Netflix recently announced that it had launched its services in 130 more countries, but China was not included. This was a big setback for investors and for the company as the region is the world’s second-largest economy. What’s even a bigger setback is that a rival movie streaming firm which focuses on Chinese independent films launched its services in China on Thursday.
Partnering with a local firm
NFLX rival MUBI entered into a partnership with Hong Kong-listed Huanxi Media Group to make its service available in China. Huanxi will be investing around $50 million and hold a 70% stake in the joint venture called MUBI China. Of that $50 million, Hunaxi “will invest $10 million directly into MUBI, taking 8 percent of the company, valuing it at $125 million,” says a report from CNBC.
MUBI is a London-based company that was founded in 2007. The company provides independent films to users in return for a monthly charge of $4.99. On each day, it adds one new film and also deletes one, so a movie is available on the platform for 30 days.
Netflix vs. MUBI
MUBI’s founder believes it can challenge Netflix in the film segment.
“As Netflix focuses on TV, their movie selection is not that great. So we can really become the most significant platform on film globally. And if you are thinking global you are thinking China,” MUBI founder and CEO Efe Cakarel told CNBC. He also said that by next year, China will overtake the U.S. as the biggest film market but acknowledged that it is a tough region to operate in. “We managed to crack this and this is why it is a big deal for the industry,” he said.
In its fight against NFLX, MUBI certainly has the upper hand as it is the first to enter China. NFLX still has not ruled out China, but CEO Reed Hastings said, it will “take some time” for the U.S. firm to enter the country.
Beating Netflix or even challenging Netflix won’t be easy for MUBI, which has 100,000 subscribers compared to over 69 million subscribers for Netflix. Apart from Netflix, MUBI will also have to compete with Internet giants like Alibaba, Tencent and Baidu. Alibaba has been testing a Netflix-like service called Tmall Box Office in China and has also launched a Chinese version of YouTube called Youku Tudou.