U.S television shows and films are the latest hot commodity in the Chinese entertainment market with the country's three leading internet companies announcing they had secured partnerships with major U.S filmmakers and production companies.
While the trend is a boon to major Hollywood film studios it highlights the stiff competition facing Netflix, Apple and other major U.S. tech firms in the video streaming market.
Tencent announced it had signed deals with 20th Century Fox and Disney for exclusive rights to distribute the upcoming Star Wars sequels, while one of China's biggest video streaming sites, Youku Tudou, announced a partnership with Paramount Pictures to stream 100 movies in China, including the block busters Shrek, Star Trek and Transformers.
Youku Tudou Chairman Victor Koo said "The consumer-driven demand for premium online services in China is growing rapidly. With top-branded content such as Paramount Picture's array of films, our commitment to enhancing our subscription services to create a premium experience and drive consumer-based revenue continues in earnest."
The Tencent and Youku Tudou announcements came hot on the heel of China's leading e-commerce company Alibaba, announcing it was launching a Netflix-type streaming service.
Alibaba head of digital entertainment Patrick Liu said “Our mission, the mission of all of Alibaba, is to redefine home entertainment. Our goal is to become like HBO in the United States, to become like Netflix in the United States.”
Entertainment experts say the three companies will make their money from charging monthly fees varying between $3 and $8 for access for premium content and overseas movies and films, which considering China’s huge population, will net them billions of dollars.
They say for foreign film and TV production companies, a partnership with a Chinese distributor gives them opportunities to both create legitimate distribution channels in a country renowned for piracy, and, avoid the Chinese government imposed limits on non-locally produced films being screened in the country.
In the past film production companies had skirted the non-locally produced rules by entering into co-production partnerships with Chinese filmmakers similar to the deal Paramount signed with Alibaba’s production company Alibaba Film for its latest Mission Impossible movie.