Video site advertising revenue surges

Advertising revenue for Chinese video websites operated by Youku Inc (YOKU.NYSE), Toudou Holdings (TUDO.NASDAQ), Baidu Inc (BIDU.NASDAQ), Sohu.com Ltd (SOHU.NASDAQ) and others surged in the third quarter as government restrictions helped to push more young Chinese online, The Wall Street Journal reported. Revenues for China’s online video sites hit RMB1.48 billion (US$235 million) in the third quarter, up 48% from the previous quarter. Rates for online video ads outpaced those of overall internet advertising by growing 40-50% in some cities, said the ad-buying arm of WPP PLC (WPP.LOND), GroupM Interaction. The shift is partly due to video sites’ emphasis on cracking down on piracy and offering original programming – often featuring product placement – and licensed Western TV shows, such as “Gossip Girl” and “Mad Men.” However, the rush to broadcast original content has unleashed bidding wars for increasingly expensive copyrights, leading to predictions of an industry shakeup.