Video News Roundup: Layoff, Ads Revenue and LeTV.com

Written by Tangos on November 6, 2008
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In last two weeks, there are quite some rumors or news on China’s video sites, most of them are related to layoff. 6.cn, a video sharing site backed by Ceyuan Ventures, announced that it to cut its workforce from over 200 to about 60. UUSee, a p2p video streaming site backed by Sequoia Capital, also confirmed its recent layoff rumor. There are more layoff rumors about Tudou and PPLive. But Tudou already denied it, and said it has no layoff plan.

Even these video sites backed by big amount of capital investment of venture capitalist are experiencing hard time and need to cut cost, it is not surprised to find out that a large percentage of China’s over 200 video sharing sites have already gone into dead pool.

But to cut cost is one thing, another more important thing is to generate more revenues. According to a report on Sina, Gary Wang, CEO of Tudou, quoted data by Zed Digital, which shows that the revenue of Tudou on first half of 2008 was RMB 11.3 million, while revenue of Youku, its biggest competitor, was RMB5.5 million. But Youku responded that many ads on Youku are ads embed on videos, which is hard for third-party ads monitoring service to track. Therefore, the data of Youku’s revenue is not correct. On the contrary, based on traffic, Youku thought its revenue would be three times of Tudou.

No matter whose revenue is bigger, if the revenue need to support the high band width cost, they all have to increase revenue substantially.

On recent announced Deloitte Technology Fast 50 China, the third place went to LeTV.com, a video-on-demand service provider, which enjoyed 8,331% three-year average revenue growth. LeTV.com will charge users a monthly fee of about RMB 30 for watching movies or TV dramas online. Actually its model has nothing new, but it is said that LeTV is profitable already. ShenZhen Capital Group, with another two investors, has invested in RMB50 million into LeTV in July 2008.

2 Responses to “Video News Roundup: Layoff, Ads Revenue and LeTV.com”

  1. China Business News on November 7th, 2008 10:18 pm

    Here is an excellent interview with with one of the cofounders of tudou.com. Lots of good stuff about where tudou is headed.
    http://thechinaperspective.com/articles/entertainingthemassesthefutureofvideosharingandmobilegaminginchina4935/index.html

  2. scott on November 11th, 2008 3:23 pm

    At least the “mine’s bigger than yours” debate between Youku and Tudou is entertaining! What the hell were 200 people doing at 6.cn?!?!?!?

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