Market's first PPV/VOD service expands with Mouse House movies

Disney is joining Warner Bros. and Lionsgate to provide films to You On Demand, touted as the first national pay-per-view and video-on-demand service in China.

The Mouse House will offer recent releases and titles from its library, including “The Muppets,” “Cars 2,” “The Lion King,” “Mary Poppins” and “Beauty and the Beast,” along with pics it distributes for DreamWorks, like “War Horse” and “The Help.”

Disney is selecting which of the films it will offer each year through the service that launched last month and is currently available in three million homes and is aiming to expand to 11 million households by the end of the year.

There are 200 million cable homes in China.

Disney Media Distribution, which licenses the conglom’s programming to platforms in Asia Pacific, also handles ABC News programming, specials, like the Academy Awards, and distribution of the Disney Channel and Playhouse Disney in the region.

“Disney films define quality family entertainment and we’re thrilled that You On Demand will be their showcase to the world’s largest television audience,” said Shane McMahon, chairman and CEO of You On Demand.

McMahon, a former WWE executive and son of the company’s colorful chairman Vince McMahon, joined YOD in 2010 to grow the company’s presence in China.

Since then, the New York-based exec’s locked down films and TV shows from Warner Bros. and Lionsgate, as well.

You On Demand, operates as a 20-year joint venture with CCTV-6’s TV arm of China Home Cinema.

Its films and TV shows are currently available as PPV titles through cable boxes, which helped entice Hollywood to offer up their entertainment, given that it’s easier to protect content from piracy through set tops and monitor how the entertainment is being consumed.

Each film costs around $1 to $3, a pricepoint that was purposely kept low to entice consumers to make the switch from pirated fare to legitimately distribbed pics at a higher quality through cable boxes already in their homes.

“They’re already paying for pirated content,” McMahon said, which has encouraged him because “that means there’s demand.”

China is still a largely untested market for VOD, but auds there have proved hungry for movies at megaplexes being built at a rapid rate and it’s only a matter of time before those Hollywood pics are demanded at home, as well.

“China is developing methods for consumers to view movies outside the cinema in a legitimate fashion,” said Jim Wuthric, prexy of intl home video and digital distribution, Warner Bros. Home Entertainment Group. “Through You On Demand’s platform, millions of potential consumers will be able to view our films.”

Other studios have been experimenting with other VOD services including Fox’s pair up with Joy.cn and Sohu Video. Joy.cn also has films from Sony and Disney. Sony also has a deal with Anyplex and Wasu Digital TV.

Celestial Tiger Entertainment (a joint venture with Saban Capital Group, Lionsgate and Astro’s Celestial Pictures), is handling Lionsgate’s titles as the company’s exclusive sales agent in Greater China and Southeast Asia.

McMahon has additional plans to grow YOD soon through a subscription-based service (similar to Netflix) that will charge $5 a month this summer. YOD could also branch out online and onto mobile platforms.

As executive VP of global media at WWE, McMahon was instrumental in expanding WWE’s reach overseas, brokering lucrative deals for the company’s TV shows and PPVs in 145 countries in Europe, Asia, Latin and South America to broaden its audience. He would also like to see YOD eventually expand to India, Russia and Brazil.

Filed Under:

Follow @Variety on Twitter for breaking news, reviews and more