PREMIUM: Victor Koo, the CEO of Youku Tudou, China\u2019s number one online video service, shares with TV AsiaPac his views on trends in internet video, interactive content and what\u2019s in store for the future.<\/p>\n
TV ASIAPAC: <\/strong>What trends are you seeing in how your users access Youku and Tudou? TV ASIAPAC:<\/strong> The big U.S. OTT platforms like Netflix are focusing most of their original efforts on scripted productions. You\u2019re commissioning drama and movies, but also a lot of original entertainment and reality shows that many could argue are best suited for live viewing. Why are those kinds of series working for you? TV ASIAPAC: <\/strong>I recall you also aired some World Cup games. How does sports fit into your programming mix? TV ASIAPAC: <\/strong>How do you see Youku Tudou\u2019s positioning in the broader Chinese OTT landscape? TV ASIAPAC: <\/strong>Tell us about the regulatory environment you operate in and the limitations on the content you can deliver. TV ASIAPAC:<\/strong> You\u2019ve been working in the Chinese online video space since its inception. How do you see the landscape evolving over the next few years? TV ASIAPAC: <\/strong>Do you think the linear channels you and I grew up on will still be around in five years time? TV ASIAPAC: <\/strong>What does innovation mean for you in the context of online video? Given how quickly things change, how do you stay ahead of the technology curve? TV ASIAPAC: <\/strong>You mentioned innovation in content production. How are you doing that within your own original production efforts? TV ASIAPAC:<\/strong>\u00a0Tell us about the revenue models you\u2019re exploring outside of advertising. Also, we have games, especially on the mobile side, that we market very similarly to movies. That\u2019s another area [we\u2019re expanding in]. As we\u2019re developing more and more original content, we have IP we can leverage into new mobile games [we can sell] as well.<\/p>\n TV ASIAPAC: <\/strong>How responsive have brands been to shifting their dollars online? TV ASIAPAC: <\/strong>How important are recommendation engines and analytics for Yukou Tudou? Victor Koo, the CEO of Youku Tudou, China\u2019s number one online video service, shares with TV AsiaPac his views on trends in internet video, interactive content and what lies ahead.<\/p>\n","protected":false},"author":290,"featured_media":3723,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[67],"tags":[],"class_list":["post-3368","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-interviews"],"yoast_head":"\n
\nKOO: <\/strong>Mobile is now the primary screen. Before 2012, internet video was mostly consumed on PCs. In 2013, 2014 that changed dramatically. Now more than 60 percent of our consumption is from the mobile screen. Internet-enabled TV is the emerging screen. We also address the big screen\u2014we\u2019re starting to jointly produce movies. We\u2019ve produced 11 movies with Chinese film companies.<\/p>\n
\nKOO: <\/strong>Most people are used to watching film and [scripted] television content when they go to Netflix. When people come to Youku and Tudou, they\u2019ve had a history of watching variety shows. We started producing our own pretty early\u2014in 2009 Youku started launching interactive live concerts, and Tudou did an interactive variety show. It\u2019s going back to the idea of multiscreen interaction\u2014thinking about these screens and how you create an experience that\u2019s tailored to the multiscreen age. Even thinking about interactive features. We’re creating shows that enable users to deal with e-commerce, for example. Those kinds of elements are incorporated into our thinking as we develop original content.<\/p>\n
\nKOO: <\/strong>We see sports as a current event or a news event. People come to Youku wanting to find out what\u2019s best, what\u2019s new, what\u2019s fresh. We\u2019re the number one video website in China. Users want to see what\u2019s grabbing people\u2019s attention, whether it\u2019s a movie or a variety show or the World Cup.<\/p>\n
\nKOO: <\/strong>The industry has really consolidated. If you look at the U.S., there are a couple of video players but their models are different from each other\u2014whether it\u2019s YouTube, Netflix, Amazon or Hulu. In China, there\u2019s a very small set of players, but the models do cross over. What\u2019s unique about Youku Tudou is we deliver web native content, whether that\u2019s UGC or PGC [partner-generated content] or original content. We have a very significant advantage over our competitors, which are focused on syndicated content. Their models tend to be more like Hulu\u2019s, where our model is more like a combination of YouTube and Netflix.<\/p>\n
\nKOO: <\/strong>Like all companies, you have to abide by the local government regulations. It is a part of doing business in China. Since the very beginning, as we started as a video-sharing platform, we\u2019ve had a lot of content monitoring and systems and procedures in place, whether through technology or by a team of people. It\u2019s an area that makes us partner and advertiser friendly as well. We see it as an important part of our business.<\/p>\n
