CTS challenges China's piracy market

Click To See Media, an online video advertising group, is taking a firm stance against rampant movie piracy, investing millions of dollars in a business model that generates advertising revenue from online video and movie downloads through sponsored portals.

The business model is a breakthrough in China's online video market because as it uses an interactive media model (IVM) to distribute movies and advertising.

The format has never before been used in movies or advertising, according to Allen Law, CEO CTS Media.

He said the format is an open source software allows CTS to change and update ads to suit advertisers' needs and track impressions, even after the users has downloaded the content.

Baidu, in contrast, does not see this business model of online video and has instead sold its movie channel to UiTV, according to a media reports.

The market of pirated movies in China is vast, while online video consumption is booming, Law added.

"With 99.9% pirated movies out there in the market, there is no effective business model or a better policy to regulate the counterfeiting and piracy, and copyright issue in China."

"Five years ago, people would probably mock me for distributing legal movies online. But we are making profit out of this business model. It's a smart move and it is heading to a positive direction."

This business model is believed to be a legitimate idea to push China's market forward by cutting down on illegal movie downloads activities and winning online content providers' trust.

CTS was established by three capitalists, Sequoia Capital, Steamboat Ventures and Draper Fisher Jurvetson.