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Youku reduces losses in Q3, grows to 300 million video views per day

Youku redesigns homepage for smaller screens and mobile viewers

Chinese video sites Youku and Tudou (NYSE:YOKU) – remember, they’re now one company – have released their Q3 earnings report. On the consumer side, the sites now see over 300 million video views per day, which is up 14 percent from the previous quarter.

On the financial side, it’s more of a mixed bag. Revenues dropped slightly, but the Youku Tudou company managed to reduce its (apparently never-ending) losses. Here’s a summary:

  • Q3 revenue hit $140 million, but that’s down from $189 million at the same point last year.

  • Losses narrowed to $35.7 million, down from $50.7 million at Q3 2012.

  • Ad revenues for the quarter increased only three percent over last year.

  • The sites emulated Netflix in amortizing content costs for TV serial dramas and movies so as to reflect a “new consumption pattern” among viewers. That made Q3 content costs higher than they otherwise would’ve been.

  • Youku Tudou projects slightly growing revenue for Q4, between $140 million and $146.9 million.

  • Missed its earnings per share (EPS) by $0.02.

Earlier this summer, Youku said that it’s in good stead as consumers switch to smartphone and tablet viewing, with the company having the most mobile viewers per day of any of its rivals in China. Nonetheless, recent consolidation in this sector – Baidu acquiring PPS; Suning buying PPTV – shows that its rivals are teaming up and getting stronger.

(Editing by Paul Bischoff)

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