Partnering with M1905, Jiaflix was able to screen Michael Bay's "Transformers 4" to more than 760 million smartphone consumers. (Photo : Reuters)
A multi-billion dollar so much bigger than its European counterpart, China's online video sector operates with a different business model. Although the market is saturated by Chinese companies, Jiaflix, a U.S. company, is getting ahead of the competition.
Jiaflix Enterprises uses a business model which is a hybrid of Netflix subscription model and transaction-based on-demand service. Compared to Youku Tudou, LeVision and iQiyi, China's firms generating income trough advertising, Jiaflix's business model makes it smaller albeit more specialized.
Marc Ganis, Jiaflix president, stated that Jiaflix's incomes are currently in the low tens of millions, but overall, the company is growing significantly.
Ganis said: "We have great relationships with the Hollywood studios and a joint venture relationship with M1905, the online arm of China Central Television's Movie Channel. M1905 has digital rights to more than 7,000 Chinese movies and strong relationships with Chinese producers. That makes us a one-stop location for Chinese and international movies."
Ganis stated that Jiaflix's services are cost-effective, requiring a monthly subscription fee of only RMB30 ($4.90) per month and only RMB20 ($3.25) a month at the beginning. Ganis explained that the low price is to encourage the Chinese audience to get into the habit of paying for movies online.
Jiaflix's partnership with M1905 gives the company an option to distribute films through IPTV, Wi-Fi and set-top-boxes. Utilizing M1905's partnership with smartphone company China Mobile, Jiaflix was able to offer screening of "Transformers 4" to more than 760 million Chinese mobile smartphone consumers.
Jiaflix is at the forefront of the war on anti-piracy. Ganis explained that "effective and efficient anti-piracy campaign is vital to educating Chinese viewers to pay for video content they have been able to download for free through piracy guised as 'P2P file-sharing.'"
Ganis concluded that Jiaflix is headed toward a long-term sustainable business.
