Warner Bros. will become the first Hollywood studio to operate transactional video-on-demand services in China following a deal with Union Voole Technology, a Beijing-based broadband tech and content distribution company.
Service will be priced and positioned to make it competitive with pirate DVDs and compatible with China’s fast-developing broadband Internet culture. Movies will be available for DRM-protected rental- only at 4 yuan-7 yuan (59¢-$1.03).
Warner Bros. Digital Distribution said it will offer a mix of new movies, classics and TV series, some of which have not been released in China. First film titles include “I Am Legend,” “Fool’s Gold” and “Speed Racer.”
Titles will be offered with a choice of subtitled English soundtrack or high- quality Chinese language dub. Studio said its consumer research shows this to be a significant benefit vs. pirated copies.
“This new service will provide more convenience and choice to consumers, and, at the same time, help us to combat piracy by offering great Warner Bros. movies in a high quality, legitimate format,” said Union Voole CEO Shao Yiding.
Warner estimates some 300 websites offer video or video-sharing services in China, and only a small proportion offer movies. Fewer still license rights to Hollywood movies, and there have been several court actions against Internet cafes, where most video watching takes place, and the portals and specialty on-demand content companies that supply them.
Recent government enforcement has shut down a number of illegal video site operators, though grounds for shutdowns have predominantly been content or permit issues rather than the licensing of the content.
“We believe that China is a significant market for us to expand our digital distribution strategy, and this partnership with Voole is an important first step in helping us to reach the broadest audience for our movies,” said Marc Gareton, exec VP of international, Warner Bros. Digital Distribution.
China already has significant broadband usage, with a projected 230 million users by the end of 2008, according to Warner Bros.’ home entertainment joint venture in China, CAV Warner.
In late 2006, 20th Century Fox Home Entertainment launched a similar joint venture with Zoke Culture. The venture challenged disc pirates by releasing legitimate DVDs and VCDs with good quality mastering, competitive prices and shortened release holdbacks.