In Asia, Netflix trips on regulation, content, and competition
By Nataly Pak and Eveline Danubrata
SEOUL/JAKARTA, April 22 (Reuters) - Months after its global rollout, Netflix Inc is facing problems in several major Asian markets as it struggles to provide enough strong content to attract consumers amid tough local competition, and also faces many regulatory hurdles, underlining concerns about disappointing subscriber numbers reported this week.
From complaints that programming libraries offered in many countries are far smaller than in the United States to delays in offering its signature "House of Cards" series in some markets due to rights issues, the U.S. video streaming giant's January launch into 130 new markets worldwide, including a slew in Asia, has been bumpy.
When it launched in Indonesia in January, for example, Netflix ran afoul of the film censorship board for carrying content deemed inappropriately violent or sexual. The communications ministry also demanded that Netflix set up a local office and pay Indonesian taxes.
State telecoms company PT Telekomunikasi Indonesia Tbk (Telkom) will continue blocking Netflix until it adheres to regulations, Arif Prabowo, vice president for corporate communications at the carrier, told Reuters, declining to give details.
Netflix is still available in Indonesia via wifi connections and other carriers.
"Services delivered over the Internet present new questions for everyone, including policymakers, and our intention is to comply with applicable laws and regulations," said Jessica Lee, Netflix's head of communications for Asia.
"It is all part of the journey as we roll out in different countries," she said.
The cost of dealing with these kinds of issues are reflected in its results, which show that Netflix suffered a first-quarter operating loss of $104.2 million for streaming video outside the U.S., partly because of higher marketing costs, and also showed that it is earning less per subscriber overseas than at home. Continuación...