In the latest entertainment matchup between Hollywood and Chinese tech companies, Baidu-owned internet video service iQiyi has inked a deal with California-based Lions Gate Entertainment Corp., the production company behind The Hunger Games.
Neither iQiyi or Lions Gate have released financial details of the deal, though according to a statement from the companies it will give Lions Gate access to a platform of 500 million users for upcoming titles including the latest Hunger Games installment, Divergent, and action thriller Deepwater Horizon.
The deal is by no means Lions Gate’s China debut. The company has also partnered with tech giant Alibaba’s entertainment department, partnering in October 2014 to license its content for streaming in China.
China Develops An Apetite For Streaming Hollywood
China’s video streaming market has seen rapid growth over the past five years, and major streaming services, including iQiyi, have launched subscription services for both local and foreign films. While China is known for its large online black market of pirated films and music, cheap licensed services and higher levels of disposable income have boosted the number of viewers watching subscription services.
Last month Youku Tudou, one of the country’s largest media streaming services, announced a licensing deal with Paramount Pictures, adding over 100 movie titles to their subscription service including Forrest Gump, Star Trek and Mission: Impossible. They had previously partnered with Netflix to distribute the House of Cards series, which was highly popular in China.
China’s largest internet giants are also scrambling to create Hollywood partnerships, as entertainment becomes a high-grossing investment for companies who can leverage their platforms for movie-ticketing services and merchandise retail. In September Tencent, the company behind China’s largest social app WeChat, signed a deal with Walt Disney to become the exclusive online distributor of the first six Star Wars films. They also entered a licensing agreement with HBO in November 2014 stream a number of popular series including Game of Thrones.
Both Tencent and Alibaba have launched respective film production houses in China this year, with the later also partnering with Paramount Pictures to distribute and franchise Hollywood blockbuster Mission Impossible: Rogue Nation, in theaters. Alibaba also rolled out its own subscription-based streaming service in September, Tmall Box Office, which costs 39 RMB ($6 USD approx.) per month.
While the appetite for Hollywood films and U.S. TV series is strong in China, U.S.-based streaming services have struggled to enter the market. Last month Netflix announced it would launch in four major Asian markets including South Korea, Singapore, Hong Kong and Taiwan, following an earlier launch in Japan. They have avoided the Chinese market however as regulatory concerns and stiff competition make it a complex candidate for expansion.
For now, licensing deals appear to be the easiest route for production companies looking to get their content direct to Chinese consumers. The latest deal between iQiyi and Lions Gate will also include the rights to stream some third-party films that are under a distribution contract with Lions Gate.
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