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In Asia, Netflix Trips on Regulation, Content, and Competition

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Editor

22 April 2016 14:10 WIB

Netflix Indonesia. Netflix.co.id

TEMPO.CO, Jakarta-Months after its global roll out, 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 telecommunications 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 wi-fi 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.

In South Korea, where local content is popular and consumers have numerous streaming options, the Netflix site offers fewer than 20 local TV shows or movies.

"Korean Netflix's library in terms of content is pretty thin," said Jung Dong-yoon, a 29-year-old Seoul office worker and subscriber since January.

Netflix viewers in the country also this week discovered that well-known shows including "How to Get Away with Murder" and season two of "Better Call Saul" were missing - temporarily, Netflix says - as the shows are submitted for age appropriate ratings by the country's ratings board.

Programming rights are an issue globally.

As of January, Netflix Australia, which launched service more than a year ago, offered just 443 TV shows, compared with 1,157 in the United States, and had 1,585 movies, compared with 4,593, according to Finder.com - fewer than those available in Iraq, Haiti, Cuba and many other countries.

Netflix had 34.5 million international subscribers against 47 million in the U.S. at the end of the quarter. It is unclear how many of its customers are in Asia.

REUTERS



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