Chinese video streaming site Youku signed a deal for more than 80 hours of British content on Tuesday, seeking to become the “number one platform for British drama” amid strong demand for foreign content.

The deal with BBC Studios extends Youku’s licensing of all four seasons of Sherlock and the full catalog of Doctor Who, including the latest season which is currently airing. It also includes new content for its library that will be available on the platform this month, including Good Omens, Sanditon and Luther, as well as high-definition versions of classic 80s comedies Yes Minister and Yes, Prime Minister.

A high-definition version of classic 80s political comedy Yes Minister was among the content Youku obtained the right to screen in a deal with BBC Studios. (Picture: Handout)

The content will mostly be exclusive to paid subscribers, Youku said in a written response to the Post.

Foreign content on streaming platforms is capped at 30% by law, but this has not stopped sites from snapping up TV shows produced overseas which have proved popular among local audiences. On Douban, the largest crowdsourced film review platform in China, eight out of the 10 highest rated TV series streaming online are foreign shows from the UK, US and South Korea.

The third season of Yes Minister – known to be former UK prime minister Margaret Thatcher’s favorite show when she was in power – is currently the highest rated British TV series on Douban, with nearly 12,000 Chinese viewers rating it an average of 9.8 out of 10. Among US TV shows, the 10th season of sitcom Friends was rated the highest, also achieving an average rating of 9.8 by almost 79,000 users.

Youku has been snapping up British dramas since 2013, when it brought in Sherlock and Downton Abbey, differentiating itself from major rivals iQiyi and Tencent Video. iQiyi is popular for its Korean dramas, self-produced series and reality shows, while Tencent Video is an HBO partner and the local go-to platform for American shows such as Game of Thrones and The Wire.

While many local shows are free on these sites, most of those produced overseas are only available to paid users: a strategy that companies take to diversify their revenue channels and deter piracy.

The sites enjoy a large domestic user base in China, where Western streaming platforms such as Netflix, HBO Go and Amazon Prime are largely locked out. iQiyi subscribers grew 31% to nearly 106 million in September, according to its parent company Baidu, while Tencent Video reported that it had 100 million members in September, up by 22% from a year earlier. Youku's parent Alibaba – which also owns the South China Morning Post – has not revealed its user numbers, but said that its average daily subscribers increased 47% in the third quarter.

“The [coronavirus] epidemic will create opportunities for video platforms because users will have more free time at home,” independent analyst Zhang Hefei, who runs a blog on the internet and technology, said. The outbreak, which has killed more than 1,300 and sickened more than 59,800 in China as of Thursday afternoon, has led to tens of millions of people locked down at home in an effort to contain the spread of the disease.

Zhang also pointed out that China’s show business has been disrupted by the epidemic, which may mean less competition for foreign shows in the near future.

Hengdian World Studios – which has been dubbed “China's Hollywood” due to the record-breaking number of films and TV shows shot there – has halted productions since late January, with projects that have special approvals from the local government in Zhejiang gradually resuming from Thursday, Sohu reported, citing an official notice.

But the video streaming industry has been undercut by online piracy groups that produce subtitles for shows in both Chinese and English, then circulate them online for free.

One viewer, 27-year-old Beijing resident Wang Dage, said she often watches free pirated versions of the British and American dramas she enjoys, but would be willing to subscribe to paid video sites if they offer bilingual, better curated subtitles.

“I was a paid user on several sites, including iQiyi, Tencent [Video] and Youku, just to skip ads and watch a show that was on air during that period, but I would unsubscribe later,” she said.

Video streaming sites also face regulatory uncertainty in China, particularly in relation to their foreign content offerings. Beijing’s censors mandated in 2014 that all foreign-produced TV shows must pass a review before being streamed online, while a 2018 regulation by the National Radio and Television Administration stated that foreign programs can only make up a maximum of 30% of all content available on each video streaming platform. The Big Bang Theory , The Good Wife and Peppa Pig are among the numerous foreign shows that have been targeted by censors and removed from platforms in recent years.

(Abacus is a unit of the South China Morning Post.)