Chinese VOD Rush Continues – Lionsgate Signs Latest Deal

Lionsgate (NYSE: LGF) became the latest Hollywood studio to make an online movie distribution deal in China, announcing Monday that it has reached a deal with local ad-supported video portal Youku to distribute nearly 200 of its movies.
Lionsgate did not reveal pricing terms on the distribution agreement, which includes such titles as 2001’s Oscar-winning Halle Berry film Monster’s Ball. Under the pact, Lionsgate has the option of distributing its movies through Youku premium, which offers subscription and pay-per-view viewing, as well as electronic sell-through options, and has delivered 1 million transactions since launching in October 2010.
Monetization of Hollywood content in the emerging Sino market remains only a fraction of what it is in Europe and North America, but Hollywood’s major studios are pleased to be laying groundwork for legal home entertainment distribution. The U.S. International Trade Commission reported that piracy and counterfeiting of U.S. products in China cost American businesses roughly $48 billion in 2009.
VOD dealmaking between Chinese internet companies and U.S. studios has accelerated since Warner Bros. (NYSE: TWX) signed a seminal distribution agreement with local pay-per-view and VOD company You On Demand in June.
Youku recently signed separate deals with Walt Disney (NYSE: DIS) Studios, Dreamworks Animation, Paramount (NYSE: VIA) Pictures, Warner Bros. and 20th Century Fox (NSDQ: NWS). And last month, amid the Chinese government signing a deal with the U.S. to open its markets to more American films, both Lionsgate and Disney announced separate deals with You On Demand.