Online Video Faces Tough Sell with ‘Buy as You Watch’

(Beijing) – They employ thousands and boast state-of-the-art facilities like film production studios and video-on-demand data centers. But to financial analysts, China’s online video services are little more than black holes for investor cash, with no hope of turning a profit anytime soon.

The profit challenge comes despite more than a decade in business and billions of dollars from eager investors hoping for big returns. The problem lies in the business model, say analysts, and the video companies’ overreliance on advertising as their main revenue source. Until that changes profits won’t be coming anytime soon, said Wang Ran of CEC Capital.