Youku Tudou Inc. (YOKU), China’s largest online video company, says original programming and a push into mobile content will help the company as it seeks to post its first profit since a 2010 initial public offering.
Viewership on mobile applications for smartphones and tablets like Apple Inc.’s iPad was 50 percent higher this month than at the end of last year, Victor Koo, chairman and chief executive of Youku Tudou, said in an interview in Beijing on April 27. Youku bought rival Tudou Holdings Ltd. last year to reduce costs for content and bandwidth.
Youku Tudou, which hasn’t been profitable since it listed on the New York Stock Exchange, faces growing competition in China’s online video market. Baidu Inc. (BIDU) has expanded its video service with an acquisition as it seeks a greater share of advertising revenue that’s projected to rise to 16.2 billion yuan in 2014 from 1.36 billion yuan in 2009, according to Shanghai-based iResearch.
“Online video advertisement is growing very fast, but not fast enough to support exciting profits,” said Ma Yuan, an analyst at Bocom International Holdings Co. in Beijing.
Youku Tudou’s net loss more than doubled to 424 million yuan ($69 million) in 2012 from 172 million yuan a year earlier. The Beijing-based company is forecast to lose 419 million yuan this year, according to the average of eight analyst estimates compiled by Bloomberg.
Youku Tudou held about 76 percent of the online video market in 2012 based on monthly average unique visitors,
While Koo said the company is on a “clear path to profitability,” he declined to project when that will happen.
“The losses are narrowing on a sequential basis,” Koo said. “We are still in a growth investment mode, especially with mobile and original content. The good thing is our revenue is also growing healthily.”
Mobile traffic is increasing “very, very strongly” with 150 million daily video views at the start of this month c