Ad Age reports that Alibaba, China's largest e-commerce company, announced on June 14th plans to launch its paid video streaming service "Tmall Box Office" (TBO) domestically within two months.
According to Patrick Liu, who oversees the company's Digital Entertainment Group, TBO will distribute both content purchased domestically and internationally, as well as content produced in-house. Approximately 90% of the content will be paid, with plans to offer either monthly subscriptions or pay-per-view options. Liu commented, "We aim to become a presence like Netflix or HBO in the US."
While China's online video market is expanding, free streaming supported by advertising remains dominant, leading some to question whether paid services will gain traction. As of mid-June, iQiyi, a major video platform, had only 5 million paid subscribers.
Furthermore, a survey conducted last year by U.S. research firm Forrester Research found that 58% of Chinese viewers responded, "If I can watch free videos, I don't mind viewing ads." Xiao Fen Wang, a senior analyst at Forrester, stated, "The majority of consumers are unlikely to accept paying for content."
On the other hand, considering Alibaba's status as an e-commerce operator, launching a video streaming service could potentially create a new advertising model linking content with its online shopping platforms. For instance, Alibaba could display products sold on its e-commerce sites within its original content, or enter sponsorship agreements with companies it partners with in its e-commerce business.
According to data from the China Internet Network Information Center, the country currently has 649 million internet users, with approximately 70% watching videos online. Existing video streaming companies include Youku Tudou, in which Alibaba holds a 16.5% stake, as well as iQiyi, Tencent, Sohu, and LeTV.
Source: Ad Age
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