High-quality online video has been in high demand in China, and Chinese search provider Baidu is hoping to fulfill that need.
Baidu announced on Wednesday that it is creating an independent company to offer premium online videos to Chinese Internet users. The new entity is designed to work with content providers to supply copyrighted material, including movies, TV shows, sports, and animation, and it will generate its revenue through advertisements.
"As China's Internet industry evolves, we have seen increasing demand for high-quality video content on our search platform. By establishing this new company, we will be able to better serve our users and customers with superior content and focused resources," Xuyang Ren, Baidu's vice president of marketing and business development, said in a statement.
"Online video is a rapidly growing sector in China, and I believe Baidu's search platform will provide a solid foundation for the new company to address the increasing demand for premium content," said Yu Gong, former president and chief operating officer of China Mobile's 12580 hotline service, who is set to head the new venture as CEO.
Baidu, which has outshined Google's Chinese search engine to become China's top search provider, has been eager to get into the online-video business.
But video has long been a thorny issue in China, as the country has grappled with video piracy for years. DVDs of pirated movies and TV shows have been a lucrative business in the Chinese market, with obviously no compensation to the studios, networks, and other content providers. Pressure from the United States has pushed the Chinese government to try to crack down on the illegal trade. But the low cost and wide availability of pirated videos have kept it a thriving market.
Piracy has gone more high-tech in recent years. More and more illegal videos, including full-length movies and TV shows, have shown up on popular Chinese video-streaming sites such as Youku and Tudou. A group of content providers filed a lawsuit late last year against some of these Chinese sites, charging them with copyright violation, China.org reported. So far, the case has resulted in a legal judgment against Youku, ordering it to pay a small sum in damages.
TVs with Internet access have also become a new haven for video piracy, as Chinese users can now download illegal videos directly off the Web into their living rooms. The Google-funded service Xunlei, a Chinese peer-to-peer file-sharing service, has been the target of lawsuits, alleging that it distributes copyrighted movies and TV shows without compensating the studios or networks.