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Summary:

Understanding online video in China from afar can be challenging. The role of user generated content, regulatory and copyright issues are in many cases very different than the landscape in the U.S., and the language barrier doesn’t really help either. That’s why we were very happy that […]

Understanding online video in China from afar can be challenging. The role of user generated content, regulatory and copyright issues are in many cases very different than the landscape in the U.S., and the language barrier doesn’t really help either. That’s why we were very happy that Victor Koo, founder and CEO of Youku.com stopped by our offices yesterday to talk a little bit about his company and the Chinese online video landscape.

Youku.com is barely known in the U.S., but it’s an online video heavyweight in China, where it attracted more than 200 million visitors in November. Koo described the site as a mixture of Hulu and YouTube, with a slant towards long-form, licensed content. All differences aside, there are also some similarities between Youku and Youtube. Just like Google’s video venture, Youku has started to stream more and more content in real time and to look beyond advertising to make money with online video.

Youku.com was founded by Koo in 2006 after leaving Chinese Internet portal Sohu.com, where he had previously served as COO and then CFO. Youku has secured a total of $110 million in financing, including $40 million that it added in December. The company grossed 200 million RMB (about $29 million) in revenue in 2009, and currently employs about 300 people.

It has been outsourcing some of the content reviews it needs to do before it can publish videos online, with an additional 100 to 200 people reviewing videos for material that Chinese regulators would deem objectionable. And no, we’re not just talking about user-generated clips criticizing the Chinese government. A big issue have been licensed Korean soap operas depicting historic issues like the Korean War.

Speaking of user-generated content: Koo told me that the site has to actively encourage users to submit content simply because there hasn’t been a history of participatory media in China. Currently, around 30 percent of the content on Youku is user-generated, while 70 percent is licensed. The dominance of licensed long-form videos is something that’s also having an impact on Youku’s metrics: The site sees around 30 to 35 million visitors a day, and the time spent per visitor is around one hour.

Related content on GigaOm Pro: Is Google’s China Problem a Groundswell of the Closed Internet? (subscription required)

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