Distribution vs. Content: Who Reigns Supreme?

16 Mar

Distribution vs. Content: Who Reigns Supreme?

I will be the first to admit that I am a very avid fan of Alibaba in China – and Taobao in particular. We’ve commented on Taobao’s success against eBay as the premier online auction site in China as well as discuss Jack Ma’s (CEO of Alibaba) unique and innovative management style of his company.

We’ve also talked a lot about online videos – and in particular, the trend of unlikely online companies that are entering this extremely fast-growing market. We discussed Shanda (online game company) and Baidu (search engine) who have both publicly made known their interest in entering this lucrative market. Now, Taobao is putting in its bid as well and plans on creating a digital entertainment channel that will be completely ad-supported.

The significance of Taobao’s entry into the online video market is not as much of Taobao specifically, but of the trend over the last 18 months of how this market has grown. Comparing it side by side with the United States, the manner of growth in each of the respective countries is quite opposite in nature and is a good indication of how this market will continue to evolve.

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