\nKOO:<\/strong> I would say the online video space in China started around 2005, 2006. Over the last nine years the way that video content is consumed, distributed and marketed has fundamentally changed. How content is created, as well as monetized, is continuing to change. We\u2019re still in the innovation cycle of that. That\u2019s not to say that distribution and marketing innovation has stopped. We\u2019re now a multiscreen company\u2014we went from one screen to five screens [PC, mobile, tablet, TV set, theatrical]. That innovation, moving from being a single-screen video platform to being a multiscreen video platform, really happened in the last two or three years. As we go forward the next few years, I think these five will still be the primary screens. In distribution we\u2019ve seen a fundamental seismic shift already. But the way content is created, we\u2019ve done a lot of innovating over the last six years and we\u2019re still seeing a lot of innovation happening.<\/p>\n
\nKOO: <\/strong>People will still want to have the browse, sit-back-on-the-couch experience. But people are looking to different screens to serve different needs.<\/p>\n
\nKOO: <\/strong>Content distribution, production and marketing are all evolving. In all areas related to content, innovation is happening on all fronts because of technological changes, because of behavioral changes, because of how people are consuming content today. In the U.S., where internet penetration is so high, if you look at the people watching Netflix and the people watching HBO [the linear channel], the demographics aren\u2019t that different. In China, if you look at the demographic watching Youku Tudou and contrast that with the demo watching terrestrial television\u2014we don’t have an HBO equivalent\u2014it\u2019s actually dramatically different. Internet penetration in China right now is maybe 600 million people out of 1.3 billion. The demo watching television is broadly 5 to 75; for the internet we\u2019re talking about 15 to 35, 15 to 40. The mobile screen has expanded that demographic group somewhat, but still it\u2019s a much more targeted audience and they\u2019re used to multiscreen\u00a0internet technology and the way they consume content is entirely different. So the way you create and produce content to address that new market segmentation should be very different. That\u2019s why innovation in terms of content production may be happening faster in China than in the U.S.<\/p>\n
\nKOO: <\/strong>Youku Tudou started working on original content back in 2009\u2014before our international counterparts started doing it. It started more organically because we have video sharing and UGC [user-generated content] roots. Some of these users [creating content] are like independent directors, so we started working with them. It was web native content, targeted towards the urban youth population, first on the PC screen and then the mobile screen. As our strategy evolves, we\u2019re moving more to bigger productions and even moving to the big screen. Some of our shows have actually [been acquired by] TV stations. So we\u2019ve gone from web native, smaller productions and progressed to larger and larger productions, addressing larger screens. But the core target audience is still the urban young; that hasn’t changed.<\/p>\n
\nKOO:<\/strong> Advertising is a sizeable market. On the consumer side, the subscription business has been growing very strongly. Partly it\u2019s because of the anti-piracy initiatives by the government. There were always two problems in trying to build a Netflix-type model in China: one was the payment issue and one was the piracy issue. What we\u2019re seeing is that payments via mobile have improved considerably. Piracy was quite a problem. It\u2019s not gone away, but I think there are efforts to address that now.<\/p>\n
\nKOO:<\/strong> Multiscreen video from a marketing and advertising standpoint is pretty mainstream now in China. Three or four years ago that wasn\u2019t the case. The whole industry on the advertising side started in 2008, 2009, and started taking off on 2010, 2011. Now whether it\u2019s multinational clients or domestic clients, people see it as an important part of the mix because it reaches an audience that other screens are not as good at reaching. Also, [we can provide] TV-like advertising spots and more innovative internet-based advertising campaigns. We do produce original content, so there\u2019s a lot of product placement and sponsorships. And, instead of just [providing] reach and frequency, there\u2019s also a lot of engagement and interactivity solutions that internet television platforms like Youku and Tudou can offer.<\/p>\n
\nKOO: <\/strong>The [benefits of] big data and cloud computing apply to users, marketers and our content partners. From the users\u2019 standpoint, we\u2019re pushing different kinds of content to your mobile phone or having different recommendations on your personal page. As our big data gets better, [we can do more] in terms of targeted advertising. One of the reasons movie companies like working with us is that we can provide a lot of consumer insight\u2014about the kinds of content our users watch, how to promote releases to a movie-going audience that is young and urban and internet savvy. [We can showcase] trailers, exclusive behind-the-scenes footage and related music videos to help drive audiences to the movie theaters. That\u2019s why we\u2019ve become a joint producer and a joint promoter of movies and have been very successful with it over the last few years.<\/p>\n","protected":false},"excerpt":{"rendered":"