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The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.

Friday, March 23, 2007

SINA – SOHU – NTES – Video Shootout part2

Video Shootout Part 2 – SOHU Video Activities

During the last couple of Sohu’s earning conference calls, Sohu management had been very enthusiastic about the future of video related activities in the company's future. Out of the three companies, I will have to say it was Sohu that did the best job in clearly articulating the importance of the video contents and what it means to the online ad business.

Now let us go to its main web site www.sohu.com

Unlike Netease’s main web site (and like Sina’s main web site), sohu.com has incredible amount of information on its main web site. Unlike western information portals, Chinese web portals cram every information possible on its main site. The above picture is the top of sohu.com. At the top, there are v and s that indicate the two main video channels that represents sohu’s main video intiatives. In addition, there are also individual news that have embedded video attach to it.

Now, lets scroll down the main page,

This is still on the main sohu.com page. But it is about one third down. On the left hand side, there are some news with embedded video. But on the right hand side, it has the schedules of Sohu’s two main TV channels (S and V channels).

Now, let’s go to Sohu’s sports page:

Right away, something interesting pops up on the lower right hand sides. It is a TV-like commercial for Asus (a computer company). The video is about 30 seconds. This is the most clear example of where Sohu thinks the future lies in online ads. Instead of the newspaper like contents, it is going to video or TV like in both content and ads.

I am sure average company likes the TV ads much more than just a picture ad.

Now let us click these ads away to show what is underneath the sports page:

Again, some news with an embedded video. On the right hand side is the schedule time for some of the S-channel TV programs. But on top, there are four items, they are NBA videos, CBA (Chinese basketball) Videos, Chinese soccer Video, and Olympic videos. Now, let us see what happens when we click the CBA Videos:

Right away, an embedded video is played. I am not able to capture the video, but the video did play. The whole page consists of links to embedded videos. Sohu has a lot of video contents on CBA. But I believe all the videos are embedded videos.

Now, lets go to one of the main channel, the S-channel:

On the left hand side, it plays the video. Again, I am not able to screen capture the video, but the video did play. The S-channel is more like a regular TV channel in that when you go to the S-Channel, it will show at whatever point the show is at. Unlike an embedded video where it is one to one (one video stream from Sohu to the viewer), S-Channel uses peer to peer technology and is one to many (one video stream from Sohu to many viewers).

On the left hand side, there are links to other videos. But those videos are embedded videos. There are also schedules of the S-Channel.

Finally, lets go to another main TV channel that Sohu is developing, the V-Channel. V-channel is developed for entertainment. While S-channel is targeted for men, the V-channel is targeted for women. The following is the V-channel:

On the upper left hand side is the video player that plays the V-channel. Both the S and V channels are developed by Sohu. Most of the contents of S-channels are sports games. Commentators hired by Sohu provide the play-by-play. There are also sports talk show programs. For the V-channel, a lot of programs are simple programs where attractive girls and boys get together and talk about dating, gossips about movie stars, or singing shows.

There are also 24 hours schedules for the V-channel. On the right hand sides are the stories with embedded videos.

However, there is something interesting on this page that is different than the S-Channel. Right below the video player are the list of 8 TV stations. The default station is the V-channel that is developed by Sohu. The other 7 TV stations seems to be from the third party partners. They seems to use peer to peer TV broadcast also. One of them is news channel and three of them are the provincial channels. They seem to be out of place in the entertainment section.

There are several observations that can be made:

1. There are more video contents than that of Netease. But the vast majority of the news doesn’t have embedded video.

2. Sohu themselves generate a lot of the news content. But they are in newspaper form. Will they start to generate news in the video form?

3. Sohu has a lot of video contents in sports and entertainment.

4. There are three types of videos. The first kind is the embedded video that is attached to a particular story or news item. This is one to one format and will take a lot of resource and bandwidth from Sohu if many users watch the same embedded video.

5. The second kind of video is the s and v channels. They are Sohu-generated video. It uses peer to peer technology like Napster or Kazaa. It will only take minimal amount of resources and bandwidth to support large amount (even up to millions) of users.

6. The third kind of video is the third party TV channels. Next to the V-channel, there are 7third-partner channels. Sohu seems to use peer to peer technology to broadcast these channels. These channels are 2nd tier channels in China (not first tier like CCTV, etc.)

7. Sohu seems to be pushing for its self-generated S and V-channel. That might explain the mis-placement of some the third party TV channels.

8. Most of the S Channel are third party sports matches (European football, NBA, or CBA matches) with Sohu provides commentary and play-by-play. Thus the % of content is mostly the matches themselves.

9. Most of the V Channels are completely self generated by Sohu. They can be very simple talk show format or Sogou music programs, etc.

10. The existence of video ads on Sohu’s web site.

Clearly, Sohu is putting a lot of effort in its video activities. It is especially concentrating in creating its own content (rather than licensing from third parties).

In part 3, I will investigate SINA's video activities. In part4 and 5, I will have a brief descriptions on other competitors. Part 6 is the conclusion.

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