Alibaba's new service will go up against the likes of Tencent Holdings, Baidu's iQiyi, Sohu.com and Leshi Internet Information & Technology (LeTV).
"Our mission, the mission of all of Alibaba, is to redefine home entertainment," said Liu. "Our goal is to become like HBO in the United States, to become like Netflix in the United States."
It was not immediately clear how the service would fit with Youku Tudou, one of China's biggest video streaming platforms in which Alibaba bought a 16.5 percent stake last year.
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However, unlike the majority of domestic rivals, about 90 percent of TBO's content will be paid for, either by monthly subscription or on a show-by-show basis, Liu said. The remaining 10 percent would be free.
Netflix itself is also considering an entry into China, a notoriously difficult task for foreign Internet companies.