Both content producers and advertisers are starting to recognize and leverage the potentials of reach and revenue from using the Internet as a channel for original, made-for-Web content that is targeted at online audiences, say market players and analysts.
Claus Mortensen, principal of emerging technology research practice group at IDC Asia-Pacific, told ZDNet Asia in an e-mail that the rise of original content such as entertainment programs and movies meant exclusively for the Web is a trend that will "no doubt continue and expand".
Mortensen explained that made-for-Web content first came about through video sharing sites like YouTube, where initially users would produce their own amateur videos. As the video-sharing phenomenon grew, semi-professional productions started to appear, and nowadays the "Web is increasingly being recognized as a viable and necessary channel for video channel", he added.
Ben Cavender, associate principal at China Market Research Group (CMR), concurred. He said in an e-mail that while Web-exclusive content is still in its early stages, it will "become more popular and mainstream as broadband penetration continues to rise".
Reach and returns on investment (ROI)
Adrian Drury, principal analyst at Ovum, noted that monetization opportunities do exist for original, made-for-Web content such as Web video advertising, sponsorship and product placement.
Brands and advertisers are "using 'Webisodic' content to create specific brand-driven narratives, Drury said, citing Dutch electronics giant Philips's own Web show, Nigel & Victoria. The show is an online comedy series created to showcase the company's latest products such as iPad accessories and headphones.
CMR's Cavender noted that Web-only content has "huge potential" in China because a vast majority of Chinese netizens below the age of 35 are getting their entertainment fix via the Internet rather than through traditional media channels like broadcast television.
Furthermore, the Internet is becoming increasingly important in China as a digital marketing platform, because as rates for ad space on TV continue to rise, advertisers are looking at other ways to reach potential customers, he noted, and referred to two of the country's online video sites, Tudou.com and Youku.com, which have each released their own Web entertainment programs.
Tudou.com debuted its first Web drama series 'That Love Comes' Oct. 15, which was produced specifically for the young, urban audience aged below 35 in China, said its vice president of marketing and business development, Anita Huang. The series was made by Tudou Orange Box, Tudou's own production unit, and consists of 12 episodes, each 30 minutes long.
Huang said in an e-mail that the average age of the TV viewer in China is 42 whereas the average age of the Internet video audience is 29. Hence, streaming shows that once appeared on broadcast TV would not satisfy netizens' tastes, she continued.
By producing its own Web series, Huang noted that Tudou is able to bring in more monetization possibilities, as the video site serves a demographic that is highly attractive to brands that want to reach out to young and trend-savvy consumers. She said that "Advertisers' interest towards sponsoring or placements in [original Web] content is extremely high towards this audience [group]". For instance, global brewer AB InBev, one of the sponsors behind 'That Love Comes', has its BudLime beer featured in the episodes as part of the beverage's introduction to the Chinese consumer market in 2010.
Huang added that Tudou is "making significant investment in made-for-Web original content production" and plans to produce two to three Web dramas yearly. However, she also acknowledged that such investment costs more than hosting user generated content (UGC) or buying old series or movies, hence the company will look at its content strategy holistically and adjust its investment according to consumer demand and market competition.
Chinese online video site, Youku.com, also has its in-house production unit, Youku Originals. Jean Shao, Youku's senior manager of international public relations, said that the company launched the "11 Degrees" New Media Film Project in April this year, which is a joint effort with China Film Group and Chevrolet, and features 10 original short films that are streamed online per week. Shao said that the first film, The Boxer's Secret, which premiered Aug. 20, received nearly 3 million views, and so far, the 8 serials already released online have generated more than 24 million views.
Shao also pointed out that more and more advertisers are proactive and supportive about Web-based shows. For example, Youku's partner, Chevrolet hopes to tap China's fast-growing automobile market by having its Cruze sedan appear in all 10 short firms of the project.
Market potential for growth
Gillian Tan, founder and creative director of Singapore video Web site, clicknetwork.tv, said that while producing original Web TV content can give good returns, results could take some time since the platform is still considered to be something new. However, she added that "in online space, things change and move pretty quickly, so I believe that in the next few years, the growth [of original Web-only content] will be exponential".
Clicknetwork.tv showcases original, short Web video episodes that are produced and developed in-house by its parent TV production company Munkysuperstar Pictures, where Tan is also director. Since its launch in 2007, the site's daily viewership has jumped from one to two thousand to about 50,000, according to Tan.