Tag Archives: Youku

News Digest: January 12, 2012

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The following press releases and media reports about Chinese companies were carried on January 12. To view a full article or story, click on the link next to the headline.

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◙ Ping An May Sell Yihaodian Stake, Giving Control To Wal-Mart (NYSE: WMT) – Report (Chinese article)

◙ Dangdang (NYSE: DANG) Expects 20% Profit Margin on E-Books (English article)

◙ Youku (NYSE: YOKU) Signs Content Deal With Twentieth Century Fox (Nasdaq: NWSA) (PRNewswire)

◙ Motorola (NYSE: MMI), Lenovo (HKEx: 992) Sign On To First Intel-Powered Smartphones (English article)

◙ Taobao Mall Changes Name To Tianmao, Buys tianmao.com URL (Chinese article)

Regulator Eyes Online Video in Ad Crackdown 广电总局或限制视频网站广告

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Chinese regulators seem to have discovered a sudden fondness for the Internet, first saddling many social networking sites with cumbersome “real name” rules and now potentially setting their sights on the fast-rising video-sharing sector. I doubt these 2 initiatives are related, but they both do reflect a worrisome surge in China’s classic heavy-handed approach to fast-rising new industries, which often ends up stunting their development or even killing them outright. In this latest news, Chinese media are reporting that an official at SARFT, the agency that regulates TV, has hinted that tough new requirements limiting the amount of ads that TV stations can show during their programs may also soon be extended to video sharing sites. (English article) The new requirements would come just months after many of China’s leading video sites, including Youku (NYSE: YOKU), Sohu (Nasdaq: SOHU) and Tudou (Nasdaq: TUDO) have signed a series of landmark agreements to offer legally licensed content as they wean themselves from the pirated material that has historically been a mainstay on such sites. (previous post) Thus the new requirements, if they come, would almost look like punishment for this positive development, when instead encouragement should be offered. This new requirement would follow the higher-profile move in December when Beijing issued new rules requiring all social networking sites (SNS) to register users using only their real names. (previous post) That rule dealt a blow to Sina (Nasdaq: SINA), whose wildly popular Weibo microblogging service looks set to become the biggest victim of that new policy. Frankly speaking, I’m not even really sure how dependent the online video sites are on advertising for their revenue, as some of the movies and TV shows offered under these new licensing agreements are on a pay-per-view basis that would see users paying to watch content. But regardless of the current situation, advertising is clearly a potential revenue source as these companies work toward sustained profitability, and any move by regulators to put sharp new limits on this activity could seriously hamper the industry’s development.

Bottom line: Potential new rules limiting ads for online video sites could seriously hamper the industry’s development, hurting their chances for sustained long-term profitability.

Related postings 相关文章:

◙ Tudou, Youku: China’s New Piracy Police　　土豆和优酷：中国打击盗版的民间警察

◙ Jishi the Latest in Low-Key Media Listing Parade 吉视传媒加入中国媒体低调上市大军

◙ Tudou Surprises With Profit, Licensing Deal 土豆网意外扭亏为盈视频分享市场的好兆头

CITIC Securities, Koreans Challenge Western Giants 中信证券和韩国电视台挑战西方企业

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Two separate news bits out today show that Asian firms, in this case leading brokerage CITIC Securities (HKEx: 6030; Shanghai: 600030) and 3 Korean TV program makers, may pose an interesting challenge to Western names in lucrative developing new business areas in now taking shape in China. In the first of those bits, CITIC Securities announced it has just received regulatory approval to become a renminbi qualified foreign institutional investor (RQFII), a new program that allows financial services firms to raise Chinese yuan outside the country for re-investment in China stocks and other financial products. (company announcement) RQFII specifically targets a growing number of foreigners who want to invest in the yuan offshore as China moves to internationalize its currency, also known as the renminbi. To date, this offshore yuan business, mostly centered in Hong Kong, has been dominated by big foreign names like HSBC (HKEx: 5; London: HSBA), so it’s interesting to see a big Chinese name like CITIC Securities getting involved so quickly in the new RQFII scheme. Of course CITIC Securities will now have to convince foreign investors that it can get them better returns for their yuan than big foreign names that are also applying for RQFII status. But given its market-leading position in China and strong knowledge of Chinese markets, I would expect to see CITIC Securities become a top-tier player in this new and potentially lucrative area in the next 1-2 years. In the second news bit, PPLive, an IPO candidate and one of China’s top video sharing websites, has signed an exclusive deal to license all TV dramas from 3 Korean TV networks for the next 3 years. (English article) No financial details were given and I’ll admit I don’t know anything about the 3 Korean networks in this deal; but the amount of programming does look massive, involving 12,000 episodes of various TV series with 13,500 hours of programming. This deal is interesting in the light of a recent series of high-profile licensing deals between other video sharing sites like Youku (NYSE: YOKU) and Tudou (Nasdaq: TUDO) with major Hollywood studios, and shows that other Asian program makers, whose shows are popular among many Chinese, will also be competing to cash in on demand from these content-hungry Chinese video sites. Look for more such blockbuster deals from other Asian markets like Japan, Taiwan and Hong Kong in the months ahead.

