(Yicai Global) Aug.10 --Thevalueof China's paid content market will rise to CNY829 billion(USD121 billion) by 2022, almosttwiceits currentCNY444 billion, perthe latest projections byUBS Securities. It found the paid content segment with theswiftest growth will be online videos duringthe2018-2022period.

"Though investorshavebegun to worry that the population bonus of China's internet industry is disappearing, we think that the opportunity from paid content is growing,"Liu Zhijing,a director and analystwithUBS Securities, said ataforumon the topic the firm held yesterday.

Thisconclusion was drawnfrom acomparison with the paid content market of the US. "Historically, America's media sector saw a shift in its industrial mainstream, namely from advertising revenues to membership fees," Liuadded.

"AUSmarketstudyconducted in 1972 showed that 90 percentofpeople were disinclined to pay for content.Byaround 1980, however, thesectortook off, and a similar storywill unfold in China,"Liusaid.

"UBS Securities holds theviewthat by 2022 paid content will cover around half of the media market,muchhigher thanthe34 percentoflast year.Thiswillthus present opportunities to content producers in the A-share market, for their current valuations are far lower than that ofoverseasinternet companies andtheir USpeers," Liuadvised.

Among these paid content segments, the one with theswiftest growth during 2018 to 2022 will be online videos,Liu projected.

Excluding non-core incomes like selling copyrights, the annual average growth rate of China's online video industry in the next half decade is likely tohit28 percent, anditsscale will rise to CNY242 billion in 2022, Liu believes. The annual average growth rate of revenues from paid subscriptionswill reach 41 percent in the next five years, and the number of subscribers for online videoswill growalmost one and a half timesto 223 million, with the penetration rate among Chinesereaching 50 percent.

Major paid content platforms in China stilloperateataconsiderable loss, and the three major video websites have been in the red for years. Faced withrising costs, can the pay-for-content model improve the profitability of thissector?

"Currently, the annual membership feesof the three major video websites is only CNY198(USD29),showing a significant gapwith, e.g.Netflix and CNN, whose averageyearlysubscriptionfees areCNY629 and USD1,000,respectively,Liunoted.

Chinese video websites'membership prices are thus bound to rise greatly in future,"Liu predicted.

Editor: Ben Armour