Last month's Beijing premiere of Captain America: The Winter Soldier had all the hallmarks of a blockbuster. Young girls screamed along the red carpet. A 100-foot-wide screen broadcast the film's dramatic trailer, complete with Chinese subtitles. The stars of the sequel, Chris Evans as Captain America and Scarlett Johansson as Black Widow, tried to hide signs of jetlag as they answered press questions about visiting the Forbidden City and their dinner plans with Jackie Chan later that night.

    Disney (DIS) is the U.S. company that was behind the release of the superhero flick -- but it was the Chinese video site Youku Tudou that staged the Beijing premiere. Youku, once known as the YouTube of China, spent weeks building hype for the Captain America sequel (the Chinese translation is "American team leader") with a blitz of behind-the-scenes interviews and promotional ties-in. Its site will stream the film later this year.

    Just a few years ago, a partnership between a Hollywood studio and Chinese video site would have been unimaginable. Many of the Chinese sites, Youku in particular, hosted so many pirated versions of U.S. television shows and films that Hollywood regularly sent armies of lawyers to China to complain.

    What has happened since is a transformation so rapid that it could only happen in China. Youku, Sohu, Tencent's v.qq, and many other video sites are now bonafide partners with Hollywood. They send tens of millions of dollars a year to studios through content licensing deals, helping to build fan bases in China for television shows as unlikely as CBS's 2 Broke Girls and Netflix's House of Cards. Streaming top U.S. movies, still in the early stages, is the next major opportunity.

    "Growth in China is pretty explosive," says Doug Belgrad, head of Columbia Pictures, whose parent Sony Pictures Entertainment (SNE) has signed streaming deals with almost 10 Chinese video sites over the past three years. "We're being fairly aggressive in licensing our library," Belgrad says.

    Early challenges

    To foster improved relationships with Hollywood, the Chinese sites first had to overcome privacy. They did so by fighting each other. Sohu, which started as a search engine, was part of a group that sued Youku in 2009 to protect the licensed Chinese content it was buying. The money at stake is massive -- this year, ads that run with online video in China are expected to pull in $3 billion in sales.

    Sohu ultimately prevailed in that case, and Youku, the country's biggest video site, went on to focus on building a library of legal content. All of the sites spent heavily on new shows between 2010 and 2012 as the fear of losing potential viewers to piracy evaporated. In the last year, Youku has bought rights for 30 Western shows like ABC's Modern Family and BBC's Sherlock. Tencent's v.qq recently added the films Hunger Games: Catching Fire and Saving Mr. Banks and in March said it would double spending on video content to boost market share. Sohu made headlines in the U.S. and China after acquiring rights to the television series Saturday Night Live, Breaking Bad, and House of Cards.

    But hurdles remain, namely in the form of Chinese censors. The rush for Western shows has attracted attention from China's regulators, who until recently gave the sites leeway to broadcast almost anything. In late April, the Chinese state-owned press reported that four U.S. shows would be blocked from the streaming sites, including The Big Bang Theory, The Practice, NCIS, andThe Good Wife. The move was probably the government's first major salvo in the war to control online video, which it has been attempting to do since 2009, according to one industry insider.

    But censorship is unlikely to go very far, in part because Western content is hugely popular among Chinese viewers. Younger viewers are known to obsess over the movies and shows, and for good reason: Not only is the production quality better than what's offered in Chinese, but Western movies and TV can become a status symbol, says Melanie Huang of CSM Media Research in Beijing. Telling your Chinese friends you watch House of Cards not only means you are proficient in English, but also that you have interest in the outside world.