Chinese video-streaming company Youku Tudou Inc. (ADR) (NYSE:YOKU) is shifting its focus to developing original content as one of the ways of developing homegrown programming. During an interview on Bloomberg, CEO, Victor Youku, reiterated that the company is seeking to diversify its content as one of the ways of attracting more users while also complying with government regulations.
Ever since Youku Tudou Inc. (ADR) (NYSE:YOKU) went public it has been marred with losses reaching highs of $290 million, but the CEO remains confident about the company’s prospects. The spread of 4G networks in mobile devices according to the CEO is expected to have a massive impact on the company’s business operations in terms of more users.
“We are scaling at 500 million users and as 4G approaches us on the mobile side, I think that is just going to get bigger. On the content side we are also diversifying especially with original content as well as our whole content eco-system,” said Mr. Youku.
Focusing on original content according to the CEO will help Youku in managing its cost structure in the years to come. Youku Tudou Inc. (ADR) (NYSE:YOKU) has not had the best of runs in the market this year with the stock currently down by 38% on a year to date basis. The CEO attributes the drop to the company’s transition from PC to mobile. Youku is pursuing more content as it tries to fend off competition from other online video companies in a market that could grow to highs of $6.5 billion as of 2017.
“The past, especially for 2013 the key focus was really getting from the PC to the mobile transition, and for us from the users stand-point we are now the number 3 app out of the all the different apps in China. That shows that we have made a very-very solid progress on the mobile front,” said Mr. Youku.
Youku Tudou is already reaping benefits of mobile monetization which as of 2013 contributed a mere 3% of the company’s total revenue, but now contributes about 30%. Youku Tudou Inc. (ADR) (NYSE:YOKU) is pursuing original content in the wake of the Chinese Government requiring content providers to seek approvals for overseas content before streaming.
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