Yang Weidong, president of China’s Alibaba Digital Media & Entertainment Group and its streaming service Youku, underscored the importance of producing more original content for Youku, and the need to grow its subscription revenue during a keynote speech on Monday at TV market and conference MipTV in Cannes, France.
The Chinese streaming market is huge, with around 579 million online video users, 8% of the global market, Yang said, but it is intensely competitive, with three players, Youku, Tencent and iQIYI, dominating the market. Innovation was key to growing Youku’s subscriber base with users demanding “new ideas” delivered with “great imagination.” “It creates a fantastic opportunity for our industry. More and more users are willing to pay for high-quality content,” he said.
Yang said each Chinese internet user spent on average 100 minutes a day watching online video and paid subscription revenues in China rose 100% last year on the previous year.
He said that rather than seeking a mass audience Youku sought to target particular groups using a combination of data collection and artificial intelligence, an approach he summarized as Hollywood meets Silicon Valley. Accurate search and personalized recommendation tools for content was key. “If they cannot find their content quickly they’ll give up, move on and leave our site,” he said. “AI and data can bridge the gap between users and content. They help us to define consumers, identify their needs and guide content creation and distribution.”
He championed a personalized approach to production. “Different groups consume different content and they want to watch tailor-made content that matches their tastes and interests,” he said. “In order to capture their attention we need to tailor our shows to surpass their expectations through new visual esthetics and by adopting new [forms of expression].” Sixty percent of Youku’s users are women and the median age is 25, so it appeals to a young, mainly female audience, he said.
In recent years, Youku has moved into the production of original shows like “Street Dance of China,” an urban dance competition show, and “Day and Night,” a gritty detective drama that was acquired by Netflix worldwide last year.
In order to drive its growth in original content the company is looking to co-produce with international companies, as it intends to do through its recently announced deal with Endemol Shine for unscripted shows.
However, he saw drama series as being the main means by which it would drive streaming subscriptions. This would be done by focusing on “more complicated story lines,” fast-paced programming, and long-running series that encourage subscriber loyalty, he said.
Yang said his ambition was for original content to represent more than half the content on Youku.
Yang said the company’s focus was on the Chinese streaming market, and not on expansion into foreign markets, although he added in a press interview later that the Chinese diaspora in the Asia-Pacific region would be its first priority if it expanded abroad.