China’s YouTube — video site 56.com — announced today that it had created a platform called “56 Kankan,” which lets users to sell videos to each other (of which 56.com takes a cut). Users of the platform pay a small fee in order to view the videos for 15 days, after which they must pay an additional fee to watch the videos for another 15 days.
CEO Wang Jianjun said the company would take 10% of the sale, with the remaining 90% going to the content provider. Users can also sell videos on widgets embedded on their blogs or other websites.
It is difficult to see how a new service like this would make much money. After all, who would want to pay for an amateur online video, never mind for only 15 days? Then again, many said the same thing when Chinese gaming companies and social networks started selling penguins and souped up virtual cars to users for a fee. And look what happened.
China has proven to be ahead of the curve when it comes to making money online from revenue streams other than advertising. Chinese companies like Tencent and Changyou have been making billions from the sale of virtual goods sold in video games and social networks while U.S. companies are just starting to realise there is serious money to be made there.
While this may not vault U.S. video sites like YouTube into profitability, maybe these sites should follow the Chinese and not be afraid to experiment a little.
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