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China's YouTube rival shifts into overdrive

Steven Schwankert | Aug. 20, 2008
Since its launch in December 2006, Youku.com has emerged as China's online video leader.

BEIJING, 20 AUGUST 2008 - Want to see how Chinese users are viewing the Olympics, and themselves? In China, Youku.com is where the online video is at, not that Google-owned site with a similar-sounding name.

Since its launch in December 2006, the site has emerged as China's online video leader. During one week in December 2007, Youku registered over 100 million video views per day, according to Nielsen/Netratings.

CEO and founder Victor Koo, a former president and COO at Chinese portal Sohu.com, claimed that number has now increased to 150 million per day.

Youku developed its own content delivery network, including its own video player, based on the open version of Flash Video. Koo said the company operates its own networking centers in every province in China, using servers from HP and Dell and routers from Cisco and Huawei.

The network saw a lot more building during 2007. "We thought we'd grow five times, not 20 times. That's a nice surprise for traffic, but maybe not such a pleasant surprise for the cost structure," Koo said.

The company's growth was threatened in May, when the State Administration of Radio, Film and Television (SARFT), which regulates the content broadcast online and over the air, omitted Youku.com and its two closest rivals -- Tudou.com and 56.com -- from a list of approved online video sites.

In July, Youku.com emerged from that dust-up with SARFT with not one but two licenses and US$30 million in new investment. Those licenses cover not only user-generated video, but also film and television content distribution. Youku's closest rivals, Tudou.com and 56.com, are still operating without official permission. The latter site, 56.com, spent more than a month offline, due to what it called a "technical upgrade."

Koo took the permit process in stride. "We had already positioned ourselves with mainstream and 'healthy' content from day one," he said.

For Koo, content screening is good business. "If you're purely user-generated, then to be honest you may have a lot of racy content, and brand advertisers are very wary and uncomfortable," he said. He called the site's regulatory approval "the by-product of our advertising standpoint" -- keeping the content "healthy" meant that not only would advertisers approve, but so would regulators.

Maintaining that position takes 20 to 30 people working in eight-hour shifts, 24 hours per day, to approve or reject videos being posted, Koo said. Youku also uses digital fingerprinting to help select content: if a video matches something previously approved, then it too is approved; the same is true for videos that are not accepted. Moderators also use tags to search for sensitive words and weed out pornography. Beyond that, they use the old-fashioned way to screen some content -- watching it to see whether it's suitable for posting.

 

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