Alibaba to Announce Streaming Service in China

Alibaba, which Reuters reports is the Chinese retail website that recently announced a successful initial public offering (IPO) in the United States, has announced that they will be releasing what has been dubbed the Netflix of China.

The name of the streaming service is Tmall Box Office (TBO) and is an attempt by Alibaba to break into what is a $6 billion market in China. The service is likely to be available in the next two months but will go up against stiff competition, particularly from streaming movie services from other large Chinese companies like Baidu and Tencent Holdings, which already have successful products on the market.

TBO is expected to differentiate itself from its competition by charging customers a monthly fee for its streaming service, similar to the Alibaba model. Most of its competitors support the streaming services with advertisements and are not used to paying for access to movies. This may be a differentiator, but may ultimately doom TBO if it cannot convince Chinese consumers of the benefits of avoiding ads. Instead, Alibaba is attempting to rely on their ability to advertise their service and to offer what they hope customers see as a premium product that is better than competitors.

Netflix has announced its own intentions to move into the Chinese market, though this announcement may limit their effectiveness if they still consider to enter China. Netflix does have original series though which an be an competitive advantage in China.

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