Why its Difficult to Make Money from Chinese Users – Online Video Example

Everyone in the TMT industry likes to compare Chinese companies to its American counterparts and leaders, like China’s Google is Baidu, China’s Facebook is RenRen, China’s Twitter is Sina Weibo etc. In the online video market, China’s Youtube is often regarded as Youku.

But I investigated a bit further to see how Chinese video sites really compare with an American online video giant – Hulu. Hulu is a very popular online subscription service offering ad-supported on demand streaming video of TV shows, movies, webisodes and other new media, trailers, clips, and behind-the-scenes footage from NBC, Fox, ABC, and many other networks and studios.

I compared revenue and number of unique monthly active users across 3 Chinese video sites – Youku, Qiyi and Xunlei versus America’s Hulu. The clearest observation is that all the Chinese sites have clearly more users but vastly lower revenues compared to Hulu with only 30 million unique monthly active users but a much higher revenue base of US$240m.

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