*Youku and Warner Bros in three year deal
*Youku will add 400-500 Warner Bros movies
*Youku shares up 15 pct on NYSE, among top gainers (Adds share prices)
SHANGHAI, June 28 (Reuters) - China’s Youku Inc YOKU.N has agreed with Warner Bros Entertainment’s local joint venture to offer pay per view movies on its newly launched online paid content platform, Youku said on Tuesday.
Under a three-year agreement with Warner Bros, Youku will add 400 to 450 Warner Bros movies to its Youku Premium library.
“People are increasingly willing to pay for high-quality content, and we take the growth of Youku Premium as a sign that the market is improving for paid services,” Dele Liu, Youku’s chief financial officer, said in a statement.
Shares of Youku rose 15 percent, putting it among the top gainers Tuesday on the New York Stock Exchange.
Youku Premium, officially launched on Tuesday, began beta testing in October 2010. Since then, the service has processed 200,000 paid transactions for its library of more than 300 movies and 3,880 educational programs.
Earlier this month, Warner Bros said it would distribute on-demand movies in China starting this summer through an agreement with China’s YOU On Demand Holdings Inc CBBD.OB. [ID:nL3E7HF1HN]
Foreign movies are available in cinemas through a quota system that limits the number of foreign movies screened in China each year. Otherwise, foreign movies are widely accessible to the public on pirated DVDs that can be bought on the black market for less than a dollar.
The problem of rampant piracy has robbed Hollywood studios and music production companies of millions in profits in the world’s most populous country.
Youku shares rose $4.27 to $31.61 on the NYSE, while Time Warner Inc TWX.N, parent of Warner Bros, rose 36 cents to $35.28. (Reporting by Melanie Lee; Editing by Kazunori Takada)