12 Nov 2009 11:32

Youku to launch for pay per view video services

Beijing. November 12. INTERFAX-CHINA - Chinese video sharing and broadcast site www.Youku.com is preparing to launch a pay per view video service, making it the first video Web site in China to do so, a Youku employee announced on Nov. 11.

Victor Koo, Youku's chief executive officer (CEO), said that the site has begun preparations to offer for-pay video services and that the company has positive expectations for the service, which Koo says will offer exclusive and original content.

"The pay per view platform is ready. However, we believe users will only pay for certain content, like sport events and special interest entertainment programs. Once we designate the appropriate content, we will launch the pay service for users," Koo said.

According to Koo, users have exhibited increasingly diversified viewing tastes as the market continues to evolve, encouraging more video Web sites to offer niche content and giving these sites the ability to charge for such specialized content. Youku has already conducted some for pay per view video trials, which showed positive results, though Koo believes there is still some risk involved, as not all Chinese viewers are willing to pay.

Until now, video Web sites like Youku.com and Tudou.com have relied on advertising to generate revenues, and many of these sites have not yet been able to generate profits from this business model.

Youku's move to introduced pay per view video services indicates a possible future industry trend towards this new revenue model.

Interfax reported on Nov. 4 that content distributors urged video broadcasting sites to adjust their current revenue models to implement viewing fees in order to protect copyrighted material.

Li Tianyu, researcher with China Internet Network Information Center, told Interfax that facing pressure from content distributors, video Web sites are feeling pressure to test this new business model, or risk lawsuits and/or heightened procurement costs.

Although mobile payment is convenient in China, it remains to be seen how well video Web site users will respond to the pay per view model.