When it comes to video property in the internet space in China, it can be difficult to compete effectively, as evidenced by the recent merger of Youku and Tudou. The fierce competition of these internet giants is part of what has led to today’s latest rumor, which is that Sohu, Tencent, and Qiyu will be collaborating financially to purchase video rights. In the relatively high risk intellectual property market in China, the collaboration of these firms will allow them to greatly influence copyright prices, making these developments a rather significant step for the industry.
If the surprise merger of Youku and Tudou after their legal fighting this year is any indication, further cooperation should be expected between the three competitors. As the industry begins to mature in China and as access to content becomes more systematic, it may be in the interests of all parties to explore new options.
While this is an unconventional move, it should be expected to change the pace of the market and may indicate another merger in the future. A consolidation of the video market with only two or three large competitors may be a more profitable and effective model for the industry, though it remains to be seen what the three companies are currently planning.