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China

Duncan Clark: Beijing forces creation of WeTube

By thomascrampton ⋅ July 22, 2008 ⋅ Post a comment

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...