Digital Domain Holdings, parent company of the world’s largest independent visual-effects house, plans to form more mainland Chinese partnerships as it seeks to expand its virtual reality (VR) content in search of fresh income growth in China. “In the past, we are a service provider who makes visual effects for movies and ads. But our business model in China is different as we want to partner with more local companies to diversify our income,” Digital Domain chief executive Daniel Seah Ang said in Beijing on Wednesday. Marking the Hong Kong-listed company’s first big move in the mainland Chinese market, Digital Domain signed a three-year collaboration agreement with Youku Tudou, China’s leading online video provider backed by e-commerce giant Alibaba Group. New York-traded Alibaba is the owner of the South China Morning Post . Digital Domain will create VR content to be distributed through Youku Tudou’s platforms targeting the greater China market, Seah said. “However, our original VR content is not limited to Youku Tudou’s platforms. We want to avoid an exclusive cooperation so that we can diversify income sources,” he said. Digital Domain has also signed collaboration agreement on VR content with two more online video companies including LeEco, Seah said. China’s online video companies like Youku Tudou have a mature business model which would enable income to be generated from content and also membership fees, he said. Digital Domain is also upbeat on China’s booming TV and movie industry as it announced partnerships with production companies Shanghai Film, Zhejiang Talent Television and Film and Cenic Media Shanghai to produce VR and other content making use of its technology in special visual effects. In China, we will be more focused on content development and ownership of intellectual property Daniel Seah, Digital Domain CEO China’s film market has seen substantial growth and moviegoers have high expectation on visual effects and quality of Chinese movies, Seah said. Digital Domain is in talks to form more partnerships with large China film studios to collaborate on content, but Seah declined to provide more details. In the North American market Digital Domain has been working with large movie studios on special visual effects for films. This work will continue to provide stable income, while the Chinese market will drive revenue growth, Seah said. “In China, we will be more focused on content development and ownership of intellectual property. We will make more investment in China than in the North American market,” he said. Last year, Digital Domain reported a HK$156 million loss from a profit of HK$43 million the year before. Seah attributed the loss to expenses involved in acquisitions, including its purchase of Canadian VR tech company Immersive Media. Such investment is part of the company’s strategic plan which will benefit its efforts to expand in China, he said. “We are moving onto the harvest stage. I am confident with the Chinese market,” Seah said. The application of VR technology in virtual human form, or holograms, is also one of the focus areas of Digital Domain in China, he said. After the success of the virtual concert in 2013 when a digital version of the late Taiwanese singer Teresa Teng performed duets with Jay Chou at a Taipei concert, another “virtual live” concert featuring a virtual Teng will be held in Shanghai this Saturday.