BEIJING: Alibaba, the Chinese internet giant, has upped the stakes in the country's online entertainment battle with its imminent launch of an OTT subscription service.

Tmall Box Office, or TBO, is expected to roll out in two months' time. "We aim to become [the equivalent of] HBO and Netflix in the US," said Liu Chunning, president of Alibaba's Digital Entertainment arm.

The potential is immense, as a new report from Digital TV Research suggests that China's OTT TV and video revenues will rocket from just $40m in 2010 to $2,815m in 2020, making it the fourth largest market in the world.

Simon Murray, principal analyst at Digital TV Research, pointed to Netflix as a catalyst for global OTT growth. "Not only has the launch of Netflix boosted each market, but the anticipation of its launch has galvanized local players into action – creating a whirlwind of promotional activity," he said.

Netflix does not currently have a licence to operate in China, so there is no threat to Alibaba from that direction. But last year rival Tencent signed a deal to distribute HBO shows and films and earlier this year concluded a tie-up with the National Basketball Association of America as China's leading tech and internet firms set about building their content offer for Chinese consumers.

But, with Chinese consumers more accustomed to viewing pirated or ad-funded content, some observers wondered if Alibaba's move could be successful.

"There is no established habit for Chinese viewers to pay for content so they will have to provide exclusive or homegrown shows to get people to pay," Lu Jingyu, an analyst at the iResearch consultancy in Beijing, told the Financial Times.

The first original show on offer will be a criminal drama that will be free to watch, but 90% of the content will be behind a paywall.

One online video executive described this as a "bold move", adding: "If Alibaba can do this, it will be big for the industry."

Data sourced from Financial Times, Wall Street Journal, Digital TV Research; additional content by Warc staff