Netflix ditches plans to launch in China

Reed Hastings, co-founder and CEO of Netflix, delivers a keynote address at the 2016 CES trade show in Las Vegas, Nevada, on January 6, 2016.

Steve Marcus/Reuters

Netflix has scrapped its most ambitious expansion yet, scuttling plans to expand into China.

While the streaming service, which already operates in 190 countries, had been exploring launching in the lucrative market of the world’s most populous country, Netflix now has cited a “challenging” regulatory environment as reason for it to abandon those plans.

During the release of its third-quarter earnings for 2016, the company announced it was switching to a strategy of licensing its content to existing providers in China instead. “We expect revenue from this licensing will be modest,” the company announced, according to Variety.

The main issue seemed to be content-related, as Netflix would most likely be required to censor some of its content in order to meet Chinese regulatory standards. 

But the plan for a full Netflix operation in China hasn’t been abandoned completely. 

“We still have a long term desire to serve the Chinese people directly, and hope to launch our service in China eventually,” the company said.