Disney strikes deal to distribute movies to Chinese cable viewers

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The Walt Disney Co. has reached an agreement that would bring Pixar Animation Studios’ ‘Cars 2,’ Disney’s ‘The Muppets’ and other approved films to Chinese cable television viewers, broadening the Burbank entertainment giant’s access in the world’s most populous market.

An executive from You On Demand said Wednesday that it had struck a licensing deal with Disney to rent current films, as well as classic movies such as ‘The Lion King’ or ‘Mary Poppins,’ through its recently launched on-demand service in China. These titles also would be part of a planned Netflix-like movie subscription offering that’s expected to begin in June.

‘Disney films define quality family entertainment and we’re thrilled that You On Demand will be their showcase to the world’s largest television audience,’ said You On Demand Chairman and Chief Executive Shane McMahon.

You On Demand operates under an exclusive joint venture with China Home Cinema, the HBO-like arm of China’s broadcast movie channel, CCTV-6. You On Demand provides the video-on-demand service that is available to about 3 million viewers through cable operators in the Shandong, Jilin and Zhejiang provinces.

Over time, McMahon hopes to expand the service’s movie offerings and the availability in a cable TV market that already dwarfs that of the U.S., with some 187 million cable households. Warner Bros., with its library of hundreds of titles approved by the Chinese government’s censors, was the first to offer its films through You on Demand. Earlier this month, Lionsgate struck a licensing deal to make available such titles as the Oscar-nominated ‘Hotel Rwanda,’ the popular ‘Saw’ franchise and older movies like ‘Dirty Dancing.’

You On Demand charges viewers $1 to $3 to rent a movie through their cable provider — a nominal fee that McMahon hopes will be attractive enough to allow You On Demand to compete with inexpensive pirated DVDs that are widely available in China. He said studio executives hope that services like You On Demand will convince Chinese viewers to pay for a convenient, high-quality movie experience.

One investor, Neil Danics of SPAC Investments, points to an announcement Wednesday from Youku Inc., an Internet-based on-demand service that licenses movies from Warner Bros., Paramount and 20th Century Fox. Since launching a year ago, Youku said it has processed more than 1 million pay-per-view and subscription orders.

‘That tells us the Chinese people do pay for content,’ said Danics.

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— Dawn C. Chmielewski