backed streaming service iQiyi.

Netflix, has announced a major plus for its Asian operations: a deal with China. This is a turnaround from its CEO’s comment only last October that there had been no change in the company’s ability to get government approval for streaming. So what changed? For starters, this deal is in conjunction with an existing streaming service, Baidu-backed iQiyi. Also, this is (for now) limited to original programming rather than the floodgate-influx of Western content.

Netflix signs deal in China in conjunction with existing Baidu-backed streaming service iQiyi

Deal limited to original programming – for now, at least.

 

Take access for granted

As anyone who’s traveled abroad can tell you, having a VPN is crucial for using the internet in the way you’re used to. CNN correspondent Will Ripley praised his VPN for allowing him to access important sites from his current location in North Korea, but for the average traveler it can make-or-break whether you access even the most mundane websites, like YouTube or Netflix.

In many cases, it’s a simple licensing agreement; at the same time, blocking of websites can also be due to agreements with the ISPs, who might not want you coming to Europe and streaming movies for hours on end in your hotel room. In any event, Netflix has struggled in the past with some of its international agreements, going so far as to say that the chances of any headway in certain markets were “slim.”

Could it be?

Now, here’s some purely fun speculation about the timeline of this agreement: this announcement comes only months after Netflix said there was almost no chance of a deal in China anytime soon. While deals like this one are months and even years in the making, recent tensions between Trump and China over the escalated threat between the US and North Korea have put China firmly in an unenviable position. They risk alienating a vital trade partner through Trump’s oft-spouted threats of trade sanctions, while simultaneously watching chaos grow on its own border. A business deal at a time like this can show that China values its western economic friends while not requiring an all-out commitment to take sides.

Early reports on how this will impact Netflix have indicated that it will add around three million new subscribers, and the resulting fundraising outside the US will be somewhere around $1bn.