Netflix confirms launch in Japan this fall; signs content deal with Fuji Media

Subscription video on demand leader Netflix (NASDAQ: NFLX) will launch this fall in Japan, about six months after announcing it would bring its service to the country. And in keeping with its model of blending locally produced content with its other internationally licensed movies and TV series, Netflix has signed a deal with Fuji Media Holdings to feature two of its series on the service.

Greg Peters, president of Netflix Japan, told Bloomberg Business that the company expects "over a period of time we'll do many such deals." He added that piracy is low in Japan, and that customers there recognize and pay for value, making the country a "great market for high-value products."

But Fuji's series won't just be available to viewers in Japan. Netflix is moving forward with its global licensing strategy, meaning brand-new episodes of "Terrace House" and "Underwear" will be available outside the country, too--giving the series exposure beyond Japan's borders.

Besides Fuji, Netflix is working with Yoshimoto Kogyo talent agency to make local programs, Variety reported earlier this month. Netflix is underwriting the cost of production in exchange for exclusive streaming rights.

Netflix announced its entry into Japan in February of this year, marking its first foray into the Asia-Pacific market but not its last. The company is reportedly exploring ways to enter China, where foreign media companies cannot directly operate. That service would likely take the form of a content partnership with a state-approved media company.

The SVOD provider, after a successful expansion into western Europe last year, has also launched in Cuba--a country where less than 5 percent of the population has access to the Internet--and Australia, a long-awaited entry into a country where many were already accessing its U.S. content through VPN masks.

The continued expansion has pushed its worldwide subscriber count above 62 million and boosted its stock to almost $700 per share. The company last week announced a stock split of seven-to-one that will take place on July 15 and give smaller investors a chance at its red-hot shares.

Netflix's international growth is a crucial part of its continued profitability. Licensing costs continue to make up a huge part of its streaming content obligations, which reached $9.8 billion in the first quarter of 2015--$2.7 billion more than a year previous. And competition is edging in, particularly in the U.S. space, where Hulu is tying up a number of exclusive content deals and offering its subscribers a deeply discounted subscription to Showtime.

For more:
- Bloomberg Business has this story
- see this Variety story

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