Netflix has decided to bow out of china in the short term, citing issues with regulations around content services in the country.
Netflix announced this news to shareholders this week alongside strong third quarter results. The company announced that its streaming revenues had now hit $2.2 billion, representing a 36% year-over-year rise.
According to the announcement, 40% of its revenue is now outside the US but China is clearly not a market that will be helping to boost this anytime soon by itself, instead opting for partnerships.
The company told shareholders; “The regulatory environment for foreign digital content services in China has become challenging… We now plan to license content to existing online service providers in China rather than operate our own service in China in the near term.”
The South China Morning Post reported earlier this year that Netflix was already in talks with LeCo, a Chinese business that has online video and smart TV operations.
Despite slowing down on expansion in China, Asia will still be a core market for growth for the streaming giant. In 2016, after having only been in Japan, the company launched in Hong Kong, Singapore, South Korea and Taiwan.