China's Internet piracy could slow efforts by web engines Sohu, Baidu, and others seeking online video ad revenue. “Rising theft of movies and TV shows in China could scare away movie and TV studios from bringing more of their wares to China’s websites,” says Paul Kocher, president and chief scientist for Cryptography Research. He reckons that could delay a wider rollout of the online video ad market there for a decade or longer.”

With 384 million Internet users, up 29% from 2008, China has the world's largest Internet population. By 2012, more than 284 million Internet users in China will watch or download video, up from 98 million in 2007, says research firm InStat.

In January, Baidu, China's No. 1 search service, revealed plans to launch a video site with news, sports and other content. The site will largely depend on video ads, which run before, after or during videos.

China Web portal Sohu expects to start getting "meaningful" revenue from online video ads this year, its chief executive, Charles Zhang, said during the company's earnings conference call last month.

"You will see in 2010, it will become kind of meaningful, but in 2011, it will be pretty meaningful, however any boost in video ad revenue hinges on winning the war against piracy,” Zhang adds.

Analysts say there are some 100 sites in China that let consumers post their own home videos online. But some people also use those sites to upload movies, TV shows and other pirated content. (Source: Investor’s Business Daily)

Story filed 16.03.10