Summary:

Don’t call it ‘China’s Netflix’, but, fresh from its cost-saving merger, Asian video leader Tudou Youku now has agreements with all Hollywood majors to show their movies to its two million paying online video customers.

Will Smith in Men In Black 3

China’s dominant and newly-merged online video service can now go ahead and offer a comprehensive range of the biggest blockbuster movies through its paid platform.

Youku Tudou has gained a distribution license from Sony Pictures Television (SPT) to offer 300 Sony Pictures titles through its Youku Premium service (announcement).

The SPT deal is the eighth and final deal with a Hollywood major studio and runs for five years, giving the service a long window in which to exploit Chinese demand for premium internet video.

Although Youku and Tudou, like YouTube in the west, launched with a focus on amateur uploads, they are also fast trying to secure A-list movie and TV content.

Youku launched its Premium service comprising TV and films in beta in 2010. The service offers both subscription and on-demand access.

VP Huilong Zhu (via release) today disclosed it has around two million paying users:

“Subscriber growth for Youku Premium has exceeded our expectations, and we see it as a sign that Chinese audiences are willing and eager to pay for quality content. By providing a wide range of payment and subscription options, Youku Tudou has made it as simple as possible for them to do so.”

Last month, in its annual report for the year to December 31, 2011, Youku said Youku Premium had “processed more than one million paid orders, which include both pay-per-view and subscription orders … though we currently derive minimal revenues from subscription-based and pay-per-view services”.

Those revenues are now likely to grow — but the attractive deals also further threaten Youku Tudou’s bottom line. The pair consolidated in a big merger deal this summer precisely to save on the costs of content acquisition and broadband infrastructure, the latter of which has become especially burdensome.

Youku Premium will count around 3,000 titles in total, including 450 from Hollywood, by year’s end.

Sony Pictures titles include older fare like Groundhog Day, Bram Stoker’s Dracula and Sense and Sensibility plus newer releases including Men in Black 3, The Amazing Spider-Man and 21 Jump Street.

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