What would have happened if YouTube had fulfilled its early promise of being the best place on the Internet to find any kind of video — from baby videos to viral hits, indie originals to Hollywood blockbusters, and everything else ever broadcast or caught on tape? Since YouTube’s ascendancy caught the content business off-guard, it hasn’t turned out that way here in the U.S. In the meantime, China’s leading video portal, Shanghai-based Tudou.com, has achieved some measure of video utopia, and in a country where the majority of its population lacks broadband access and freedom as well as copyright regulation.
Last night we had the opportunity to speak with Gary Wang, the founder and CEO of two-year-old Tudou. My notes on our conversation are below. If you’d like to hear more, be sure to join us next week at NewTeeVee Live, where Wang will be speaking on a morning panel about crossover hits between online and television content.
NewTeeVee: So how big is Tudou?
Gary Wang: We know that we account for about 53 percent of the Chinese online media market. There are 120 million Internet users in China, about 75 million broadband users among them, and we have monthly coverage of about 45 million.
NewTeeVee: You’ve been called the Chinese YouTube, but do you compete with YouTube on your own turf?
Wang: YouTube has .1 percentage market share in China — they are nowhere.
NewTeeVee: I’ve heard you have the rights to a fair amount of professional content on your site, maybe more like the Chinese Hulu than the Chinese YouTube? What’s the split between professional and user-generated content?
Wang: We have both. For the Hulu part of the site, in China there are no major production companies; there are thousands of small ones. So we establish a relationship with each of them. There are also several distribution agencies in China so we establish relationships with these agencies — they are more condensed. We also allow anyone to upload anything.
NewTeeVee: Would you say your site is driven by hits or more by long-tail content?
Wang: It’s very much long tail. The most popular ones get viewed 200,000 a day, but if you look at total numbers, we stream about 60 million streams a day, so that counts for a very miniscule part.
NewTeeVee: Are you seeing non-professional users developing their own web series and establishing followings of their own?
Wang: Yeah, of course. With Tudou’s director program some of them have uploaded dozens of shows, and get 150,000 to 200,000 views every time they upload. Animation is very big. Some do music videos; some even create their own TV series.
NewTeeVee: You mentioned that you allow users to upload anything they want — are there any limits on that?
Wang: Of course we don’t allow stuff — this is China — we don’t allow hard porn or other things.
NewTeeVee: What about if a user were to upload a bootleg copy of content from a professional provider?
Wang: The content owners in China take a post-action approach here — they realize there’s no way you can stop that beforehand. So they just let it go, and once something becomes very popular then they will come to us and see what we can work out, revenue share or something like that. Content owners are having a much more difficult time here, so they are trying to work out deals, actually.
NewTeeVee: Are you taking any action to algorithmically screen content as it is uploaded to prevent copyright infringement?
Wang: We have about 30,000 to 40,000 uploads a day, and we have no clue what this is, so basically we leave this to the content owners to decide. We usually try to cover this with umbrella agreements — they will give us shows [for which] they can prove they own these rights, and if something happens that’s not covered we will basically follow the same revenue share.
NewTeeVee: You mention revenue-sharing — I assume that revenue is coming from advertising. What forms of advertising do you use on Tudou?
Wang: What we have today is very similar to what Heavy.com is doing — a preroll with a static image, and then wraparound ads around a video
NewTeeVee: In the U.S. there’s a lot of talk about users disliking prerolls.
Wang: If it’s very short, nine or 10 seconds, I don’t think users mind. We’ve had [advertising] in place for about three months now, and our user traffic has not dipped at all.
NewTeeVee: How much money are you making?
Wang: I can’t say.
NewTeeVee: What do you charge for advertising?
Wang: We charge about $3 per CPM.
NewTeeVee: Are you trying to make your way into other markets internationally?
Wang: We operate only out of China.