Chinese e-commerce giant Alibaba, leading commercial broadcaster Hunan TV and film and TV producer DMG (“Iron Man 3”) have partnered to launch a home entertainment platform that combines Internet, broadcast TV and phone services.
DMG will lead the venture as operator of the system and as its entertainment content provider. Alibaba’s Tmall will integrate its e-commerce backbone and also supply entertainment content. Hunan TV, which earlier this year pacted with Lionsgate to finance a slate of Hollywood movies, will provide content and access to its provincial, government-supported broadcasting network with 70 million inhabitants.
Following a pilot phase in Hunan province, the service will gradually be expand to cover the whole of China, which has some 400 million TV homes.
Anticipated revenue streams will come from subscriptions (driven by film and TV content), gaming, apps, education and e-commerce.
“The intelligent home entertainment platform combines OTT and digital video through Alibaba’s YunOS to give consumers unparalleled flexibility and content choice,” DMG said.
The platform has three modules: live+timeshift (including on-demand video, lookback, pause, and voice control functionality): categorized entrances; and recommendations. Content includes live TV channels, Chinese and international films, games, education offerings and Tmall shopping services.
DMG explains, that while Chinese audiences like to watch TV together, traditional cable services have been losing market share to IPTV offerings that do not have broadcast content.
“Unlike other services out there, this home entertainment platform will change the landscape of the entire industry in China. For the first time, consumers will have an amazing level of choice and options for services – from entertainment to education and everything in between,” said Dan Mintz, CEO of DMG.
DMG has positioned itself as a bridge between the Chinese and U.S. film industries and been involved in movies including “Looper,” “Transcendence” and the upcoming “Point Break” remake. It says it will be increasingly involved in technology plays.
The company, which is listed on the Shenzhen stock market, made a preliminary announcement of the three way deal on June 30. It also said that it was raising RMB800 million ($89 million) through a sales of debt securities.
- In an unconnected announcement Zhejiang Huace, one of China’s leading TV groups, with film credits that include John Woo’s “The Crossing”, said that it will raise RMB1.4 billion ($226 million) through a private share placing. It says the move will help it replenish its capital. Several companies have responded to the Chinese government’s measures to boost confidence in the stock market by issuing new shares. If they are held by major shareholders they may be subject to lockup and be untradeable for several months.