Ku6: Delisting isn’t an Option for Us

Ku6 has disappeared from public life for quite a while ever since the service was acquired by Shanda and pivoted to UGC (user-generated content) model. The company generated a revenue which is less than 4% of Youku; it seems that it’s very hard for the video site to win back public attention again. That said, Ku6’s CEO, Shi Yu lately argued that Ku6 had its own way of growing and will gain its power again soon. He also stressed that Ku6 won’t be delisting from Nasdaq.

 Shi said that a video site’s performance could be measured against by three metrics, including UV (unique visitors), income and profitability. While Ku6 is more focused on UV and profitability.

Ku6 adopted the UGC approach and shed off brand advertising business in 2011. Currently, it enjoys 250 million UV per month.

After shedding off brand advertising, the site loses RMB 120 million in revenue per year. Ku6’s mindset is, brand advertising requires costly copyrighted content to support, which isn’t the right choice for everyone. Maybe it’s good for Youku-Tudou or iQiyi who have abundant cash under their belts, but not for Ku6.

Ku6 chose to build a performance-based ad system, they believe that’s the future of Chinese Internet advertising trade. What Ku6 needs now, is time. It got started building the system from last September on, and was still in the process of accumulating data. They also need to educate the market and advertisers. It’s still a long way ahead for the once glorious service.

When being asked about the possibility of delisting Ku6, Shi said that though Shanda Group privatized some subsidiaries, it’s not an option for Ku6. Indeed, Ku6’s stock was traded at low value, but there’re ways it could use to improve the situation, like ramping up business and so on.