Disney Teams With Alibaba to Stream Films to Chinese Viewers

Alibaba Group Holding Ltd., the e-commerce giant headed by billionaire Jack Ma, and Walt Disney Co. announced a multiyear licensing agreement for a device that will deliver Disney and Pixar movies, games and travel services in China.

Called DisneyLife, the Mickey Mouse-themed system is available through Alibaba's online shopping site Tmall.com for $125 (roughly Rs. 8,358), according to a statement Tuesday. The web-streaming service allows Alibaba's customers in China to access Disney content as well as plan visits to Hong Kong Disneyland and Shanghai Disney Resort, the companies said. Terms of the deal weren't disclosed.

DisneyLife "will provide the only holistic and trusted family-friendly digital destination in China," said Wei Ming, co-president of Youku Tudou Business Group and general manager of Alibaba's digital-entertainment unit.

Teaming up with Disney is Alibaba's latest effort to bolster its growing media empire. This month, the company agreed to buy Hong Kong's South China Morning Post and other affiliated media assets for $266 million (roughly Rs. 1,779 crores). In November, Alibaba agreed to acquire video service Youku Tudou Inc. to stream more content to Chinese Internet users through control of the YouTube-like site. The company also invested in Paramount Pictures' latest "Mission Impossible" movie through its Alibaba Pictures Group unit.

All content offered from DisneyLife is through Wasu Media Network Co., one of the first companies in China to receive an Internet-TV license from the government. Wasu operates cable-TV and broadband networks in Hangzhou, where Alibaba is based. Wasu said in April last year that it would sell a 20 percent stake to Ma, Ailbaba's chairman, and fellow billionaire Shi Yuzhu.

Local partnerships in China allow US media companies to take advantage of the growth in online TV in the nation of 1.4 billion people. Bloomberg News had reported in May that Netflix was in talks with Wasu to enter the nation's video market.

"Having a local market partner in China is essential to have a shot at success," said Michael Morris, a Guggenheim Securities analyst. But there's also a tradeoff, he said. "You give up some economics by forming a partnership that you otherwise might not have to give up."

Disney shares rose as much as 3.6 percent to $113.25 (roughly Rs. 7,570) in New York, the biggest intraday gain since August 26. Alibaba climbed as much as 3.5 percent to $83.35 (roughly Rs. 5,573). Its shares were down 22 percent this year through Monday.

© 2015 Bloomberg L.P.