China's Youku Secures Deal With Disney to Stream TV Shows

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Youku, China's largest video hosting site, has partnered with Disney to begin streaming the studio's TV shows, said the company's CEO Victor Koo.

Koo made the statements on Monday during a speech at China 2.0, a conference hosted in Beijing by Stanford University. Youku has also launched a beta version of a subscription service that will allow users to view certain content such as select movies and education videos.

Youku has yet to release any official information on its partnership with Disney or its subscription platform. A visit to the site shows that Youku has already uploaded five season's of the hit TV series Desperate Housewives. The videos are subtitled in Chinese.

The agreement with Disney comes as Chinese video hosting sites are moving away from showing illegally uploaded content. Chinese users continue to upload pirated popular American TV shows and movies to sites like Youku, even as the companies have been vigilant in deleting such content.

But for the first time, legal videos from major Hollywood studios are starting to hit video sites in China.

Last month, one of Youku's competitors, Ku6 Media, signed a content deal with Sony Pictures Television and Warner Bros. to provide the broadcasting rights for several hundred films and TV episodes. Ku6 Media has said the first videos from the deal are going online this month.

Such media partnerships are more prevalent among China's video sharing sites.

For Youku, 70 percent of the company's videos come from licensed content made through deals with studios domestic and abroad. A remaining 20 percent of the site's videos is from user generated content, while 10 percent is original content created by Youku.

Focusing on creating these media partnerships has to led to success for Youku, and set it apart from sites like YouTube, which relies heavily on user generated content. Currently, 230 million Chinese users visit Youku on a monthly basis, Koo said. But like many video hosting sites, Youku has yet to become profitable.

During his speech Koo noted that Chinese companies have stopped with simply copying foreign ideas to work in China, and instead are tapping into certain advantages unique to the Chinese market.

In the case of Youku, the site is able to host a new film 30 day after it appeared in movie theaters. In contrast, an American company like Netflix has to wait 6 months, Koo said. Through its partnerships, Youku is also able to place all the episodes of an entire TV series online, rather then only upload a few episodes at a time.

"It really creates a unique market opportunity for Internet television in China," Koo said.

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