CRI听力:Change in Store for China's Online Video Market

There was a time when most internet videos were amateur.

But now watching TV online is big business – especially in China.

A recent report from financial analysts Barclays Capital says in 2011 the cost of rights for some Chinese dramas rose 600 percent compared with the year before.

Palace is one Chinese drama available online.

Palace 2 is expected to come out later this year.

Chinese internet firm Tencent reportedly bid over 11 million dollars for exclusive rights to host the show online.

Steve Dickinson is a lawyer based in China specializing in intellectual property.

He says such high prices will force smaller companies out of the market.

"And of course it will have an effect because the truly marginal players will be driven out. And the only ones that survive will be ones that can really do the job. And in the United States, which is a much more active market in this than China, we found only a few companies can survive once it becomes legitimate."

Perhaps a sign of this change was last summer when Xunlei, a relatively smaller Chinese internet provider, failed to IPO on America's NASDAQ stock exchange.
 
In contrast, the IPO of China's two biggest video portals last year, Youku and Tudou, raised a combined total of over 400 million dollars.

But now both are suing each other for over 15 million dollars, each claiming the other pirated their content.

It's difficult to see how smaller players can compete in such a climate.

But Steve Dickinson says these huge amounts of money are a sign the country's media industry is moving forward.

"China's film and television and publication industry has been crippled for the past 20 years because they haven't really been able to reap the rewards of their work. Now, if they can ensure that their product won't be immediately stolen from them they can develop and become a mature industry. So the industry that's maturing isn't these websites. The industry that's maturing is the film, video, music and publication industry in China. That's the industry that's maturing and the websites are just becoming a medium for allowing those industries to mature, and that's a completely good thing."

China's internet sector has come a long way over the last few years. But experts predict much more change in the years to come.

For CRI, I'm Dominic Swire.