On Wednesday, Netflix’s ambition to expand to 130 international markets ran into a potential roadblock, as Indonesia’s state-owned provider of telecommunications services blocked access to the Netflix online video streaming service, citing the company’s lack of an operating permit and the availability of violent and adult program content on the Netflix website.  

Telkom, Indonesia’s top provider of mobile phone, fixed voice and broadband offerings, shut off subscriber access to Netflix in spite of the fact that Indonesia’s Information and Communications Technology Ministry had provided Netflix with a grace period until February 7 in which to freely enter the national market.  A ministry official maintained, however, that the long-term right of Netflix to operate in Indonesia—the world’s fourth most populous country—is conditioned upon Netflix establishing a legal entity in Indonesia and applying for a license to offer content electronically.  Citing complaints from the Indonesian Censor Board as well as from local cable operators, a Telkom executive told reporters that Netflix needs to establish a partnership with a domestic Internet service provider to ensure that its content can be filtered in accordance with state law.  Observers also indicate that similar issues of licensing and censorship have been raised by Netflix’s entry into other foreign markets such as Vietnam and Kenya.  

While emphasizing his company’s desire “to find partnerships and to maintain good relationships with authorities,” a Netflix official implied that his company is under no obligation to seek licensing as it is “an Internet television network, not a traditional broadcaster.”  Addressing complaints about content, the official added that, because “we are an on-demand service that allows people to choose to subscribe and decide what, where and when to watch . . . we empower consumers to make smart viewing choices.”