Chinese e-commerce giant Alibaba developed a smart TV operating system last year and started working with a number of partners to come up with smart TVs, set-top boxes and services to run inside them. Now, the company is stepping up efforts to boost digital content as it seeks to engage users and conquer the living room of the Chinese — via an affiliated $1 billion investment deal, as well as a strategic cooperation agreement.

Alibaba Chairman and founder Jack Ma and co-founder Simon Xie, along with Chinese billionaire Shi Yuzhu, are shelling out CNY6.54 billion ($1.05 billion) for a 20 percent stake in digital media firm Wasu Media via a deal led by their investment firm, Yunxi Investment, as Reuters reports.

At the same time, Alibaba has reached an agreement with Wasu Media’s parent company, Wasu Group, to work together to develop online digital content to be presented as Internet TV offerings. Alibaba tells TNW that it will draw on Wasu’s digital content library and user channels.

“Wasu Group provides digital TV and broadband service with a network of 20 million subscribers and its extensive user base will serve as one of Alibaba’s distribution channels for digital entertainment content,” the company says. Wasu has an Internet TV license from the Chinese government.

Alibaba worked with Wasu previously to release its first set-top box Wasu Rainbow, which connects TVs to the Internet while providing a host of Alibaba services. Subsequently, it launched three smart TVs in collaboration with manufacturing partner Skyworth, which all run on Alibaba’s smart TV OS and Skyworth’s Tianci System.

Headline image via Peter Parks/AFP/Getty Images