Alibaba-owned SVOD service Youku is leading a content arms race in China and expects to spend billions of dollars on original programming and international co-productions over the next few years. The digital platform launched in 2006 has already disrupted the country’s staid programming market, but its drive to create content at Hollywood standards should take it to a new level.
The service already has over 500 million unique users, a mixture of paid-for subscribers and free users, and some of its content is already starting to travel. Netflix picked up its critically acclaimed detective drama Day and Night in a landmark global deal last year, while entertainment format service Street Dance of China has attracted interest across Asia.
However, Weidong Yang, President of Youku and Alibaba Digital Media & Entertainment Group, insists that this is only the start. “Ideally, we can put more than half of our content budget into original production. For the last five or six years, we bought finished programs, drama, comedy and animation from US and European companies, but now we think we can do international co-productions.”
The company partnered with the BBC on a documentary project, with Endemol Shine Group on a variety show and is in talks with Sony Pictures Television to develop a Chinese drama series. Yang said that working with these companies, as well as striking joint ventures with the likes of Steven Spielberg’s Amblin Partners, will help improve the overall quality of content emerging from the Middle Kingdom.
“In China, the scriptwriters and the [production] mechanism is not yet very professional so we want to learn how to improve this and maybe joint ventures is the way to do this,” he says.
Demographically, about 60% of its viewers are female and the average age is 25. Consequently, the company is looking at content that skews young. Around 60 million of its customers pay for content, a similar number to rivals Tencent and iQiyi. But Yang points out that each of these companies come from a slightly different place, with iQiyi backed by search giant Badou and Tencent strong in gaming and social media.
Given that it was acquired by Jack Ma’s e-commerce giant Alibaba, which completed its $4 billion takeover of Youku in 2016, it sees merchandising as one of its priorities. “Maybe we can learn from Amazon, although Youku didn’t grow up in the Alibaba system, Alibaba bought it,” he adds.
The company is concentrating on its local market in China, and serving Chinese audiences, rather than looking to roll out Youku globally or distributing its programming to broadcasters around the world. Yang also says that he has been discussing a sports strategy at Alibaba, including the acquisition of key sporting rights.
One of the challenges that all Chinese broadcasters face is regulation. For example, when Yang spoke to Deadline at the MIPTV market in Cannes, there were three executives from the State Administration for Radio, Film and Television in attendance. That said, he is confident that regulators aren’t interested in forbidding Youku from producing certain kinds of content, but rather are pleased that it is taking Chinese content to “another level”.