SHANGHAI (AdAgeChina.com) -- Two of China's leading media companies, traditional TV broadcaster CCTV and search engine giant Baidu, are ambitiously expanding in China's online video market, one of the most competitive areas in that country's internet industry.
China had 338 million internet users in June 2009, according to the China Internet Network Information Center (CNNIC), making it the world's largest internet market. The country has about 222 million online video viewers, a population expected to grow by 20% to 30% in the coming years.
Baidu sees demand for high-quality video
China already has several prominent online video-sharing sites like Youku.com and Tudou.com. Like Google's YouTube service, which is blocked in China, those sites launched primarily with user-generated clips.
The new players, however, are focused on licensed content and therefore will operate more like Hulu, a U.S.. site owned by NBC Universal, Fox Entertainment Group, ABC, and Providence Equity Partners that offers commercial-supported streaming video of TV shows and movies from major networks and studios.
"As China's internet industry evolves, we have seen increasing demand for high-quality video content on our search platform," said Ren Xuyang, Baidu's VP, marketing and business development.
Baidu has set up an independent company to work with content providers to provide ad-supported copyrighted video content including movies, TV series, sporting events and animation.
The company, as yet unnamed, will be run by CEO Gong Yu, formerly president and chief operating officer of China Mobile's 12580 business. Before that, he was chief operating officer of Sohu.com, one of China's top portals.
CCTV forms alliance with AdChina
The state-run broadcaster China Central Television (CCTV), meanwhile, has formed a partnership with AdChina, a Chinese integrated digital media platform, to develop a national internet TV station.
A joint venture launched by those two companies at the end of last month, China Network Television (CNTV) broadcasts Chinese-language content including news, sports, entertainment and podcasts on multiple digital platforms at www.cntv.cn.
This year, CNTV plans to launch more channels with content such as financial news, films, TV drama series, documentaries, weather, education, travel, and music. CNTV will also use shows airing in real time from CCTV and other TV channels, and air content in other languages.
CNTV is not an online-video sharing site like many leading web TV platforms in China. The content is largely pulled from CCTV's massive video resources.
According to CCTV, the joint venture will also establish online video ad guidelines and standards. This month, CNTV launched the CNTV-AdChina Online Video Ad Lab to develop innovative ad formats, audience segmentation and ad targeting and optimization technologies.
CNTV will develop a brand tracking system to allow advertisers and agencies to measure the online video ads' impact on brand metrics on CNTV and in the industry. CNTV is licensing AdChina's AdManager as its ad serving, tracking, and brand measurement platform.
China's established video-sharing sites are also moving towards offering licensed content and taking steps to weed out pirated content. Last month, for instance, Youku.com raised $40 million in part to develop and acquire professional content.
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