Online video sites test movie fee system

10:14, January 21, 2011      

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The domestic blockbuster movie Let the Bullets Fly became available Thursday on several online video sites such as Sohu, Youku and Tudou, but different from the past, audience needs to pay a miniscule fee to watch it within a specific time frame.

Let the Bullets Fly was the best-selling year-end movie in 2010, which was released in theaters on December 16, and reportedly took in box office revenues of 650 million yuan ($98.66 million) to date.

Starting Thursday, consumers were given the option to watch the popular movie in either mandarin Chinese or the Sichuan dialect within 48 hours after making a 5 yuan ($0.76) payment. Several video-on-demand sites are offering the service including com, and tudou. com.

"This is our first attempt at charging domestic movie fans to watch local movies online, and to my surprise, many people are willing to pay," Yu Tao, the editor-in-chief of Sohu TV channel, told the Global Times.

Yu said he didn't expect people to willingly pay for it, as there are a lot of free movies available on the Internet, adding that it's just a test of the market acceptance.

But he insisted that free online movies are still the mainstream and will be here for some time to come.

Free online content currently accounts for 98 percent of the online video model, while the fee-based model only takes a negligible share.

Sohu only considers charging fees on the blockbuster movies like Let the Bullets Fly. The company also launched a service last month featuring copyrighted films, where movie buffs pay 20 yuan ($3.04) per month to view unlimited European and US popular movies for free.

Online video providers are forced to consider testing the fee-based model because they are under increasing cost pressure due to the need to beef up their image by touting only copyrighted content, said Wang Yi, consulting manager and entertainment analyst with EntGroup International Consulting.

"For many of the video sites, advertising revenues can't even cover rising copyright costs," said Wang.

Source: Global Times

They are just striving to accumulate a customer base, Wang told the Global Times, adding that with the convenience of third-party payment services such as Alipay, and improved copyright protection of the government, the market share of fee-based model will continue to expand in the future.

The National Copyright Administration launched a nationwide strike against online piracy in audio and video works in July 2010, and people could no longer find pirated copies of TV soap operas and movies on websites like Youku and Qiyi.

With more Chinese online companies, video providers listed or seeking to get listed in the US, the copyright issue will be given even more attention, Wang said.
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