Baidu Video Tries Blockbuster Licensing
Baidu’s (Nasdaq: BIDU) online video joint venture Qiyi seems to have learned a lesson from its pirating parent, announcing a new exclusive licensing deal for the China online video rights for the popular latest installment in Paramount’s (NYSE: VIAb) “Transformers” movie franchise. (English announcement) Baidu itself has found big success in allowing the exchange of pirated material, mostly music, over its web site in recent years and continues to offer such services despite ongoing government pressure on Chinese web firms to get out of the pirating business. But in a nod to that pressure, in July it formally launched a service for legally obtained music, and announced a series of high-profile licensing deals to offer music on it from several major Hollywood record labels, though added it had no intention of closing its piracy-plagued older music site. (previous post) This new strategy from Qiyi, which already appears to offer legal copies of popular US TV series, looks relatively smart to me, drawing on exclusive rights for individual big-name movies to draw in viewers. Still, it will have to compete with the likes of online video leader Youku (NYSE: YOKU) and the video site operated by Sohu (Nasdaq: SOHU), which have also signed similar though much bigger deals with major Hollywood studios in the last few months. Its unclear if Qiyi, founded less than 2 years ago, will be able to pay the big bucks that these older, more established companies are paying for exclusive rights to big-name films, which may explain its approach of buying of single blockbuster title rather than signing broader licensing deals which are much more expensive. The company also has the advantage of tapping a huge potential audience of users from Baidu, China’s dominant search engine with nearly 80 percent of the market. That tie-up, combined with this early approach to exclusive licensing for single blockbusters, could create a potent formula for success as Qiyi looks to establish its name in the online video space.
Bottom line: Online video site Qiyi’s signing of an exclusive deal for a single Hollywood blockbuster looks like an interesting approach, which, combined with support from parent Baidu, could boost its chances for success.
Related postings 相关文章:
◙ Baidu Comes Under Government Fire 政府“修理”百度
◙ Baidu Seeks Diversification in Tudou Talks 百度求购土豆，寻求多元化
◙ After Years, Baidu Does the Right Thing 百度多年来的一个正确之举
