Once people have enjoyed something for nothing, they are unlikely to want to pay for it. This is why the internet as a whole may never make a profit. Alibaba has accepted the challenge with its pay-for-movies service. But why should Alibaba’s Netflix lookalike Tmall Box Office be different from so many other dot.coms still struggling to break even, let alone make a profit.
The Competition Facing Tmall Box Office
Chinese consumers are moving away from watching movies on television to streaming films on the internet in exchange for seeing advertisements first. This is a lucrative pitch for advertisers given there are twice as many China internet users as the entire U.S. population and they are enjoying the experience.
To satisfy their movie appetites, the nation’s online giants are paying huge sums for popular titles. But they are losing hand-over-fist because there is insufficient advertising to cover their cost. Meanwhile Chinese families are keen to continue with this arrangement because they can turn the jingles softer and it will need a powerful magnet to change this.
The Broader Challenges Alibaba Faces
Whether Tmall Box Office will draw them away from the luxury of a free service is debatable. Chinese consumers are also unlikely to pay to watch advertising even if a movie follows it. Alibaba will have to get inventive by weaving commercial messages into film scripts or showing billboards in the background.
The one head start it does have is the world’s most populous nation is already shopping online on its portal. However is also has to face up to interference from The State Administration of Press, Publication, Radio, Film and Television censors. This has a habit of pulling titles like The Big Bang Theory and The Good Wife without giving reasons. Hence, Tmall Box Office has a steep hill to climb to profit.