Alternative movie streaming service Mubi is starting the year with some big news. While Mubi has always been a nearly-global service, the company is launching its service in China in the coming months. The startup also announced that Huanxi Media, Mubi’s partner in China, will invest $50 million in total for both the Mubi China subsidiary and the global Mubi service.
As a reminder, Mubi isn’t really competing with heavyweight streaming giants like Netflix and Amazon Video. Instead, the company has been focusing on quality movies with an ever-changing selection of titles. Every day, Mubi sends you an email with the movie of the day with a quick description. This movie will be available to stream for the next 30 days. After that, it will become unavailable.
In other words, Mubi features a rolling selection of 30 movies. Every day, a movie is added and another is removed. Most of the movies are auteur movies or international movies. It’s refreshing compared to the blockbuster movies you can see on the homepage of Netflix or the iTunes Store. Depending on your country, you get a different selection of movies.
But it looks like the startup wants to go a step further in China. This year, the company is launching Mubi China, a joint venture between Mubi and Huanxi Media, a public movie production company. Huanxi Media is putting $40 million on the table to get 70 percent of the joint venture. Mubi is keeping 30 percent of the joint venture. Mubi says that Mubi China will use the same model with a library of only 30 movies.
But that’s not all, Huanxi Media also wants a stake in Mubi and not just the newly formed joint venture. Huanxi Media is investing $10 million at a $125 million post-money valuation. Not a bad deal given that Mubi has only raised around $25 million so far over the past eight years.
So it looks like Mubi is letting another company control the Chinese market in order to get a big check. This is a smart move given that Mubi is available in 200 countries and China is just one market among many others. And yet, if Huanxi Media can crack the code of the Chinese market, where most people watch pirated movies on Youku, Mubi will still have a 30 percent stake in the joint venture.
Huanxi Media isn’t a small player in the Chinese movie industry. Founded by Dong Ping, the company has produced popular Chinese language films. Most of these movies only get limited releases in the U.S., but some of them are very successful. For instance, Lost in Hong Kong amassed $255 million a few months ago, setting new box office records in China. Not bad at all.