Tim Siglin is a streaming industry veteran and longtime
contributing editor to Streaming Media magazine.
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Last month, I covered the topic of a poten- tially formidable Amazon competitor, Al- ibaba Group, rising in China to challenge
Amazon’s ecommerce dominance and its cloud-based services, including streaming services.
This month, let’s look at another angle: the
pitfalls of competing in Alibaba’s home market.
China is a market fraught with peril, from incompatible video formats to a highly regulated
Let’s look at the bigger picture first: How well
can a company that stakes its success on allowing users to communicate fare in China? In some
cases, the biggest websites cannot. A quick look
at Wikipedia shows that, as of late 2015, almost
3,000 Western-owned websites were blocked in
The specific sites that are blocked (but are
still allowed in Hong Kong and Macau) are not
allowed based on the country’s policy of internet
censorship. According to GreatFire.org, which
works to bring transparency to Chinese web
surfing policies, companies such as Google and
its video-centric subsidiary You Tube have been
blocked for years.
You Tube in particular has been blocked from
mainland China access since March 2009. Facebook has been blocked since July 2008. Instagram
was blocked more recently, in September 2014.
For its part, GreatFire.org is working on a
stable virtual private network (VPN) that users
within China can use to view content not officially allowed by Chinese web censors. VPNs
have existed for years, but often only on a small
scale, and seldom as part of a concerted effort
to allow enough of China’s almost 1. 4 billion citizens to view any content on the web.
Along with firewalls and blocked websites
come the issues of underlying technologies. The
thinking in China appears to be one of replacing
industry-standard technologies—which could
be used to view content on blocked sites like
Facebook or You Tube—with homegrown technologies that serve the domestic market.
While the West is focused on Google’s efforts
to push VP9 as an open-source, royalty-free
replacement for H.264, the Chinese market has
been pushing the Audio Video Standard (AVS)
as its own way to replace H.264 and the AAC
According to the AVS webpage (go2sm
.com/avs), almost 90% of the AVS patent pool is
owned by Chinese companies. Never heard of
AVS? You’re not alone, as it hasn’t received the
same traction outside China as other royalty-free offerings.
One reason is that the AVS group, tasked by
the Ministry of Industry and Information Technology of the People’s Republic of China to come
up with an alternative to MPEG- 2 and H.264, uses
Chinese as its working language. This means
that documentation is first created in Chinese
and only later translated to other languages.
Specs for the most recent version, AVS 16, are
available in English at go2sm.com/avsenglish.
Even the disc-based, high-definition formats
aren’t available outside of China. Despite its
name, China Blue High-Definition (CBHD) isn’t
a modified Blu-ray format. CBHD, alternatively
known as China High Definition DVD, was announced in 2007 and derived from the HD-DVD
(red laser) standard that was abandoned in the
West when Blu-ray won the format war in 2008.
But despite web censorship and replacement
video technologies, Chinese investment in premium content is at its highest-ever levels. In
early October, Alibaba pushed forward with a
plan that Bloomberg heralds as a way to “bring
Hollywood to China” by buying up portions of
North American media companies.
“Alibaba Pictures Group Ltd. is buying a stake
in Amblin Partners, the production outfit backed
by Steven Spielberg to work together on pro-
duction, marketing and distribution both glob-
ally and in China,” Bloomberg News writes, not-
ing that Jack Ma’s investment in Spielberg’s
storied media firm is “the latest in a spree of
deals over the past two years intended to help
U.S. studios tap what could soon be the world’s
largest box office. …”
In other words, content is king, even if the
technology to view the content in the domes-
tic Chinese market can be described kindly as
Looking East, Part 2