Video Site Ku6 Finally Finds its Way of Video Sharing

Since being acquired by Shanda in 2009, Ku6 had gone through a long and bumpy ride. At first it lost its focus and branched out too much, and then left the founder Li Shanyou. Earlier last year, the new CEO Shi Yu took over the site and had it revamped. According to a recent interview of Shi, the company finally comes up with a clear and determined goal, that Ku6 is a UGC powered video sharing community.

It’s earnings report of 12Q1 showed a revenue of $ 4.68 million, up 5.9% quarter-on-quarter. And the loss was $1.79million, down 54.6% qoq or 83.5% yoy, which is the lowest since its IPO in 2010.

Shi said in an interview that with the transformation into a UGC-centric model, Ku6 has stopped buying costly quality contents and a large chunk of its expenditure now only goes to personnel and bandwidth. One reason why loss is narrowed. “At first we did lose some users when transition begins, but later the number gradually grew back.” The latest data by Ku6 revealed the site got 280 million unique visitors per month and 200,000 daily uploaded videos.

Rumor once had it that the former CEO, Li Shanyou left for disagreements with Shanda over Ku6’s positioning. Ku6 used to be a long-video player and Li was confident of this positioning. However, when more players were joining this war and the content costs were rising rapidly, Shanda did not want to invest into the abyss.

Now as Ku6 is leaning towards a Chinese Youtube, its very first task is to gain back the user stickiness without long videos. Ku6 has been building up a sharing model, and by now around 800 video contributors have signed up with the site in ads revenue sharing. Furthermore, a new product called “New Ku6” has been released with social features, which is supposed to be more interactive and fun.

Hulu and Youtube’s business models both are based on ads, but Hulu obviously attracts more advertisers. This is also why Youtube has the traffic, but never a good revenue report. Ku6’s transition from Hulu to Youtube seems a wise choice for itself by now. But for the long-term, it’s still hard to say as all main stream Chinese video sites are equipped with premium contents which is more favored by both advertisers and views.

Oh, btw, the new homepage of Ku6 (pictured below) looks exactly like YouTube…