Kai Xing's  Instablog

Kai Xing
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Director of Shrewd Capital Limited, a private equity management company in China.
  • Short youku.com 0 comments
    Jan 2, 2011 6:33 PM | about stocks: YOKU

    Chinese internet video website youku.com went IPO on NYSE, traded like the next youtube. 

    I would recommend to short youku.com as the company shows little potential for real commercial growth:

    1, the main reason youku.com has large market share in China (and only in China) is because youtube is blocked in China.

    2, historically most of the videos on youku.com were pirated movies and TV shows, which are the main factors that drive Chinese viewership. Today, as a listed company on NYSE, it pays more attention to copyright (good for movie makers, bad for its viewers). Lots of videos (copyrighted) are widely available on other Chinese video websites are not available on youku.com. I bet that many viewers are switching to other sites.

    3, most of the videos on youku.com today are either recorded TV programs (or clips) from various Chinese TV channels and self-made video clips also available at other websites (most likely youtube). Those videos will not be sufficient  to drive viewship growth.

    This company has an unconvincing business model to grow viewership in China. There is hardly any loyalty in Chinese viewers. 


    Stocks: YOKU
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