Victor Koo: Youku-Tudou Merger Will Show Results in the Long-Term

Victor Koo, image via TechWeb

Youku-Tudou (hereafter, we’ll just call it Youku) has kept things pretty quiet since the merger went official and former Tudou CEO Gary Wang announced his resignation. Now, in an interview with Caijing, Youku (NYSE:YOKU) CEO Victor Koo has spoken out about the merger and Youku’s future:

Actually, the merger went more smoothly than we had imagined, and the user overlap between the two companies turns out to be fewer than we thought. However, the effects of this merger agreement will become more obvious in 2013 and 2014.

One of the biggest concerns has been the price of copyrighted content, which had skyrocketed over the past few years as the result of a bidding war as China’s video sites moved away from piracy. But Youku CFO Liu Dele now says content prices are coming down, some by nearly fifty percent already.

Of course, none of that has made Youku a profitable company; the firm still reported a net loss for Q2 2012. But with content prices dropping and the merger jitters out of the way, things seem to be looking good. Caijing wrote that Victor Koo seemed more relaxed, and that he didn’t feel the need to make comparisons to Hulu or Netflix or any other Western services anymore.

Youku and Tudou continue to operate as separate sites from a user’s perspective, and it doesn’t seem likely that will change anytime soon. But now that they’re under the same management, and with content prices apparently dropping, could Koo’s implication be that Youku will see profitability sometime in the next couple years? We’ll have to wait and see.

Full disclosure: I have previously worked for Youku. However, I currently do not (obviously) and have no stocks or other interests in it or any other tech company.