Bottom line: New deals involving CITIC Securities in the offshore yuan business and Koreans in video licensing show Asian firms will win growing business in areas traditionally dominated by Westerners.

Related postings 相关文章:

◙ Video Makers On Cusp of Renaissance 视频制作商或迎来美好时代

◙ ICBC Discovers China’s Latest Low-Cost Export: Currency 工行将从非洲人民币结算业务中获益

◙ Foreign Banks in China: A Love Affair Ends 外资银行撤资与中国同行说再见

 

Xinhuanet IPO Sets Stage For Media Listings 新华网IPO或将开启媒体上市热潮

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There’s an interesting report in the media space that the Xinhua News Agency plans to publicly list its news web site — a development with hugely symbolic overtones that could foreshadow a long-awaited liberalization in this highly sensitive sector and portend a major new round of IPOs for big media firms. Foreign media are citing unnamed sources saying that Xinhua is planning a domestic listing for its news portal, Xinhuanet, in a deal that would see it raise around 1 billion yuan, or more than $150 million. (English article) The size of the offering is really of little or no significance since Xinhua, as the Communist Party’s main mouthpiece, already receives most of its funding from the government and is unlikely to need such funds. What’s much more important is that Xinhua is making this IPO at all, as ownership of the media, which has the power to influence public opinion, has been a highly sensitive matter in the past, even as most other sectors were allowed to make public offerings paving the way for private ownership. This move by Xinhua, if it really happens, would send an important signal to China’s other major media groups, including CCTV, Shanghai Media Group and other major players, that it’s ok for them to list some of their major assets, paving the way for an interesting new round of possibilities for investors with huge growth potential. Such a development would, in fact, extend a recent trend that has seen a growing number of movie and TV show makers, many of them owned by regional media companies, make a string of low-key public offerings as they hope to tap emerging demand from not only traditional TV stations, but also an fast-rising group of content-hungry video sharing websites like Youku (NYSE: YOKU), Tudou (Nasdaq: TUDO), Sohu (Nasdaq: SOHU) and PPLive. (previous post) Xinhua, as one of China’s oldest media, already sets the tone for the rest of the nation’s TV stations, newspapers and websites in terms of news coverage, and this latest move would indicate that public ownership of the media is ok, at least on domestic stock markets. The timing of a Xinhuanet listing is still unclear, meaning it could still be months or years away. But if and when such a listing occurs, look for many more to follow as a wide range of regional and local media groups clamor to raise funds to expand their national reach.

Bottom line: A pendiing IPO for Xinhua’s web portal could auger a flood of new domestic listings for big Chinese media firms, providing an interesting investment option with strong growth potential.

Related postings 相关文章:

◙ Jishi the Latest in Low-Key Media Listing Parade 吉视传媒加入中国媒体低调上市大军

◙ 2011: A Breakthrough Year in Copyright Protection 2011年：中国版权保护取得突破的一年

◙ Video Makers On Cusp of Renaissance 视频制作商或迎来美好时代

News Digest: December 24-27, 2011

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The following press releases and media reports about Chinese companies were carried on December 24-27. To view a full article or story, click on the link next to the headline.

