Hollywood Studios Aim to Compete with Online Pirates in China

Hollywood films are now starting to go online in China at low prices aimed at luring users away from pirated copies.

Yesterday, Youlu.com, China’s largest online video sharing site, announced that it was streaming the Hollywood blockbuster, Inception, as part of a new move to monetize the viewing of U.S. blockbuster movies.

The company said that they had a signed deal with Warner Bros. to stream the film. The movie will be available on Youku Premium.

Hollywood blockbuster movies are widely available in the form of pirated copies on the Internet in China, and they are often available at prices of around $1.

Users on Youku Premium can now choose to pay $0.75 or lower to watch a high-definition Hollywood movie, like Inception. They also have the option to pay $3 to view a larger range of videos on Youku Premium for a month.

No information has been revealed regarding the financial deal between Youku and Warners Bros.

The majority of online services showing videos at no costs in China often recoup their losses by means of advertisements. These services do license such content from domestic and overseas studios.

Many analysts are saying that even with low costs, legitimate movies will struggle to beat out pirated copies in China. Many Internet users in China already know that such content can be obtained online at no costs, and they also know how to download them.

Analysts also agree that the paid video market in China is a small one, with very few users who will be willing to dish up the cash to watch movies online.

Some analysts are also saying that Youku may not have generated sufficient income from advertising in recouping its expenses and may now be exploring other ways in generating income from its services.

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