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2014 to be a 'Year of International Acquisition' for Chinese Online Video Giant Youku Tudou

Youku Tubou - H 2013
Courtesy of Youku Tudou

China's biggest Internet video platform is to invest $49 million (300 million RMB) into overseas acquisitions, international co-pros, original productions and user-generated content next year.

SINGAPORE – Sunny Xiangyang Zhu, chief content officer of Chinese online video giant Youku Tudou, said the company is to invest $49 million (300 million RMB) in content in 2014, in the opening address of the Asian TV Forum and Market (ATF) at the Marina Bay Sands complex on Tuesday morning.

The company, created by the merger of China's two biggest online video platforms in August 2012, is now averaging 200 million daily views a day, and is set to invest heavily in new content next year. The proportion of the content budget that will go to acquisitions and original productions is still under review, Zhu told The Hollywood Reporter.

The most popular U.S. shows on the platform this year are The Walking Dead, The Shield and Under the Dome.

Popular British shows include Downton Abbey, Sherlock and Black Mirrors, while Japanese anime hit series Naruto, for which Youku Tudou also promotes merchandise in China, also attracts a big audience.

STORY: China's Internet Video Giant Youku Tudou Picks Up Three TV Dramas From Endemol

90 percent of revenue currently comes from advertising on the platform, but Youku Tudou plans to increase the proportion that comes from subscriptions, licensing of its original productions and interactive entertainment.

User-generated content on the site has been growing recently, with the highest-earning creators now making more than $13,000 (80,000 RMB) a month.

“Creators are now able to receive a steady revenue stream from Youku Tudou, enabling them to carry on producing new content,” said Zhu.

“Our own production team is still very small scale, but we want to differentiate our content from television programs,” added Zhu.

Comedy series Surprise, the platform's most popular original content, has been attracting 22 million viewers per episode. The series was created following big-data analysis of responses to previous shows examined ratings, online comments, Internet searches, news coverage and even their popularity on pirate-content sites, explained Zhu.

Youku Tudou has striven to rid its platform of copyright-violating content in recent years, partnering with the MPAA, among others, in anti-piracy campaigns. It won a $78,560 (491,000 RMB) copyright infringement suit in a Beijing court on Nov. 29 against Chinese streaming site Baidu for hosting 18 Chinese TV shows that Youku bought exclusive rights to broadcast online.

The shift to the viewing of content on smartphones and tablets is also creating challenges for copyright issues, with piracy, “more rampant on mobiles than it was on PCs three or four years ago,” according to Zhu.

Yukou Tudou is already viewed more on mobiles than on computers, and the company sees it as a huge opportunity, with hundreds of millions of new devices expected to be sold in China in the coming years.

Given the huge and growing domestic Chinese market, Youku Tudou has no plans yet to launch its platform overseas, said Zhu.

Twitter: @GavinJBlair