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◙ Sina (Nasdaq: SINA) Weibo Accepts US$200 Mln Digital Sky Investment – Source (English article)

◙ Xinhua Website Planning $158 Million IPO: Sources (English article)

◙ Foxconn (Taipei: 2354) Solar-Module Entry May Cut Margins for Chinese Makers (English article)

◙ Sinopec (HKEx: 386) Completes Purchase of Canada’s Daylight Energy (Toronto: DAY) (English article)

◙ Xunlei to Sue Youku (NYSE: YOKU) for IPR Infringement (English article)

2011: A Breakthrough Year in Copyright Protection 2011年：中国版权保护取得突破的一年

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It seems quite appropriate that 2011 is ending with news that Internet search leader Baidu (Nasdaq: BIDU), which for years symbolized rampant disregard for copyrights on China’s unruly Internet, has been removed from a US list of “notorious markets” for piracy, capping a year that saw great progress in intellectual property protection. (English article) Baidu’s achievement after it signed a series of landmark licensing agreements with major music labels like Universal, Warner (NYSE: WMG) and Sony Music (Tokyo: 6758) in July as it launched a service selling legal copies of their music. (previous post) Baidu’s removal from the list was just the latest major advance in copyright protection, as China’s crowded field of online music and video sites all took new steps to secure exclusive content to set themselves apart from rivals in the competitive sector. The nation’s top 3 video sharing sites, Youku (NYSE: YOKU), Sohu video (Nasdaq: SOHU) and Tudou (NYSE: TUDO) all signed their first big licensing deals during the year to offer TV shows and films from the likes of Warner Brothers (NYSE: TWX) and Disney (NYSE: DIS). (previous post) Some domestic names like Huayi Brothers (Shenzhen: 300027) signed similar deals, as early signs emerged of a coming renaissance for domestic content makers, an increasing number of which are looking to domestic IPOs to fuel their growth. (previous post) In another interesting development just last week, Youku and Tudou filed a series of copyright infringement lawsuits against each other, showing that these companies themselves could emerge as a potent force to help police against future copyright violations. (previous post) Last but not least, many of the sites themselves are increasingly producing their own exclusive content, with Phoenix New Media (NYSE: FENG) and PPLive announcing such initiatives during the year, which should also help the programming industry’s development. (previous post) Of course, there is still much work to be done. Despite its launch of a legal music service, Baidu continues to operate its popular older music service where swapping of pirated songs is rampant. And while Baidu was removed from the “notorious” list, Alibaba’s Taobao, China’s e-commerce leader, remains on the list for the widespread sale of knock-off products on its site. Still, in all my years covering China tech and media, 2011 certainly looks like a year of major breakthroughs in copyright protection as Chinese firms finally wake up to the reality that piracy isn’t a very good long-term business model.

Bottom line: Baidu’s removal from a US piracy list reflects big progress in the anti-piracy battle in China in 2011, with the campaign likely to maintain momentum into 2012.

Related postings 相关文章:

◙ After Years, Baidu Does the Right Thing 百度多年来的一个正确之举

◙ Video Makers On Cusp of Renaissance 视频制作商或迎来美好时代

◙ Youku’s New Formula: Sponsored Programs 优酷“新配方”：赞助项目

Tudou, Youku: China’s New Piracy Police　　土豆和优酷：中国打击盗版的民间警察

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An entertaining tiff has broken out between China’s top 2 video sharing sites, with Tudou (Nasdaq: TUDO), the country’s second largest player, accusing top player Youku (NYSE: YOKU) of copyright violations, prompting Youku to counter with its own similar allegations. (Tudou lawsuit article; Youku lawsuit article) The series of actions are interesting less from a monetary perspective, but more because they show that China’s private sector may finally step in and become a much more effective policeman for protection of copyrights than Beijing has been, despite years of effort by the government to curb the problem. Let’s look at the actual news first, which saw Tudou complain to regulators that Youku ignored its repeated requests to take down episodes of a popular Taiwanese TV talk show that Tudou said it held the exclusive mainland Chinese rights for. Youku responded with its own accusations that Tudou was showing more than 60 TV programs which Youku holds the rights to. In addition to complaining to authorities, both companies are threatening legal action against each other. Of course, most people know China’s courts have proven an ineffectual avenue for resolving this kind of dispute, as decisions can take months or longer, and penalties are usually so small that they provide little or no deterrent effect. That said, the interesting thing here is that Youku and Tudou, as the industry’s top 2 players with big resources at their disposal, could potentially emerge as the kind of private sector policemen that China sorely needs to clamp down on piracy. For example, smaller Web firms that depend on trading of pirated movies and TV shows to bring traffic to their sites, might think twice if they are worried that big names like Youku, Tudou and Sohu (Nasdaq: SOHU) might take legal action against them or complain to regulators who have the power to shut them down. All of this can only be good news for the program makers themselves, like the big Hollywood studios and domestic names like Huayi Brothers (Shenzhen: 300027), which will be able to not only make bigger profits in China, but also be able to focus more on building their China distribution while leaving the business of clamping down on piracy to private sector players who also get hurt by copyright violators.

