Youku parent firm goes back to old name

Youku parent firm goes back to old name
Old Boys: The Way of the Dragon is a film developed from a short video uploaded on Youku before striking it big at the box office.
PHOTO: China Daily/ANN

When 49-year-old Victor Koo took center stage at a meeting in Beijing earlier this month, he was not wearing his usual suit and tie. Instead Koo, better known in China as Gu Yongqiang, was dressed in a casual T-shirt and jeans, and the changes are not set to stop at his wardrobe.

The founder of Youku.com, one of the world's first major video sharing websites, pre-dating even YouTube, is preparing to shake up the online entertainment industry-again.

At that Beijing meeting, the 2,000 attendees were surprised to learn that Koo plans to re-name his company, Heyi Group, which literally means "combination with one". The name is not entirely out of the blue. It was the company's original moniker before Youku propelled it to super stardom.

Koo promises more big changes are on the way-changes that will impact the company even more than its 2012 merger with its competitor, Tudou.com.

"The time of one-directional online videos will come to an end," Koo says.

"The entertainment industry will step into a new era centered on 'personal channels'."

When Koo talks about "personal channels", he is referring to about 10 million users uploading videos to his website in the past one year.

He says the group will invest more than 10 billion yuan ($1.6 billion) in the next three years to nurture content initially created online. This kind of content currently attracts about 10 billion clicks on Youku every month.

"The value of sales of copyrighted material will fade in the online video industry," says Koo. However, he does not intend to stop streaming popular TV programs and films. Heyi Group has simply changed its focus to turn its nearly 600 million users into creators.

"You can pay a lot of money to buy the rights of popular TV shows to increase website traffic, but those watchers are not loyal to the website."

Koo attributes the booming market for videos made by ordinary people to the fact that lowering the threshold for admittance has allowed more people to create videos.

Gu Sibin, chief products officer of Heyi Group, says: "The popularity of uploaded videos used to greatly depend on whether they are recommended by website editors. However, the users will have more methods to attract viewers in the future."

He says the more views a channel has, the more power the content up-loaders will have over their channels which are closely connected with online shopping, crowdfunding and a share of advertising income.

Youku has about 10 personalized channels, with an estimated value of more than 100 million yuan.

Gu Sibin expects that number to increase with their more flexible platform.

According to Wei Ming, who heads program production on Youku.com, encouraging grassroots projects will lead to ideas for new, major projects.

He says grassroots productions have already proven they can translate to major mainstream audiences.

Old Boys: The Way of the Dragon, a feature-length film developed from a short video uploaded to Youku became a hit not only in cinemas, but a social phenomenon with the song Little Apple from the film, becoming an unexpected viral hit.

Heyi Pictures has invested in more than 20 films since its founding last August.

Nevertheless, a major cinema release is still not big enough in Koo's eyes.

"People will see us making our advance in many different dimensions in the near future," Koo says, smiling.

 

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