Online video is now mainstream to both Chinese consumers and marketers

Video advertising consumption in China has over-taken television advertising, a new report from Forrester has found. Based on analysis of Chinese online consumers’ video consumption behaviour and marketers’ spending intention, online video has become mainstream to both Chinese consumers and marketers.

The report showed 95% of metro Chinese online adults are watching videos on a computer at least monthly, compared with 49% in the US. It also found that 72% of metro Chinese online adults prefer advertising-supported free content over pay-per-view content.

This means that marketers in China are now shifting ad budgets from TV to online video in China, as apposed to the US and Europe where online video is taking budget from print or direct mail.

The report also pinpoints two key issues that marketers encounter in video marketing in China, the first being price inflation due to limited ad inventory. It found that the demand for professionally produced digital video content is outstripping supply, driving up the cost of creating content. On the other hand, video platforms have prolonged pre-roll ad length to create more inventory and cause a new problem of ad clutter.

The second issue was the complex and fast-changing video platform landscape. The report describes two recent mergers, Youku-Tudou and Baidu-iQiyi-PPS, that have reshaped the video making landscape.


Apple’s new Mac operating system aggressively pursues Chinese market

Apple has signalled a desire to encourage the exploding number of Chinese Mac users by including some significant China-specific features in its upcoming desktop operating system dubbed ‘Mountain Lion’, news of which broke late last week with an official announcement on Thursday (US time).

Along with a number of features that will continue to narrow the gap between Apple’s desktop/laptop operating system (OS X) and that for its mobile devices (iOS) comes system-wide, built-in support for popular Chinese email services QQ, 163 and 126, social networks Sina weibo, Youku and Tudou, and search engine Baidu, the country’s top-ranking website and fifth globally.

Apple’s Mountain Lion preview page lists 11 highlights of the upcoming operating system, the last of which is ‘All new features for China’. From Thursday’s release:

“Mountain Lion also has features specifically designed to support Chinese users, including significant enhancements to the Chinese input method and the option to select Baidu search in Safari. Mountain Lion makes it easy to set up Contacts, Mail and Calendar with top email service providers QQ, 126 and 163. Chinese users can also upload video via Share Sheets directly to leading video websites Youku and Tudou, and system-wide support for Sina weibo makes microblogging easy.”

Apple CEO, Tim Cook, says that even with the success of the company’s mobile devices outshining that of the Mac in terms of sales, it is still ‘incredibly important’, especially in markets such as China, where Mac sales doubled last year: ”They love the iPhone and so they then search out and look for the Mac,” Cook told The Wall Street Journal, in an apparent acknowledgement of what analysts have dubbed the ‘halo effect’, where the popularity of the iPhone, iPad and iPod attracts new users to Apple’s desktop PCs.

On a related note, the announcement of Mountain Lion came as a surprise to many in the tech press as Apple, usually the subject of countless rumours around upcoming product launches (type ‘iPad 3′ into any web search), managed to keep this announcement quiet up until its official release on Thursday.