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With Government Backing, China Close to a Netflix-Like Video Subscription Site

The government-backed M1905.com site, which will have movie streaming subscriptions starting later this year.

A deal between state-backed China Movie Channel and Jiaflix will bring a Netflix-like video subscription service to consumers in China later this year. The paid-for movie streaming will be coming to the China Movie Channel’s already established web subsidiary M1905.com (pictured above) – which was started in 2004 and claims to have more than 3 million registered users – in Q4 of this year, and promises “the best that Hollywood has to offer to viewers in China.”

So far, there’s only one Hollywood studio onboard with the deal: Viacom-owned Paramount Pictures. The movie news site Variety says that there’ll be a subscription service – consumable across the M1905 website and apps for iPhone and various tablets – plus “the option for a pay-per-view service as well.”

Looking back at the press release, we see that China Movie Channel is the official internet movie site of SARFT (the State Administration of Radio, Film and Television), which controls China’s state-owned media – like the TV movie channel CCTV6 – and regulates all private companies operating in this space. That sounds like a conflict of interest. Remember that SARFT regulates the likes of Youku (NYSE:YOKU) and Tudou (NASDAQ:TUDO), the country’s top two video-streaming sites, who have long been doing per-per-view for some major movies, and also feature free and licensed TV serials from across the globe that are supported by ads. As yet, no private company in China has gone for a Netflix-esque subscription model.

The new M1905 movie service will indeed challenge the major, established video sites. But the market leaders will no doubt be hoping that their much greater pulling power – and a general reluctance among Chinese consumers to be tied down to a service, as we’ve seen with iPhone users wanting to avoid China Unicom contract deals – can fend off the state-backed competition. Plus, Youku and Tudou – and Baidu’s Qiyi as well – already have a greater diversity of licensed, streaming content, including from more Hollywood studios. For example, Youku has an agreement with Warner Bros for over 400 major movie titles.

As for Jiaflix, it’s a Sino-US entity – headed by the experienced entrepreneurs Sid Ganis, Marc Ganis and Kenneth Huang – which seems to have sprung out of nowhere just for this joint-venture deal with China Movie Channel. Jiaflix is promising more studio deals in the future.

[Source: Variety]



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