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Warner First to Offer VOD in China

15 Jun, 2011 By: Chris Tribbey

Beginning this summer Warner Bros. will offer new-release and catalog titles on demand to consumers’ TVs in the People’s Republic of China, making it the first studio to do so.

The content will be available to as many as 200 million households via both cable and IPTV. The move toward offering easy access to legitimate sources of content is a good sign for China, where video piracy is rampant, those involved in the deal noted.

“China is developing methods for consumers to view movies outside the cinema in a legitimate fashion,” said Jim Wuthrich, president of international home video and digital distribution for Warner Bros. Home Entertainment Group. “Through YOU On Demand’s platform, millions of potential consumers will be able to view our films.  They will make it easy for consumers to see the latest films, including Harry Potter and the Deathly Hallows – Part 1.”

YOU On Demand is China’s first national PPV and VOD platform, and the service will be available to at least 3 million homes by the end of summer.

“Our distribution agreement with Warner Bros. marks a historic milestone for our company,” said Shane McMahon, YOU On Demand’s chairman and CEO. “I’m excited for the millions of Chinese consumers that will be able to experience and enjoy the very best content that Hollywood has to offer through the YOU On Demand platform.”

That announcement came just days after Chris Dodd, chairman and CEO of the Motion Picture Association of America, spoke at the Shanghai International Film Festival, telling Chinese government officials and filmmakers that studios from both countries can work together to share best practices in business.

“One of my top priorities as a representative of the American film industry is to build upon [the American and Chinese film industry] relationship, to help it deepen and blossom, so that it can form the foundation for a world class film and cultural sector,” he said. “But we know that the way to keep that growth continuing is to keep working to build our relationship with all sectors of the Chinese film industry – moviemakers, distributors, exhibitors.”

Box office revenues in China in 2010 were $1.5 billion, according to the MPAA. However, in mid-May the U.S. International Trade Commission reported that piracy and counterfeiting of U.S. products in China cost American businesses roughly $48 billion in 2009, and in February the International Intellectual Property Alliance, or IIPA, listed China at the top of its “priority watch list” for its “failure to effectively lower enterprise end-user software piracy or legalize government and state-owned enterprise use of software or publications.”

The IIPA made special note that China’s government should allow for “non-discriminatory market access for products with [intellectual property] owned or developed outside of China.”

Russ Crupnick, entertainment industry analyst with The NPD Group, said that as living standards improve in China, and more Chinese have access to broadband and HDTVs, consumers will demand more content, including VOD.

“Mitigating piracy will take a quantum leap but I think you’ll find that many consumers in developing countries will adopt Western values of convenience, choice and quality that on-demand models provide,” he said. “Will the selection be good enough, will the price be right? But honestly, as the home video market matures in developed countries of North America and Europe there’s no choice but to put down stakes in Asia, South America and other emerging territories.

“Even the wild West was tamed eventually.”



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