China Online Video Roundup: Tencent, Advertising Money, iQiyi

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Tencent Video Business Attracting Big Money:  Tencent, the Chinese Internet conglomerate’s financial statement of last Q4 showed that its video business has attracted big advertising money with a 70% rise quarter-over-quarter. James Mitchell, Chief Strategy Officer and SEVP of Tencent said that Tencent was very happy with its video service as it was picking up with nice qoq growth. He went on to explain that a) different players have different strength in this sector, b) Tencent Video enjoys traffic routed from the company’s other platforms, c) the company has large-scale infrastructure, and d) they maintained good connections with content providers.

 

Youku-Tudou to Announce New Company Structure in Q3: Yes, the Youku-Tudou acquisition took many by surprise, but now it’s time to get the right thing done, given the new company will not only have a combined market share of more than 40% – makes it the No. 1 in China’s online video sector – but will also have two sets of company structure. Victor Koo, founder and CEO of Youku said that Tudou will remain independent operation and there’s no downsizing after the merger. But still, the two need a consolidation to bring down operational cost as well as achieve more synergy between them. As to this, Wei Ming, Youku SVP said that Youku-Tudou will announce the new company structure in the third quarter of this year. There’ll be no major human resource related restructure before that time mark, according to Wei.

 

 iQiyi Signed up Productions for Original Content: iQiyi, the video subsidiary of Baidu reportedly signed up a hordes of production companies for their original content in wake of its effort in last year to produce iQiyi branded content, a move to reduce the company’s reliance on content providers and to grab more money via advertising.

After the UGC and quality content fought, now many video sites like Youku, Tudou, iQiyi and Sohu which under cost pressure are looking to self-produced content to lower cost and ramp up revenue. The results? Mixed.