Alibaba will offer the service through a set-top box and smart TVs that carry its operating system.
The service will mostly offer foreign and local films as well as TV content. Alibaba will also stream its own original content, The Journal said.
One of the service's first original shows will be a crime drama similar to those watched in the U.S. While 90% of the service will be paid, viewers will be able to access the crime drama for free.
Shares of Alibaba are down by 0.45% to $86.21 in pre-market trading on Monday morning.