Hollywood Hopes Online VOD Can Combat Piracy

Warner Bros. Will Introduce Legitimate and Cheap Access to New Films Like I Am Legend

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Officials in China prepare to destroy fake DVDs and CDs in the battle against piracy
Officials in China prepare to destroy fake DVDs and CDs in the battle against piracy Credit: Li Muyi
SHANGHAI (AdAgeChina.com) -- Warner Bros. plans to become the first Hollywood studio to make its new release movies available digitally in China, pioneering video-on-demand (VOD) distribution in what is already one of the world's largest broadband markets.

In the first transactional VOD deal of its kind in China, Warner Bros.' new release movies, including some that have never been released theatrically in China, will be available to Chinese consumers to rent from their PCs via Voole.com at a price of between 4 and 7 RMB ($0.59 to $1.03) per film. The first titles available for rent in China include I Am Legend, Fool's Gold and Speed Racer.

Expanding its digital distribution strategy and its partnership with Voole are "an important first step in helping us to reach the broadest audience for our movies," said Marc Gareton, Warner's exec VP, international for digital distribution in London.

China is also one of the world's largest markets for DVD piracy, however, which has made it difficult for Hollywood studios to turn a profit in the mainland. Foreign films and TV series can be easily purchased for about $1 per disc in shops and streetside stalls across the country.

Content can also be easily accessed online. There are an estimated 300 web sites offering video-watching or video-sharing services in China. However, only a tiny fraction of these sites offer feature length films, and even fewer actually own distribution rights to Hollywood movies.

By making legitimate titles available in China for about the same price as illegal copies -- rather than the usual sticker price it charges in western markets -- Warner believes it can turn China into a significant market for VOD sales by providing reliable, high quality, legitimate, DRM-protected digital movies on a timely basis.

For example, Warner titles will offer the consumer a choice of original English soundtrack with subtitles or high quality soundtracks dubbed in Chinese. Research has shown that this is a significant benefit versus pirated copies.

"The fast-growing Chinese market already has significant broadband usage, with a projected 230 million users by the end of 2008," said Tony Vaughan, Shanghai-based managing director of Warner Bros' home entertainment joint venture in China, CAV Warner.

"Over 80 percent of the total China internet population has viewed online video content in the last six months alone, and now we can offer them a wider selection of top quality entertainment the way they want to watch it," Mr. Vaughan said.

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