Bottom line: A spat between China’s top 2 video sites shows that such sites could emerge as a powerful private sector force to help stamp out video piracy in the country.

Related postings 相关文章:

◙ Sohu’s Blowout Earnings: IPO In Store for Video? 搜狐发喜报视频业务或上市

◙ Video Makers On Cusp of Renaissance 视频制作商或迎来美好时代

◙ Jishi the Latest in Low-Key Media Listing Parade 吉视传媒加入中国媒体低调上市大军

News Digest: December 17-19, 2011

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The following press releases and media reports about Chinese companies were carried on December 17-19. To view a full article or story, click on the link next to the headline.

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◙ Sina (Nasdaq: SINA) Announces New Rules on Microblogging by Beijing Municipal Government (PRNewswire)

◙ Alibaba’s $4 Billion Loan Takes Shape (English article)

◙ Spreadtrum Communications (Nasdaq: SPRD) Announces Share Repurchase Program (PRNewswire)

◙ Youku (NYSE: YOKU), Tudou (Nasdaq: TUDO) Trade Copyright Infringement Allegations (English article)

◙ HNA Group Completes $1.05 Billion Purchase of GE Container-Leasing Venture　（English article)

Video Makers On Cusp of Renaissance 视频制作商或迎来美好时代

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I’ll take a break now from all the Internet turmoil to take a look at an area that’s showing much more promise these days, namely the sector that makes video content for TV stations and increasingly Internet video sites. In fact, I’ve already talked about the big potential for this space on several occasions, following landmark licensing agreements this year between some of the major Hollywood studios and leading video sites operated by Youku (NYSE: YOKU), Tudou (Nasaq: TUDO) and Sohu.com (Nasdaq: SOHU). (previous post) But now the China Daily has published an article showing just how well the video production industry is doing, with prices for TV shows and movies soaring in the last 5 years. (English article) According to the article, individual episodes for popular TV shows can now fetch up to 1 million yuan each, or about $150,000,  compared with just several thousand yuan per episode just 5 years ago. The article cites a recent instance that shows how hot the market has become, with Sohu recently paying 30 million yuan for nearly 100 episodes of the hit TV series “New Princess Pearl”, or about 300,000 yuan per episode. As a veteran reporter on the China media scene, I remember the old days when TV show and movie makers complained that it was impossible to earn any money in the Chinese market, where individual media giants held monopolies in all major cities and thus could demand ridiculously low prices from programmers because they had no competitors. What a difference 5 years makes. Of course, for the investor the big issue is that most of the programmers aren’t publicly traded, though a handful like Huayi Brothers (Shenzhen: 300027) are well positioned to capitalize on the boom. I expect we’ll see a lot more of these companies go public in the near future as business soars. But that said, the popular saying “what goes up must come down” is probably true here also. Put simply, this spending frenzy by the video companies is probably unsustainable over the longer term, simply because there aren’t enough advertising dollars to support such rapid growth and it will also take time for Chinese consumers to gradually get used to the idea of paying for such online content.

Bottom line: Booming demand for video content is likely to spark a renaissance for movie and TV program makers, though a correction for the sector is also likely in the next 2-3 years.

