NFLX Netflix Inc

By Liza Lin 

SHANGHAI-- Netflix Inc., which has struggled to win government approval to operate in China, said it had struck a licensing deal with Chinese video-streaming platform iQiyi to show the U.S. company's original content here.

IQiyi is a subsidiary of Baidu Inc., which made its mark as China's most popular internet search engine and is expanding into areas as diverse as entertainment and self-driving cars.

Terms of the deal weren't disclosed. Representatives of Netflix and iQiyi declined to comment further on the deal, which was first reported by Variety.

Netflix has been aggressively pursuing international expansion as its core U.S. market matures. The producer of such shows as "House of Cards" and "Orange Is the New Black" is hoping to sign up new subscribers fast enough to offset growing content costs, as the streaming-video company invests in original programming that could have global appeal.

China, with its rising incomes and an expanding pool of consumers of online entertainment, is regarded by companies as the industry's Holy Grail. The country had 75 million paid subscribers of online video content in 2016, more than triple the 22 million in 2015, according to a recent report by the Beijing-based research company EntGroup.

The Los Gatos, Calif., company said this month U.S. and international subscriber growth slowed in the first quarter of the year, coming in below analysts expectations.

China was notably absent when Netflix rolled out its global expansion a year ago, adding 130 countries to its service map. China has been a complicated market to enter as the country's censors often block scenes they view as objectionable and have demanded increasing control of imported internet content in recent years.

Netflix, which has been trying to find a local partner in China for more than two years, has held talks with several of the country's major state-backed broadcast companies, including Wasu Media Holding Co., an online-media company backed by a coalition that includes Alibaba Group Holding Ltd. Executive Chairman Jack Ma.

The first two seasons of "House of Cards," an original Netflix series starring Kevin Spacey as scheming U.S. politician Frank Underwood, was a hit in China when it was streamed on sohu.com.

Lilian Lin contributed to this article

Write to Liza Lin at Liza.Lin@wsj.com

(END) Dow Jones Newswires

April 25, 2017 08:03 ET (12:03 GMT)

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