Netflix may be keen to break into the Chinese market as part of its long-term global expansion ambitions, but Alibaba is determined to stop the company having it all its own way.
Alibaba, an enormous Web company better known for its e-commerce business than streaming video, confirmed over the weekend that it’s about to launch a Netflix-like service in its home country, population 1.36 billion.
Patrick Liu, Alibaba’s head of digital entertainment, told reporters in Shanghai on Sunday the new service will launch in about two months. Called Tmall Box Office (TBO), about 90 percent of the content will be subscription-based or viewable on a pay-per-view basis, while the remaining 10 percent will be offered for free. While Netflix is yet to arrive in China, TBO would go up against similar offerings from the likes of Baidu and Tencent Holdings.
In comments likely to focus the minds of Netflix executives as they investigate the viability of taking on the enormous Chinese market, Liu said TBO’s mission is to “redefine home entertainment,” adding, “Our goal is to become like HBO in the United States, to become like Netflix in the United States.”
Just like Netflix, Alibaba would create its own content for the service, as well as buy existing shows from producers in its own country and around the world.
With hundreds of millions of households happily eating up masses of TV entertainment, great riches await any service that can crack the Chinese market. Alibaba’s head start will come as a disappointment to Netflix CEO Reed Hastings and his team, though it’s safe to assume Alibaba’s effort will do little to dampen Netflix’s global ambitions in the video streaming market.
As a Chinese company already well established in the country, Alibaba is well placed to make a go of any online streaming business. For example, like Amazon, it could easily incentivize its TBO service by bundling it with other services.
California-based Netflix was last month reported to be in talks with a number of Chinese firms as it explores its options for entering the market.
The video streaming company is already prepping its first big step into the Asian market with a launch in Japan scheduled for this fall.
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