If you are in mainland China and want to watch Michelle Phan’s makeup tutorials online, you won’t be able to access them on YouTube. Instead, you use Youku. Youku is the largest online video provider in China. It has 23.6 billion monthly views (580 million unique views per month) and nearly 60 percent of its users are under the age of 30. Youku was taken private by Alibaba in a $3.5 billion deal last year.

So Youku is basically a YouTube knockoff?   
You can think of Youku as the Chinese equivalent of YouTube as the two share similarities. Youku has become a content hub through Youku Channel, a dedicated section on the website for creators to manage and distribute their content as well as interact with their subscribers.

“We are the largest user-generated content ecosystem in China,” said Jay Chen, director of marketing for Youku. “Influencers on our platform don’t become famous overnight. They either have a specific type of personality or an active presence on various platforms including Weibo and Youku.”

The platform seems to have lots of content. Any ad opportunities there?
Certainly. Advertising represents around 80 percent of Youku’s overall revenues, said Chen. In the first nine months of last year, Youku garnered around 1.4 billion yuan (about $212.2 million) in ad revenues.

Pre-roll ads are the most popular on the platform, which can last 15 seconds, 30 seconds or even one minute. So oftentimes Chinese viewers feel sick of seeing so many ads on Youku, especially when the pre-rolls are too long and repetitive, according to Ken Zhang, strategy director of agency OMD in Shanghai.

Hmmm that doesn’t sound appealing as everyone here is emphasizing on user experience.
True. But this year Youku has been subtler in advertising when working with big ad spenders. Take Unilever-owned shampoo brand Clear, it became the title sponsor for Youku’s popular original talk show called “Mars Intelligence Agency” (an official name from Youku).

Aside from the obvious brand signage, Youku placed the Clear product into the show and even customized a song for the brand in one episode, because viewers are more likely to understand the product value when they are emotionally invested in the content, said Chen.

An anchor in "Mars Intelligence Agency" is introducing Clear to the show's viewers.
An anchor in “Mars Intelligence Agency” is introducing Clear to the show’s viewers.

Meanwhile, last month Youku tested an “ad-free” format for the first time with China’s biggest cocktail brand Rio, during singing contest “Sing! China.” (Think of it as “American Idol.”)

Rio bought off the show’s exclusive online title-sponsor rights from Youku, where it only served a five-second-long pre-roll. Other branded content was integrated into the show — there were no commercial breaks. Rio also exclusively sponsored the landing page of “Sing! China” on Youku, with all banners linking back to its flagship store on Alibaba’s online retail platform Tmall.

YouTube has a big push into virtual reality. Is Youku diving into VR as well?
Of course, because Youku wants to be the catch-all places for videos. Youku has more than 20,000 VR videos (with the majority being 360-degree videos) to date and it adds 1,000 titles per day, said Chen.

But OMD’s Zhang pointed out that the VR inventory on Youku is nascent because the platform is only able to support 360-degree pre-rolls. “We’ve seen more advertisers [in China] creating 360-degree content, but they are minority number-wise,” he said.

Now I know more about Youku. I heard before that the platform was rife with pirated content. Is that still an issue today?
This year Baidu and Youku have sued each other for copyright infringement. Youku’s Chen explained that the platform spends billions of yuan buying copyrights ever year, and has developed technology to block pirated content automatically.

“We are one of the largest [copyright] buyers in the industry,” he said.

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