Alibaba’s Tmall division, Hunan TV and DMG Entertainment are jointly developing a home entertainment platform, which will first be offered to the 70 million residents of Hunan province.
The new service will bundle content from both internet and traditional TV platforms, along with broadband and phone services. DMG, a Beijing-based film and TV producer and distributor, will drive the content side of the service. Tmall and Hunan TV, which recently announced a film financing deal with Lionsgate, will also supply content.
Tmall will also bring its extensive e-commerce networks to the partnership, while Hunan TV will leverage its provincial broadcasting network with an audience of 70 million.
Revenue is expected to come from subscriptions to film and TV content, gaming, apps, education and e-commerce.
“Unlike other services out there, this home entertainment platform will change the landscape of the entire industry in China. For the first time, consumers will have an amazing level of choice and options for services – from entertainment to education and everything in between,” said Dan Mintz, CEO of DMG.
Following the pilot phase in Hunan province, the service will gradually expand to the whole country. Nationally, Hunan TV content appears on city cable network services in Tianjin, Guangzhou, Dalian, Baoding, along with Xinjiang and Qinghai Province, covering more than 20 million customers.
DMG explained in a statement that the shift away from living room to mobile viewing is only just starting to happen in China, which means that services offering both OTT and traditional broadcast viewing have the most impact.
Market analysis suggests that with 1.3 billion people and 400 million households, the Chinese home entertainment market has the potential to hit $640 billion over the next several years.
“DMG recognised the business opportunity brought on by the popularisation of OTT and DVB (over-the-top and digital video broadcasting) services in mature global markets and realised the existing gap in offerings in China,” the company said.
The new platform combines OTT and DVB through Alibaba’s YunOS and offers three modules: live+timeshift, categorised entrances and recommendations. Customers will be able to watch a wide range of live TV channels, while also streaming films and accessing games, education offerings and Tmall shopping services.
DMG co-produced movies such as Iron Man 3, Looper and Transcendence and is also producing original content under its Mini Marilyn and Valiant franchises, including animated and live-action films, TV shows and games.