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Youku and Tudou Post Impressive Quarterly Results

For many Chinese, streaming video online has become the primary method for watching movies and shows, given what many would describe as a limited set of options on state-owned television. Traditional methods of watching shows are gradually being replaced by new technology and by companies like Youku and Tudou, whose merger a few months ago was a hot topic. This news — along with the announcement last month that Qiyi, Tencent, and Sohu are beginning to collaborate on IP purchases — has shown that the market is gradually being consolidated.

For Youku and Tudou, it looks like their merger is finally beginning to pay off.

Today the two companies announced their first quarter results, and earnings indicate that Tudou has seem some impressive revenue increases. Specifically, they saw a 76.7% increase over last year’s results, a nice chunk of about 140.3 million RMB.  Additionally, their net loss was relatively tame at 134.5 million RMB, which is vastly better than last year’s loss of 336 million.

Regardless, not all is glittering and golden in the kingdom of streaming video, as Youku has seen its revenue growth slow over the past four quarters. Also, given that the online video market is still in its infancy, and coupled with the observation that costs have rapidly increased – mostly related to copyright purchases – Sohu, Tencent, and Qiyi may soon be a force to be reckoned with.

According to the report, content costs this year reached 140 million RMB for Youku and 90.5 million RMB for Tudou, which was 52% and 64.6% of their respective net revenues. This compares with 28% and 30.2% last year.

That’s a pretty impressive change.

Source: Sina Tech – originally source from 21st Century Business Herald

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