Netflix is going global. That means that it plans to provide service to every country in the world. With its recent quick entry into 130 countries, Netflix has become the largest of the large stream service providers. That said, it does not mean that Netflix is without competition or blockage.
Netflix has been beaten in the race to enter China, the second largest economic market in the world. MUBI made the first inroads into the Chinese subscription market with a jointly imagined and formulated venture with the Hong Kong-listed Huanxi Media Group last month. Utilizing the Huanxi Media Group connections within the Chinese fractious political machine, MUBI has leveraged itself into position to begin soliciting subscribers within China.
On the other hand, Netflix is still in a position of negotiation with the Chinese over such obstacles as censorship of video content, including nudity and political material. While Netflix is concentrating on the television series market, MUBI has focused on independent film streaming, a more readily censored product. With the obstacles in place and a competitor already entering the market, Netflix will be pushing its exclusive streaming program and its upgrades in bandwidth manipulation to get a larger share of the Chinese streaming market.
MUBI charges far less than Netflix for its service. At a $4.99 monthly subscription rate, MUBI and Huanxi Media have a distinct advantage. That power fades with the limited montage of films from which to draw. MUBI allows only a certain amount of films in its repertoire, and while it does add one film per month to its catalogue, it also reduces that list by one film per month to compensate. Otherwise, MUBI would run the risk of overwhelming its relatively weak platform. Netflix has the advantage of holding a worldwide platform that can support multiple media types and an almost infinite amount of films, television series, and games. Once the incredible difference in options comes to light to the regular viewer in China, then the choices of expense versus quantity/quality will come into play.
Netflix also is developing new technologies to enhance its repertoire. Currently, the recommended speed to download HD content (the type most in demand) is 5mbps. Netflix, with its upgrades, has been able, however, to operate well at 500 kbps (one-eighth the recommended speed) on a 420p set. Furthermore, Netflix took the issue to heart in 2015 and has concentrated on upgrading its codec through content based encoding, actually reducing bandwidth rates by 20 percent. All evidence points to Netflix continuing to build codecs that will compress videos even further in an attempt to offer the same quality regardless of limited internet connectivity.
Netflix holds the competitive edge through its immense catalog of streaming opportunities, and its continuous, and impressive, efforts to present those streams to all customers around the world regardless of connectivity issues. It remains to be seen if Netflix can overcome the political and philosophical issues within China. Any corporation that negotiates with a political machine that is ever-changing must be able to change with that political machine. Even if China became thoroughly capitalist, the likelihood of a shift in the philosophical attitudes of the populous is extremely unlikely as that philosophy has been entrenched for millennia.
Though bargaining concepts that include more access at lower speeds are attractive to us in the west, how attractive will it be to a bureaucratic system already entrenched against the influence of the west? That is the key hurdle yet to jump. MUBI was able to access the vast Chinese market through already existing connections. That is not the case with Netflix. Netflix must climb this hill and negotiate the rockslides along the way to establish the reality of a global network.