China
Duncan Clark: Beijing forces creation of WeTube
Beijing’s control and censorship instincts risk making China’s video sharing platforms into a WeTube model of highly controlled video on demand instead of YouTube model of User Generated Content, Duncan Clark of BDA writes in the Wall Street Journal.
Beyond the key issue of censorship and government control of information, there’s more than a few western venture capitalists who risk losing money. Roughly $300 million in foreign venture capital has been committed to eight online video sites in China since 2006, according to Clark.
Beyond the regulatory challenges, most Chinese online video sites — in line with their counterparts overseas — have yet to generate sufficient advertising or subscription revenues to offset their expenditures on hosting and bandwidth. Increasingly, they must spend on content censorship, too. Control over the issuance of licenses will likely now determine which of these sites gain access to capital and emerge as the winners in this powerful medium.
If the Chinese authorities set the censorship bar too high they are likely to transform approved video-sharing sites into a more stale form of video-on-demand, further impinging the ability of these sites and their backers to innovate their way into profits. This may prove ultimately more appealing to a government whose instincts still tend more toward “WeTube” than YouTube.
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Thomas Crampton was a correspondent for the International Herald Tribune and The New York Times for more than a decade, reporting from five continents, writing a column on Asia and covering Asian politics, economics and culture. Currently based in Hong Kong, he writes here about China, the Internet and New Media seen from Asia, while also advising companies on digital communication strategies. For more information click here...
[...] Via Thomas Crampton, Duncan Clark, of telecoms consultancy BDA, has written an opinion piece for the Wall Street Journal Asia on the recent regulatory woes of China’s video sharing sites:[In] a sign of the ebb and flow of Chinese Internet regulation, regulators evidently concluded they also had to include some successful video sites on the “approved” list. The inclusion of even a small number of venture-capital-backed video sites and established Internet portals is perhaps a nod to the innovation and entrepreneurial achievements of these companies — and perhaps also a nod to the fact that their popularity would make it hard to shut down all of them. On July 9, Youku.com became the first top-tier site to receive a license from SARFT. A further batch of licenses is expected to be granted to other popular online video sites before long. The July 11 unblocking of 56.com marked another relaxation, although being offline for five weeks has certainly hurt the company. Foreign investors are finding there are no guarantees in China, and politics can cut into the bottom line. As Youku’s CEO Victor Koo commented recently, “Getting a license is still only a first step. An online video license is like a driver’s license: Even after you have one, you still have to drive by the rules of the road.” There is now no doubting that SARFT controls the traffic lights and the toll-gates on this road.Nothing revelatory, but an interesting recap of recent events. Duncan also raises the unappetizing prospect of what the shape of the Chinese government’s ideal video sharing sites might be. Suffice to say, not so much fun as you might want. Filed under: China, Technology [...]