Online video is revolutionising media consumption in China, Japan and Korea, which could serve as an example of the future for television elsewhere. As well as being significant media markets in their own right, these countries offer indicators for new consumption patterns in other territories.
So far, it seems consumers are trading high quality television experiences for low resolution online video clips. However, as online video markets mature and consolidate, a new report suggests there will be real opportunities for content owners and platform operators to partner with web video aggregators and trial new distribution models.
The report was commissioned by CASBAA, the Cable & Satellite Broadcasting Association of Asia, on behalf of its members and includes an excellent introductory video presentation. The association recognises that online video distribution, and rampant piracy, present a real threat to the pay-television industry, but also, they argue, a major opportunity.
“Online Video in China, Japan & Korea presents our industry with challenges, but also great opportunity,” said Simon Twiston Davies, the chief executive of CASBAA.
“With the development of high-speed broadband infrastructure and web-connected mobile devices, in some markets uncontrolled online video distribution has become an almost irreversible trend among young urbanites and professionals,” he said. “The upside of this for the pay-TV business is a huge market for paid delivery platforms, quality VoD and advertising.”
The report was prepared by Mike Walsh who heads the consumer innovation research agency Tomorrow. He said: “Youth audiences are redefining how they want to experience television. Watching video online could be just the start, transforming the relationship between content, consumers and brands.”
There are well over 250 million online users in China, of which at least 180 million are regular viewers of online video. Around half of them are under thirty years old and online video is the fourth most popular internet application.
Unlike the West where the internet has developed primarily as an information and business tool, web usage in China is predominantly for entertainment. Music, messaging and movies are the top uses of the internet by individuals, ahead of email.
Cyber cafés are incredibly popular in China among the urban youth. Nearly 40% of Chinese netizens access media from internet cafés.
“With its large urban youth population, fast broadband and a loose copyright environment, China is a kind of future lab for where media consumption might go next,” said the author the report.
“For the young urbanites in China it is very clear that they are not consuming television nearly as much as they used to,” said Kaiser Kho, head of digital strategy at Ogilvy China.
Online video YouTube lookalike sites are proliferating, proffering professionally produced pirated programming.
In Japan’s mature advertising market, mobile TV advertising has emerged in the last year or so as a newly dominant channel for revenue growth. Japan’s mobile centric culture has also driven strong usage of video sharing sites on mobile phones.
In Korea, more than a third of Korean internet users, mostly me, watch movies online in some form, with file-sharing as a mainstream activity. With broadband penetration above 85% and speeds greater than 100Mbps, Korea is seen by some as an interesting test bed for what could potentially happen in other markets.