VIDEO PRODUCTION: An Internet drama is produced in a studio in Beijing (YING DI)

Both China Mobile and China Telecom intend to spend 45 billion yuan ($7.41 billion) each in building their 4G networks, while China Unicom plans to spend 10 billion yuan ($1.65 billion). It will take three to five years to put 4G infrastructure in place, and the total investment could range from 500 billion yuan ($82.6 billion) to as high as 1 trillion yuan ($165 billion).

Between the three companies, China Mobile has taken the lead in the 4G field. The telecom giant has invested 41.7 billion yuan ($6.87 billion) in over 100 cities and plans to expand its 4G network coverage to more than 300 cities this year.

In the 3G era, although reading text messages and viewing pictures transmitted to cellphones are common experiences, watching videos is still a luxury for ordinary users because of relatively slow Internet speed and high cost of mobile Internet services.

Industry analysts predict that as the maximum Internet speeds of 4G networks are up to 10 times faster than those of 3G ones, high-definition videos will become more popular with mobile Internet device users in the 4G era and that videos will eventually replace text and images to become the main form of content on social networking sites.

In August 2013, the State Council, China's cabinet, released a circular on boosting information consumption and expanding domestic demand. The document said that Internet information consumption is expected to grow at an average annual speed of more than 30 percent and surpass 2.4 trillion yuan ($396 billion) by 2015. The circular also said that the government will promote the development of new Internet media.

Industry trend

As a new form of media, online videos have made a huge and far-reaching impact on China's media, entertainment and Internet industries as well as on people's lifestyles.

Chinese audiences are spending more time watching videos online than on TV, according to a 2011 report released by Starcom MediaVest Group, one of the world's largest brand communications companies.

As a result, producers of TV dramas and shows are seeking to maximize their income from online broadcasting of their programs.

The Voice of China , a prime-time talent show, quickly became a huge success after its premiere on Zhejiang Satellite TV on July 13, 2012, with many watching the show online.

The right to broadcast the first season of The Voice of China online was granted to any video websites that wanted it, and as a result, the show enjoyed a broad viewership, said Tian Ming, CEO of Star China Media, the show's producer. However, Tian said that the business model was unsuccessful and only brought in about 10 million yuan ($1.65 million) in revenue.

To rectify this, the company adopted a new business model for the second season of the show, which was to sell the exclusive broadcasting right to only one website.

Last year, Sohu.com's video site spent 100 million yuan ($16.5 million) buying the exclusive online broadcasting right of the second season of The Voice of China. It's reported that videos of the entire season were played more than 2 billion times on the website, making 200 million yuan ($33 million) for the company.

In November 2013, Tencent Inc., currently China's largest Internet company by revenue, announced that with "generous spending," it had won the exclusive right to broadcast the third season of The Voice of China.

The generous price paid was later revealed to be 250 million yuan ($41.3 million).

In future, the show will not simply be put online, rather, netizens will be able to participate in the program interactively through the company's video site and their microblogs and mobile apps, said Jin Lei, the talent show's general director.

In addition to purchasing broadcasting rights for traditional TV programs, video websites have begun to produce their own.

At the Fifth China Online Audio and Video Industry Forum, it was disclosed that in 2012, video websites spent about 65 million yuan ($10.74 million) in total on producing original programs, which generated 50 million yuan ($8.26 million) in advertisement income for them. In 2014, the two figures are expected to top 100 million yuan ($16.52 million) and 180 million yuan ($29.74 million), respectively.

This year, Sohu.com plans to double its investment in producing its own video programs, and aims to quadruple the volume of traffic generated by its productions.

The decision was made because production costs of original programs are low and such programs have higher input-to-output ratios, said Charles Zhang, Board Chairman of Sohu.com.

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