PPTV, an on-demand and live streaming service, plans to make a profit in the fourth quarter this year, said its CEO, Vincent Tao. And they are “actively” preparing for an IPO, waiting for markets to pick up. He also estimated that consolidations, acquisitions or investments would possibly happen in video industry in the second half of this year.

The company briefly broke even in 2010. In 2011 it made 121 million yuan in advertising revenue, about one third of Tudou’s, according to a report released by Shanghai Administration for Industry and Commerce.

In January 2011 the company received USD 250 million of investment, at a value of USD 700 million, from Softbank who took a 35% stake, with its CEO sitting on PPTV’s board.

PPTV was developed by a college dropout, Yao Xin. Ten years ago Yao built a website for watching live World Cup. In 2009, the company introduced Vincent Tao, former Microsoft executive, to be CEO.

Now PPTV has live sports streams to differentiate it from other video services and grab TV viewers. The site obtained exclusive rights for live streaming sports events Chinese audience like, such as soccer games.

30 million Chinese users watched the UEFA EURO 2012 final on PPTV, as disclosed by the company. The average viewership during UEFA EURO 2012 was 40% of that of CCTV-5, one of the most watched sports TV channels in China, according to CTR, a TV viewership research organization. Even better, PPTV found the return from it were three times of the investment.

After the crazy competitions, Chinese video sites shifted focuses to vertical areas or producing original content. PPTV finally landed on sports and variety shows from Asian countries. Anyhow, sports streams have been its signature dishes, as Vincent Tao put it, since the very beginning.

In 2011, after having licensed major soccer games and other sports events, PPTV hired a team of commentators, trying to build professional sports media. Other players also know how important sports as a category to media. Sina and Tencent, two old news portals, are catching up with video content in sports. They already have had professional sports commentators and don’t need to worry about budget. Other video sites, iQiyi, LeTV and the like, also tapped into it. It’s hard to know whether the licensing prices will soar as a result of the competition. PPTV spends tens of millions yuan of licensing fees a year.

Advertising can hardly help PPTV turn a profit, but the company also explores other sports-related business opportunities. As online sports media are doing business with sports betting sites, PPTV also gains a considerable revenue from it, according to Zhou Liang, a director of PPTV. Paid service is also in consideration that PPTV will possibly try to charge high-end users for sports such as lob, NFL and small games sports gamblers would like to watch. Zhou also disclosed that they were in talks with licensed merchandise suppliers to open an online mall within PPTV.

Tracey Xiang is Beijing, China-based tech writer. Reach her at traceyxiang@gmail.com

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