Youku, China’s No. 1 video site, signs deal with Warner Bros.

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Youku Inc., China’s top online video site, said Tuesday it had signed a deal with Warner Bros. to stream hundreds of the studio’s new and old movies.

The deal follows another first ever venture for a major studio when Warner Bros. said two weeks ago it would offer its content to Chinese cable television users.


Youku will receive up 450 new and old Warner Bros. titles including the “Harry Potter’ and “Lord of the Rings” series with Chinese subtitles costing between 77 cents and 46 cents depending on how recent the film is.

The company will be competing against free illegal downloads, but has made its content cheaper than pirated DVDs, which ordinarily cost around $1.50 in China.

“Over the past year, we’ve seen Chinese Internet users become more sophisticated in terms of what they’ll spend money on,” said Dele Liu, Youku’s CFO. “People are increasingly willing to pay for high quality content.”

Youku said the newest Warner Bros. titles will be available about 100 days after their theatrical release in China. Movies that aren’t shown in theaters will be made accessible the same time their DVDs become available in China. Titles that fail to receive approval from Chinese censors will not be available through the service.

Warner Bros. has been among the forefront of Hollywood’s efforts to gain access to China’s booming movie-going market. China currently limits the number of foreign movies for theatrical release to 20 per year.

Youku, which recorded the highest one-day jump in five years after its initial public offering on the New York Stock Exchange in December, has yet to turn a profit and has seen its stock drop 60% since its peak.


Still, the site is the market leader in Chinese streaming video, commanding 22% market share last year, according to the research firm Analysys International.


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--David Pierson