Alibaba To Launch Netflix Competitor?

Within two months, Alibaba Group Holding Ltd BABA will launch a streaming video service that is expected to put it into competition with Netflix, Inc. NFLX. According to a Reuters report, Alibaba's head of digital entertainment announced the move over the weekend.

The product, the Tmall Box Office, would differ from other Chinese entertainment companies because 90 percent of its content would be paid for, either through one-off payments or a monthly subscription.

Alibaba would offer the service through the company's set-top box and smart televisions. Some of Alibaba's content would be produced by the company and other content would be bought overseas. "We want to create a whole new family entertainment experience," Liu said. "Our goal is to become like Netflix in the U.S., HBO in the U.S."

Late last month, reports surfaced that Netflix was talking with Chinese companies with regard to finding a partner in order to help it break into China's $5.9 billion video market. One of those discussions was said to be held with Jack Ma-backed Wasu Media Holding Co.

It is unclear how Alibaba's move would, if at all, impact Netflix's reported discussions with Wasu Media.

Those rumors helped the stock, which last closed at $660.93, to gain above $600 per share. At that time, Netflix's Chief Content Officer Ted Sarandos said that "there are a lot of operating constraints in China that are different to anywhere else."