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The Netflix empire encompasses the entire world – almost. Here’s an in-depth look at what’s stopping Netflix from entering the only 4 places on planet Earth that don’t have Netflix: China, North Korea, Syria and Crimea.
The main obstacle standing in Netflix’s way in China is censorship.
China’s censors are notoriously tough. Any movies or shows that depict violence, anti-authoritarian sentiments, anti-military attitudes or erotic images are strictly prohibited in People’s Republic. Authorities have gone so far as to prohibit the eating of bananas on live streams.
In an interview with Wired, assistant professor of media studies at University of Virginia Aynne Kokas explained just how burdensome China’s censorship laws are on streaming platforms that operate in the region.
“Any foreign TV show that’s distributed on a Chinese platform or foreign platform has to be viewed and censored by regulators even before it gets on it.”
Pushing a content through the censorship pipeline can take as long as a year. Even if a show or movie makes it through, Chinese authorities can change their mind and cut it down at any time.
When Netflix sold the rights to some of its original shows to Chinese streaming site iQIYI in June, experts read the agreement as a sign that Netflix has given up on the prospect of collecting subscription fees inside China.
After iQIYI and Netflix shook hands in April, Chinese authorities allowed iQIYI to release BoJack Horseman – a cartoon about a washed-up celebrity horse in June. BoJack remained on the site for two days. Then, Chinese censors decided to pull the show in order to “adjust the content.”
Months later, BoJack Horseman still seems to be stuck in censorship purgatory.
After searching iQIYI for Netflix content, the only titles I could find were a handful of cooking shows, Marvel’s Luke Cage and – oddly enough – the true crime documentary Making a Murderer.
In addition to dealing with censorship difficulties, Netflix would have to expose its trade secrets to operate in China. In 2015, China passed a new law requiring all foreign tech firms to hand over their source code for “security purposes.” The same law requires that foreign technology companies integrate Chinese encryption algorithms into their software.
For obvious reasons, Netflix isn’t coming to North Korea anytime soon.
For one thing, the internet as we know it simply doesn’t exist within North Korea’s borders. There are only 28 websites in North Korea’s rigid, walled-off version of the web.
Even if North Korea became an open democracy tomorrow and the US government dropped its sanctions against the region, Netflix still wouldn’t gain much ground because of crushing poverty.
Experts on North Korea estimate that the average North Korean makes about $166 per month. The median monthly household income for the United States was $4647 in 2015 according a Census ACS survey. Ten dollars gets you only 50 megabytes of data in North Korea, but for the same price you can get 1 gigabyte of access in the US.
In other words: Americans earn 27 times more than North Koreans on average, yet the internet is 20 times more expensive in the DPRK.
An average North Korean salary doesn’t even cover the costs of streaming an entire Netflix movie via the web. A single Netflix movie consumes about 1 gigabyte of bandwidth, which would result in a $200 charge if you streamed it in North Korea.
According to a UN report, 83 percent of Syrians were living below the poverty line in 2015 and half of the population was grappling with extreme poverty. Unemployment was at 55 percent overall and four out of five youths were out work.
Even if the economy of Syria improves to the point where the average person could afford Netflix, the streaming giant would still have to somehow push each of its films through a strict movie censorship gauntlet that’s been in place since the 1970s
Additionally, Netflix would need to secure special permission from the US government if it chose to attempt to operate in the region.
The US government placed heavy sanctions on Syria back in 2004 to punish the country’s government for supporting terrorism, developing weapons of mass destruction and obstructing the US in Iraq. US sanctions explicitly prohibit “the direct or indirect exportation, re-exportation, sale, or supply of any services to Syria from the United States.”
In early 2014, Russia annexed region of the Ukraine known as Crimea. The annexation was a controversial move that outraged the international community and resulted in US-led sanctions against Russia.
Even though some sanctions against Russia have been relaxed, Obama’s executive order 13685 is still in effect. Executive order 13685 specifically prohibits “all direct and indirect transactions (including financial, trade, and other commercial transactions) by U.S. persons or within the United States to or from Crimea unless authorized by OFAC or exempted by statute.”
The executive order will probably remain on the books because Congress seems unlikely to budge any further on the subject of sanctions anytime soon. In August, Congress gave itself the power to block any attempt by Trump to weaken existing sanctions. The restriction has probably prevented Trump from nullifying executive order 13685, which specifically forbids U.S. persons from doing business in Crimea.
Even if Netflix is ever given the go-ahead to enter Crimea, the company has little to gain there. Even though Crimea’s beaches and warm climate has made it a popular hangout spot for foreign celebrities, the average Crimean only makes around $200 a month.
Another factor that may be contributing to Netflix’s absence in Crimea could be the fact that people in the region don’t seem particularly interested in buying what Netflix has to offer.
In total, Netflix has only 100,000 total subscribers in Russia according to the Russian government – that’s why Netflix was given permission to continue operating in the country, despite a recent law limiting foreign ownership of streaming platforms to 20 percent stakes.
In a recent survey conducted by the digital security firm Irdeto, less than 6% of Russians preferred original content from Netflix, Hulu and other OTT providers.
The region’s indifference to piracy may also have something to do with Netflix’s absence in Crimea. 87% of Russians don’t even realize that piracy is illegal – and only 12% said that they’d stop pirating films after being informed of the damage that piracy inflicts on content creators.
Ukrainians appear to be apathetic about piracy issues, as well. In September, the International Intellectual Property Alliance recommended that the US slap Ukraine with sanctions for not doing enough to enforce copyright laws.