Related postings 相关文章:

◙ Sohu’s Blowout Earnings: IPO In Store for Video? 搜狐发喜报视频业务或上市

◙ Tudou Surprises With Profit, Licensing Deal 土豆网意外扭亏为盈视频分享市场的好兆头

◙ PPLive, Phoenix Video Initiatives Offer News Alternative 凤凰新媒体与PPLive的新尝试

Search Wars Heat Up With Latest Anti-Baidu Moves 中国网络搜索战升温

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The latest mass movement against online search leader Baidu (Nasdaq: BIDU) looks set to sow new chaos in China’s online community, once again underscoring that Beijing needs to step in and bring some order to the marketplace or risk major disruptions. Chinese media are reporting that 3 major web firms, Tencent (HKEx: 700), Qihoo 360 (NYSE: QIHU) and Youku (NYSE: YOKU), have all announced new search engine initiatives to rival Baidu, which dominates the market with nearly 80 percent share. (Chinese article) Tencent’s search engine, Soso, is actually already 5 years old, so that part of the story isn’t really news. (previous post) But what’s alarming is that the report says Youku, China’s leading online video sharing site, is launching its initiative after noticing that the number of Baidu search results directing users to its site has dropped sharply since Baidu launched its own video sharing service, called Qiyi. In fact, this is just the latest example of a frequent Baidu practice, namely tampering with its search results to make its advertisers and its own products appear at or near the top of its search results even when other web pages would rank higher under more objective conditions. This latest conflict pitting Baidu against 3 other major web firms comes just weeks after another similar mass protest saw major online retailers including Dangdang (NYSE: DANG) and 360Buy block their web pages from searches by Alibaba’s Etao search engine. (previous post) These kind of turf wars between major online players have the potential to create real chaos on the Chinese Internet by undermining the credibility of search engines that are often the first place web surfers go to find what they want on the vast worldwide web. I’m usually opposed to any attempts by Beijing to step in and regulate the online world, but this really seems like one exception where the government should step in and act as impartial arbitrator to set up some basic ground rules that everyone can agree upon to end these turf wars. Otherwise, China’s online world could be looking at 1-2 years of major disruptions until the building brouhaha gets resolved by market forces.

Bottom line: A new uprising by 3 major web firms against Baidu marks the latest unrest in China’s online search market, which needs Beijing to step in and act as impartial arbitrator.

Related postings 相关文章:

◙ Alibaba’s Etao Faces New Merchant Revolt

◙ Tencent Search: Baidu Beware? 腾讯搜搜成功关键依赖创新

Parade of China Money-Losers Report to Wall Street 多家中国企业亏损凸显市场竞争激烈

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Online video leader Youku (NYSE: YOKU), online retailer Dangdang (NYSE: DANG) and education services firm Xueda (NYSE: XUE) have all reported net losses in their latest results, underscoring the fact that Western investors don’t seem to care all that much about profits when it comes to Chinese firms, especially Internet companies. Each of these firms has a different story to tell, although frankly speaking all 3 look disappointing to me and show movement in the wrong direction. Let’s start with Youku, which reported a third-quarter loss of 47 million yuan, narrowing 11 percent from a year ago but ballooning from the second quarter’s 28 million yuan loss. (company announcement) The company also forecast a slowdown in fourth-quarter revenue growth to 90-100 percent from 130 percent in the third quarter. None of these trends looks particularly positive, especially after chief rival and much smaller Tudou (Nasdaq: TUDO) surprised the market earlier this week by becoming profitable in the third quarter. (previous post) As to Dangdang, the situation looks even more discouraging, as the company faces what seems like daily price wars with the likes of 360Buy and Wal-Mart’s (NYSE: WMT) Yihaodian in the super-competitive e-commerce space. Dangdang reported its third-quarter net loss ballooned to 73 million yuan, or more than double the 33 million yuan loss from a year earlier, as it tries to expand beyond its original model as a book seller to the ultra-competitive general merchandise business. (company announcement; Chinese article) Lastly there’s Xueda, which seems unable to get out of the loss column despite being in the high-growth education services area. It reported a $6.3 million loss for the third quarter, more than double the year-ago loss of $2.4 million, again reflecting tough competition in the market but also in sharp contrast to steady profits reported by industry leader New Oriental Education. (previous post) This parade of losses certainly is still more the exception than the rule among US-listed Chinese companies. But it also reflects a worrisome trend that competition for many has become way too intense, and consolidation in many areas is sorely needed.

Bottom line: Money-losing results from Youku, Dangdang and Xueda reflect stiff competition in their respective spaces, with no immediate relief in sight.

Related postings 相关文章:

◙ Tudou Surprises With Profit, Licensing Deal 土豆网意外扭亏为盈视频分享市场的好兆头

◙ Price Wars Beat Up Online Retailers 网上零售商引爆价格战

◙ New Oriental Results: Slowing Education Growth Story 新东方发表最新财报 中国教育服务增长减速？