Chinese giant Alibaba, DMG Entertainment China, and China's Hunan Satellite Television are making a deal to be able to expand cable, mobile and subscription-based Internet in China's entertainment industry.

Bloomberg reported earlier that Alibaba plans to launch a Chinese version of HBO and Netflix. The company said that this service is called TMall Box Office, which will of service to around 600 million families who wishes for more entertainment options.

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Wall Street Journal confirms this plan stating that the three companies will offer gaming, TV and film options to the six million Hunan TV subscribers. This marks the first bundled cable TV, entertainment and mobile plan in China. According to the report, this service will be offered through Alibaba's TMall e-commerce. Spokespersons of the companies refused to make further details about the agreement.

This move is considered part of Alibaba's plans to expand utilize the entertainment industry in China, which is the second biggest movie market by revenue.

"We want to create a whole new family entertainment experience. Our goal is to become like Netflix in the U.S., HBO in the U.S," said Alibaba's digital entertainment business president Liu Chunning.

A report from Deadline stated that the video-on-demand in China is astonishing. The overall market in China is four times bigger than of the United States which then makes its entertainment industry a huge resource to tap.

As of the moment, Alibaba already dipped in the lucrative entertainment market via its movie-ticketing website and their film studio, Alibaba Pictures. They also own 18.5% of stakes in one of China's biggest video streaming companies, Youku Tudou. Alibaba's CEO Jack Ma and his investment firm also own a minority stake in Huayi Brothers Media Corporation film studio.

This deal also serves a big leap for DMG Entertainment which is a Beijing-based film company that has been trying to enter the global entertainment arena and one day hopes to rival with international movie companies like Sony Pictures Entertainment. The company co-produced with Disney back in 2013 with "Iron Man 3."

"Alibaba is a tremendously successful and dominant partner to have in China. They touch millions of consumers now," said Lion's Gate president of worldwide television and digital distribution, Jim Packer.

TagsDMG Entertainment China, China Hunan Satellite Television, HBO, netflix