Ogilvy China Digital Watch: "Silicon Hutong: Digital Video and the Coming Showdown with Broadcast

Ogilvy China Digital Watch: "Silicon Hutong: Digital Video and the Coming Showdown with Broadcast

Posted on October 29, 2008 by Kaiser Kuo | No comments yet

Filed in: Video Advertising, Internet Video

Naturally it doth please me that David Wolf has declaimed his faith in Internet video sites in China, and that he chose for a section subtitle, “We have seen the future, and it is Youku.” David is blogging from CASBAA in Kowloon this week, and he’s making the kind of predictions that online ad folks, particularly those with ties to Internet video players like myself, hope will come to transpire:

Here is my scenario: either this year, next year, or in 2010 the results of the CCTV advertising auction are bad - so
bad that they cannot be hidden. We’re talking like a 10-15% decline, or maybe worse. Meantime, Youku, Tudou, et al
are starting to rake it in. They’ve concluded content licensing deals, they’ve fixed (or kind of fixed) the measurement
issues, and there are upwards of 300 million users online.

At that point, it is not going to take long for CCTV and its fellow broadcasters throughout China to add things up.
They will turn to the State Administration for Radio, Film and Television and to the Publicity (propaganda)
Committee of the Party, making the case that these private"

At that point, the government’s options become fairly clear: restrict the online video sites, let the broadcasters run
whatever content they want, or force some kind of accommodation between the two sides (i.e., compel each of the
sites to take on a state broadcaster as a part or majority shareholder.)

Let’s hope he’s right. By the way, SARFT has been shuttering more minor video players. Read Steve Schwankert’s piece on that here.

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Yan's Views:

This sounds like an awfully typical case of 3rd party placed monopoly over media. Naturally, this suggested outcome will at least serve to sustain and fuel the growth of online video sites in China.

Shall this be true, it will further exacerbate the oxymoron of China's internet media democracy -- whilst state interference in media extends its talons, the content available online continues to proliferate in a free, democratic manner.