image:cnaif.com

Online video outpaced social networks, becoming the most popular online service in terms of time spend, declared Luo Jianhui, director, department for online video and audio, SARFT(State Administration of Radio, Film and Television) , at CNAIF, the annual event organized by SARFT yesterday.

He revealed some numbers to conclude 2012:

  • Chinese online video audience reached 450mn, covering over 70% of the total Chinese internet users.
  • Mobile phone video audience surpassed 100mn.
  • OTT TV (over the top TV) devices cover over 30mn families.
  • IPTV, through CNTV and BesTV platform, reached 21mn households (The total cable TV households are 31.25mn.)
  • Online video advertising is estimated to surpass 9bn yuan ($1.45bn).

 

IPTV

According to DVBCN, a research and consulting agency in TV industry, IPTV households reached 28.3mn in the third quarter of 2012, even higher than the number, 21mn, released by SARFT. There are more IPTV users in southern provinces or cities such as Guangdong, Jiangsu, Zhejiang and Shanghai. There are approaching 3mn in Guangdong.

Telecom operators partners with content providers, such as BesTV, offering videos on demand, subscription-based, and other value-added services. According to an industry insider (article in Chinese), IPTV “open rate” is even higher than that of conventional TV, for, apart from TV programs, users can access videos on demand, games, music and even education applications.

Carriers and authorized content providers would share subscription fees. Third-party application developers can get a revenue cut through paid value-added services. Guangdong division of China Telecom sees 25% of all users pay for premium content, games, movies, Karaoke, etc., according to the insider mentioned. He expects, in general, the average monthly revenue per user, excluding monthly subscription fees, can be 30 yuan ($5).

 

OTT TV

The representative of SARFT reiterated policies on internet TV:

1) content providers must have authorized SARFT licenses — the license for cable network operation isn’t applicable;

2) integration platforms must be built by authorized subsidiary bodies of SARFT;

3) device manufacturers must partner with authorized integration platforms, producing devices with serial numbers granted by SARFT and distributing them in three pilot cities, Shanghai, Changsha and Hangzhou.

In this case, Xiaomi Box has to apply for serial numbers — it determines how many devices can be shipped, only carries content from WASU — its license-holding partner, and sells products only in the three cities mentioned. Of course, Xiaomi can sell its set-top box as jailbroken Apply TV that will works well with the Duokan software.

The number of  households that have adopted OTT TV, 30mn, must only include set-top boxes and other devices that carry official content and be lower than the reality. Numerous manufacturers in southern China are producing devices that have same functions, if not even better, with those Xiaomi Box had claimed before SARFT stepped in. Some can make a device small enough or costs low enough. It’s not likely that SARFT will one day go after them, for this market is pretty fragmented — unlike some other devices that authorities at national level would order local governments to purchase from selected companies — that those manufacturers cannot be too big, or so foolish as Xiaomi Box to have a high-profile launch.