Netflix will now have a tougher time entering China. E-commerce behemoth Alibaba announced Sunday that it would launch a Netflix-like online video streaming service in China within two months. Patrick Liu, the head of Alibaba’s digital entertainment arm said that the company aims to replicate the success of Netflix and HBO in its home market, reports John Ruwitch of Reuters.
How will Alibaba offer the new service?
The new service will be called Tmall Box Office or TBO. It will combine HBO-like original productions with content purchased from China and other countries. An Alibaba spokesperson told Quartz that the streaming service will be offered through the company’s set-top boxes and smart televisions that carry its operating system.
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The Chinese digital video streaming market is fiercely competitive. Many companies are spending billions of dollars to buy content to gain an edge over their rivals. Sohu.com, Tencent, Baidu’s iQiyi, and LeTV already offer similar services, mostly for free. Alibaba said only 10% of its content would be free, while access to 90% content will require subscriptions. Users can pay either on a show-by-show basis or by monthly subscription.
Alibaba has a number of entertainment assets
Alibaba is already operating gaming and music portals in China. It owns Hong Kong-listed Alibaba Pictures, and has film-making aspirations. In recent years, Alibaba has signed several deals to strengthen its entertainment portfolio. Last year, it acquired a 16.5% stake in Youku Tudou, one of the largest digital video streaming platforms in China. It is still unclear how the new service will fit with Youku Tudou.
Last year, the Hangzhou-based e-commerce giant launched a video subscription service in collaboration with Lionsgate. Liu said Alibaba’s mission is to redefine home entertainment, and become like Netflix in the United States. Netflix has also been considering expanding into China. According to Pricewaterhouse Coopers, China’s streaming video market is estimated to grow to $214 billion by 2018.
Alibaba shares fell 0.12% to $86.50 in pre-market trading Monday.