By+Tang+Yuankai

For Hou Yimeng， a fashion designer， online streaming videos are an increasingly important news source. When watching videos online recently， she learned that Danish high-end fur design company Birger Christensen had officially launched its brand in China. Hou immediately forwarded the video to colleagues and friends.

“In the past， I watched TV a lot. If I missed a program when it was aired， I would have missed my chance to find out what happened，” Hou said. “Online videos can be watched at any time any place， and you can watch them over and over.”

More importantly， compared to the text and pictures that used to dominate the Internet， videos carry much more information.

“People say that a picture is worth a thousand words， but a video clip can say far more than that，” Hou commented.

The video about Birger Christensen was shot and broadcast by an Internet service company. Hou said that although it was not edited as professionally as those aired by television stations， the video delivered more information about the brand than a regular TV program because there is no strict time limit for online videos.

Recently， Hou herself shot some videos and shared them online， a trend that more and more people in the country are following.

China now has 604 million Internet users， 67 percent of whom watch online videos， according to a white paper on Chinas online multimedia industry， which was released at the fifth China Online Audio and Video Industry Forum jointly hosted in December 2013 by the State Administration of Press， Publication， Radio， Film and Television （SARFT） and the Shanghai Municipal Government.

Now hundreds of millions people in China own smartphones， tablet computers and digital cameras and are able to produce videos and distribute them online with software， which has ushered in an era where anyone can be a broadcaster.

Bright prospect

The number of online video users is expected to approach 700 million in 2016 in China， said Peng Bo， Vice Minister of the State Internet Information Office， at the First China Internet Audio-Visual Conference held last November.

Chinas online audiovisual industry has a market value of 12 billion yuan （$1.98 billion）， while online videos have generated advertisements worth more than 9 billion yuan （$1.49 billion）， according to the white paper on Chinas online multimedia industry.

The white paper also showed that netizens spent more time on online videos than on any other Internet services， including social networking websites.endprint

“The online video industry has ushered in its spring time，” Peng said. Although no more than five years ago， he was worried about the very survival of the industry.

In the past few years， Chinas online video industry went through cut-throat competition and witnessed several significant mergers and acquisitions. In August 2012， the countrys top two online video companies—Youku Inc. and Tudou Holdings Ltd.—merged and created the largest online video firm in China. Ten months later， Baidu Inc.， the largest Internet search engine in China， acquired the streaming video service provider PPS Net TV for $370 million.

According to a report on the development of new media released by the Chinese Academy of Social Sciences in June 2013， of the more than 300 video websites that existed before， only around 20 have survived.

The video websites that have survived the fierce competition seem to be embracing a bright future.

“The introduction of much faster 4G wireless service promises great opportunities for online video companies. The new technologies will bring a boom to videos on mobile Internet，” said Guo Fanli， Research Director of CIConsulting， a professional industry research institution in China.

On December 4， 2013， the Ministry of Industry and Information Technology officially granted 4G licenses to three mobile service providers in the country： China Mobile， China Telecom and China Unicom.

Both China Mobile and China Telecom intend to spend 45 billion yuan （$7.41 billion） each in building their 4G networks， while China Unicom plans to spend 10 billion yuan （$1.65 billion）. It will take three to five years to put 4G infrastructure in place， and the total investment could range from 500 billion yuan （$82.6 billion） to as high as 1 trillion yuan （$165 billion）.

Between the three companies， China Mobile has taken the lead in the 4G field. The telecom giant has invested 41.7 billion yuan（$6.87 billion） in over 100 cities and plans to expand its 4G network coverage to more than 300 cities this year.

In the 3G era， although reading text messages and viewing pictures transmitted to cellphones are common experiences， watching videos is still a luxury for ordinary users because of relatively slow Internet speed and high cost of mobile Internet services.

Industry analysts predict that as the maximum Internet speeds of 4G networks are up to 10 times faster than those of 3G ones， highdefinition videos will become more popular with mobile Internet device users in the 4G era and that videos will eventually replace text and images to become the main form of content on social networking sites.endprint

In August 2013， the State Council， Chinas cabinet， released a circular on boosting information consumption and expanding domestic demand. The document said that Internet information consumption is expected to grow at an average annual speed of more than 30 percent and surpass 2.4 trillion yuan （$396 billion） by 2015. The circular also said that the government will promote the development of new Internet media.

Industry trend

As a new form of media， online videos have made a huge and far-reaching impact on Chinas media， entertainment and Internet industries as well as on peoples lifestyles.

Chinese audiences are spending more time watching videos online than on TV， according to a 2011 report released by Starcom MediaVest Group， one of the worlds largest brand communications companies.

As a result， producers of TV dramas and shows are seeking to maximize their income from online broadcasting of their programs.

The Voice of China， a prime-time talent show， quickly became a huge success after its premiere on Zhejiang Satellite TV on July 13， 2012， with many watching the show online.

The right to broadcast the first season of The Voice of China online was granted to any video websites that wanted it， and as a result， the show enjoyed a broad viewership， said Tian Ming， CEO of Star China Media， the shows producer. However， Tian said that the business model was unsuccessful and only brought in about 10 million yuan （$1.65 million） in revenue.

To rectify this， the company adopted a new business model for the second season of the show， which was to sell the exclusive broadcasting right to only one website.

Last year， Sohu.coms video site spent 100 million yuan （$16.5 million） buying the exclusive online broadcasting right of the second season of The Voice of China. Its reported that videos of the entire season were played more than 2 billion times on the website， making 200 million yuan （$33 million） for the company.

In November 2013， Tencent Inc.， currently Chinas largest Internet company by revenue， announced that with “generous spending，” it had won the exclusive right to broadcast the third season of The Voice of China.

The generous price paid was later revealed to be 250 million yuan （$41.3 million）.

In future， the show will not simply be put online， rather， netizens will be able to participate in the program interactively through the companys video site and their microblogs and mobile apps， said Jin Lei， the talent shows general director.

In addition to purchasing broadcasting rights for traditional TV programs， video websites have begun to produce their own.

At the Fifth China Online Audio and Video Industry Forum， it was disclosed that in 2012， video websites spent about 65 million yuan（$10.74 million） in total on producing original programs， which generated 50 million yuan（$8.26 million） in advertisement income for them. In 2014， the two figures are expected to top 100 million yuan （$16.52 million） and 180 million yuan （$29.74 million）， respectively.

This year， Sohu.com plans to double its investment in producing its own video programs， and aims to quadruple the volume of traffic generated by its productions.

The decision was made because production costs of original programs are low and such programs have higher input-to-output ratios， said Charles Zhang， Board Chairman of Sohu.com.endprint