Alibaba Tries to Catch Up to Tencent and Baidu in Online Video

NEW YORK (TheStreet) -- Chinese e-commerce giant Alibaba (BABA) is ready to take on Chinese Internet conglomerate Tencent (TCEHY) and make a play for the online video market.

On Sunday, Alibaba announced that it will be releasing Tmall Box Office, an online streaming service akin to both Netflix (NFLX) and Time Warner's (TWX) HBO. The service will be available in about two months through Alibaba's set-top box and televisions that support its operating system. It will offer both original content created by Alibaba as well as content purchased from overseas.

Alibaba's entertainment affiliate Alibaba Pictures completed a $1.57 billion stake sale in Hong Kong in June to help finance potential content acquisitions.

Online video is a $5.9 billion market in China, according to Shanghai-based Internet consultant iResearch, and while Tencent is currently the leader in the market, Alibaba thinks it can take a chunk of that for itself.

"Digital video and high quality content is a key component of our long-term growth strategy," an Alibaba spokesperson said.

The announcement of the streaming service follows a number of moves from Alibaba in the entertainment space, mainly through its affiliate Alibaba Pictures, over which Alibaba gained control in 2014 after increasing its stake in the company to 70.8%. In April, Alibaba announced a proposal to inject some of its entertainment-related business into Alibaba Pictures to help solve some of its financial struggles, sending shares of Alibaba Pictures up 37%.

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