Alibaba’s Weidong Yang on China’s Online Video Sector

Weidong Yang, president of China’s Youku and Alibaba Digital Media & Entertainment Group, talked about how original series are driving the Chinese online video platform’s paid subscriber base in his MIPTV Media Mastermind keynote, which was followed by a Q&A with World Screen’s Anna Carugati.

There are 579 million online video users in China, Yang noted, 8 percent of the global base. “This huge number of users asks the industry for many more new ideas that need great imagination. It creates a fantastic opportunity for our industry. And more and more users are willing to pay for high-quality content.”

Paid subscription revenues doubled from 2016 to 2017, Yang said. He also noted that each Chinese internet user spends an average of 100 minutes watching online video daily. “This accounts for most of their leisure time.”

These audiences increasingly want content that is tailor-made to their interests, Yang explained.

“In today’s ever-changing world, it’s difficult to know what the audience of tomorrow would like. We cannot simply just use the experience from the past to predict. Successful models from the past are not necessarily going to be popular in the future. As such, we need insights of every vertical consumer group. In order to capture their attention, we need to tailor our shows to surpass their expectations, use new visual aesthetics and adopt new ways of expressing the content.”

As an example, Youku created a talent format, Street Dance of China. “We partnered with professional international production teams to not only create a new viewing experience but also create a phenomenon for viewers who shared similar cultures.”

Yang stressed the importance of personalized content and recommendation systems to help audiences find what they want to watch. “If they can’t find the content quickly, they will give up, move on and leave our site. AI and data have bridged the gap between users and their contents. They help us to define consumers, identify their needs and guide content creation. Empowered by AI and data, we can analyze the consumer and predict their behavioral tendencies. We call it Hollywood meets Silicon Valley. We need to innovate in our story creation and set up new models to further define those vertical categories while raising content quality, including the visual experience, storytelling and format quality.”

Yang noted that over the last two years in particular, Chinese drama has seen a significant evolution. He pointed to Day and Night, which Netflix picked up for its footprint. Original dramas have helped Youku drive its paid member subscription base. “Serial drama is still the major content genre that drives the growth of paid subscriptions. With Alibaba’s strong support, the growth rate of paid member subscriptions on Youku is the fastest one in this industry.”

Drama series drive higher user loyalty and consumption time, Yang said. Users are eager for faster-paced storytelling, engaging plots and visual quality that is similar to feature films, he added. “American drama series may not work as well for the Chinese consumers,” he noted.

Variety shows are also important, Yang said. “They play a very important role in content innovation. They can represent the brand image of an online streaming platform. Chinese online variety shows are now becoming an innovation driver for the variety show industry,” he said.

Imported formats have been part of the mix at Youku, with Yang citing the upcoming launch of a Chinese version of Saturday Night Live.

“We look forward to working with more potential partners in the area of content production, models and format innovation. Together we will bring a strong and bright future for all of us.”

Yang then sat down with World Screen’s group editorial director, Anna Carugati, for an on-stage Q&A. He talked about the highly competitive nature of the online video market in China, where ten major players five years ago has fallen to three today: Youku, Tencent and iQiyi. Carugati also asked him about Youku’s local programming strategy, which began ten years ago with user-generated content and has since evolved into original high-quality fare. “Some of the online drama series, the quality has surpassed TV drama in China. More and more original drama will be of international quality.”

Youku is also investing in high-quality variety shows—Street Dance of China saw the platform shell out RMB 300 million. “We will also put more money into animation.”

On Youku’s international requirements, Yang said, “We need drama series and variety show formats and also animation. The international production quality is still more advanced than our local productions. We will catch up, but the global major players can help us to improve our production quality through cooperation. We are starting to explore the possibility of co-producing variety shows, drama series and animation.”