US studio strikes Chinese pay-per-view deal

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US film giant Warner Bros announced Thursday it struck a groundbreaking deal to offer its films on pay-per-view television in China via cable and online.

The distribution agreement will make Warner the first US studio to offer films on demand via television nationwide in China, a huge expanding target market for the struggling US movie industry.

Through the YOU On Demand service, eventually up to 200 million households will be able to access Warner Bros.' new release and catalog films from this summer, the entertainment giant said in a statement.

"China is developing methods for consumers to view movies outside the cinema in a legitimate fashion," said Jim Wuthrich, head of International Home Video and Digital Distribution for Warner Bros.

"Through YOU On Demand's platform, millions of potential consumers will be able to view our films," including for example the latest Harry Potter blockbuster, "Harry Potter and the Deathly Hallows - Part 1," he added.

YOU On Demand will operate under an exclusive 20-year agreement with CCTV-6's pay TV arm China Home Cinema (CHC), in a deal involving Warner Bros Home Entertainment Group's joint venture in China, and YOU On Demand Holdings.

Like other US studios, Warner Bros is grappling with the transformation of its traditional theater-based distribution model in the exploding Internet and cable era, compounded by cheap pirated DVDs.

In addition in China, Hollywood is constrained by rules which limit the number of foreign films released in theaters in China to 20 per year, according to the LA Times, which said there are no quotas on films released via television.

Shane McMahon, YOU On Demand's Chairman and CEO, said: "Our distribution agreement with Warner Bros. marks a historic milestone for our company.

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"I'm excited for the millions of Chinese consumers that will be able to experience and enjoy the very best content that Hollywood has to offer through the YOU On Demand platform."