20160103_issue_china_01

Broadcast Explosion in Greater China

According to IBISWorld’s TV & Radio Broadcasting market research report, China’s TV and Radio broadcasting industry is expected to increase at a yearly rate of 13.0%. The figure is driven by the accelerating convergence of telecommunications, internet, cable TV network operations and digitisation rate. Revenue in the industry is expected to increase by 9.8% from 2010 to $7.2 billion in 2015.

With an estimated population of nearly 1.4 billion, the world’s most populous nation boasts the largest number of internet users; 668 million. With nearly half of its population on the internet, online video websites- Youku Tudou, iQIYI, PPTV, Sohu, Tencent, LeTV- are increasingly more popular.

Youku Tudou, China’s biggest online video giant, features commissioned programmes from a myriad of channels including Hong Kong’s TVB and CTE and also user-generated content.

In November 2015, Youku Tudou and Mirriad Advertising entered a long-term exclusive collaboration arrangement in China. The alliance will see Youku Tudou connecting brands with Mirriad’s technology, enabling advertisers to digitally insert their brands into video content. Samsung capitalised on the first Mirriad campaign that lasted throughout 6 episodes over a two week period.

In that same month, Alibaba and Youku Tudou signed a definitive merger agreement whereby an affiliate of the Alibaba Group will acquire Youku Tudou in an all-cash transaction. Shareholders of Youku Tudou will have the right to receive $27.60 per American Depositary Share (representing 18 ordinary shares of Youku Tudou) in cash.

Prior to this in late September 2015, G.hn standard in-home networking products were made available on Chinese e-commerce sites such as Alibaba and Taobao. The products include G.hn power line adapters attached via Ethernet to broadband gateways. Embedded in IP-Networked HD TVs, G.hn can also be used to connect Blu-Ray players and set top boxes. With G.hn, users can automatically gain access to the Internet and other home network devices as soon as they plug their smart TV into an AC outlet.

In March 2015, Irdeto announced its latest anti-piracy success with Alibaba, whereby over 5,000 online advertisements for pirate devices from 71 manufacturers and suppliers on Alibaba.com were identified and taken down in a month. Alibaba played a pre-emptive role in assisting with the removal of 5,389 ads marketing pirate devices offering content from Irdeto’s pay-TV operator customers. As at 15 June 2015, iQIYI had reached five million paid streaming subscribers; a 765% annual increase. With a wide range of premium content to its members, iQIYI hosted over 60% of movies played in cinemas in China, alongside over 400 internetonly movies.

Besides acquiring programmes, online video platforms like Youku Tudou have started to include more local productions via user generated content. Youku Tudou has a revenue sharing programme that allows qualified participants to be paid from advertisements placed in their videos which encourages more usergenerated content.

In November 2015, Honyee Media’s Chinese version of BBC’s Top Gear launched its first five episodes of the second season with a combined audience of 217 million across TV and online. Also, two-part series, China From Above, had gone viral with 130 million views on Tencent.

Strategic partnerships

In 2015, DHX Media signed a series of deals with these SVOD operatorsnamely Alibaba in September, and iQIYI and LeTV in November. iQIYI had acquired AVOD and SVOD rights to more than 400 half-hours of content. LeTV acquired OTT TV and web broadcast rights to 313 half-hours of Teletubbies in English and Mandarin. Alibaba had acquired more than 2500 half-hours of content for its VOD service.

In October 2015, BBC Worldwide signed a Memorandum of Understanding with Mango TV. The partnership will allow exploring for opportunities capitalizing on the strengths of each party, including coproduction and format opportunities in iconic BBC programmes targeting the Chinese and global market.

BBC Worldwide had also signed a Memorandum of Understanding with Shanghai Media Group (SMG) last April, expanding their strategic relationship to include programme and format production, programme distribution and co-production opportunities. The agreement will see BBC Worldwide working with several of SMG’s subsidiaries including BesTV, DocuChina, Dragon TV, Wings Media and Toonmax Media.

Internet content delivery

In October 2014, Akamai Technologies announced a strategic partnership agreement with China Telecom Corporation’s cloud division CT Cloud. As part of the partnership, CT Cloud will offer an integrated solution that incorporates Akamai’s full suite of media delivery, web performance and cloud security offerings to Chinese businesses. The partnership is also designed to enable close cooperation between the two companies in areas of technology and network access.

CT Cloud plans to leverage Akamai for content delivery network (CDN) technology that will be available for the delivery of its Cloud services. Akamai enables operators to deploy a highly scalable, completely turnkey CDN that leverages the same technologies found within the Akamai Intelligent PlatformTM.

PCCW Global, China Telecom Global (CTG) and Chunghwa Telecom International (CHTI) took the initiative to create a unified IPX (IP-eXchange) platform for Greater China, with agreements signed last year in May. The three partners will improve their seamlessly integrated service to their carrier, multinational and consumer customers, with unified platform.

Services supported from the deal includes VoIPX, GRX, Diameter, HD calling, HD video conferencing, Ethernet, cloud offerings and SDN. The platform will connect IP services between mobile and fixed networks using MPLS as the transport layer.

Co-productions

China has also upped its number of co-productions, working with several broadcasters and producers in the Asia-Pacific region. Huaso Film/TV Digital Production, the joint venture production company of Sony Pictures Television (SPT), and CCTV6’s HuaCheng Pictures concluded a deal with Croton Media to co-produce a local version of the highly popular and criticallyacclaimed comedy Mad About You for audiences in China. Shanghai Media Group has acquired the exclusive, first-run satellite TV rights to the series which debut early January 2016. The deal was made in December 2014.