About this Blog

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.

Sunday, April 1, 2007

SINA – SOHU – NTES – Video Shootout part4

Video Shootout Part 4 – Portals’ competitors – P2P

Independent P2P Video Streaming Programs -

Major competitors to the portals are actually the 3rd party P2P programs. Programs such as PPLive, PPStream, TVAnts, and TVKoo allow the users virtually all the programs on the internet for free.

If you want to watch a 007 movie, search for it and having it streaming to you. All the major TV channels in China can be found on these programs. In addition, these programs do not add any additional ads.

Let me give an example of these 3rd party P2P programs. Let me just use PPStream as an example. The following is the web site for PPStream, www.ppstream.com

Not much to see here. On the top, there is a button called Total Channels. Let me click that, and we go to the following page:

It goes to the first page of the complete TV schedules of all the programs that is currently playing. There are a total of 12 pages, each page has 30 TV programs, and a total of 349 TV channels that are playing at the same time.

That is 349 simultaneous TV programs that are playing at any given time. PPStream does not have to pay a dime to get any contents (they are pirated content). PPStream does not provide the content, but they do provide the schedule and organize it so any viewer can search for any video they want to watch.

There is no way the portals can afford to provide so much content.

So how can the portals compete?

Maybe this is the reason that Sohu is concentrating on self-generated contents. But in that case, the portals have to make the content interesting so people want to watch.

Another thing of interests happens in the last couple of months. Almost all 3rd party P2P programs stop claiming to carry certain CCTV channels. Actually, one can still use the program to get CCTV programming. But the program itself stops providing internet links to the CCTV programs. More importantly, the program no longer provides statistics of the links to the CCTV programs to the viewers. It makes it more difficult for the viewers to watch the CCTV video. As China gets more serious in stopping piracy, then Sina’s approach does make sense.

If China gets serious in stopping piracy (at least for China’s own channels), it might just be too cumbersome for Chinese viewers to use these 3rd party P2P programs. If Sina signed all the major channels in China, the user might go to Sina instead even though Sina’s video will have ads.

So far it is clear that if the Chinese TV channels care about it, they can put pressure on those 3rd party P2P programs to make these pirate programs’ life difficult.

For a local TV channel like Guangdong TV, there is no incentive for them to stop programs like PPStream. In fact, PPStream gets their TV contents more eyeballs.

This is where the portals can come in and be pro-active.

At this point, there is little incentive for most Chinese TV stations to care about P2P. But if a portal like Sina, Sohu, or Ntes can come in and provide revenue sharing with these TV stations. As these TV stations realize that they can make additional revenue (that is not available to them before) without doing anything extra, they will put pressure on these pirated P2P programs.

Of course, even if these 3rd party P2P programs stop claiming to support these TV stations, because of the distribute nature of P2P, TV programs like CCTV will still be carried on these 3rd party P2P programs.

Right now PPStream no longer claim to support CCTV, but one can still get CCTV on PPStream. But that would be easy for the portals to fix.

Because of the open nature of P2P technology, it is impossible to stop CCTV feed on PPStream. But the same open nature of P2P allows somebody (like Sina or Sohu) to create more CCTV feeds. Therefore, instead of 2 or 3 CCTV feeds on PPStream, there will be 20 or 30 feeds carrying the same program on PPStream. Because the main PPStream website is no longer allowed to provide link statistics, a viewer has to click on many feeds before he can get a good link. It makes for a cumbersome experience for the viewers to use PPStream to watch CCTV.

In summary, right now P2P programs like PPStream dominate the internet video market. They don’t give any revenue to the TV channels. But these TV channels don’t care because they are not in this market.

But there is a clear path for the portals to take this market away from these independent 3rd party P2P programs.

In part 5, I would talk about the other challenges that face the portals. Part 6 concludes this article.

No comments:


A test for now