5 Ways Alibaba’s Takeover of Youku Tudou Will affect Life in China

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Alibaba and TudouAlibaba’s USD 3.6 billion dollar take over of video platform Youku Tudou poses to make waves in the realm of media and online consumption culture in China. In a press release by YouKu:

“Youku is eager to work with Alibaba to grow our multi-screen entertainment and media ecosystem,” -Youku Chairman and Chief Executive Officer Victor Koo.

And by ‘media ecosystem’, he means media ecommerce empire….on multiple screens at a time.

Find out how the merging of this Chinese Ecommerce giant and video platform could change modern life in China.

1.Alibaba will now be able to advertise their products directly through Youku Tudou video content.

Imagine watching a video on Youku Tudou and seeing your favorite character wearing a super hip jacket. Suddenly, a pop up “click to buy” button appears on the video screen that leads you to the exact website where you can purchase that celebrity’s jacket. With ecommerce intertwined with media entertainment— viewers can potentially buy their favorite TV character’s outfits in real time. “Ohh I like her shoes. I’m going to buy them. Right. Now. Click.” Enter the era of click-to-buy video content product placement.

Resonance China created a marketing trend report about Chinese social media app, Nice, which tells users which other people are wearing their clothing

Resonance China created a marketing trend report about Chinese social media app, Nice, which tells users which other people are wearing their clothing

In fact, China is not too far away now. A Marketing Report by Resonance China, introduces NICE, the Chinese photo app that allows viewers to pinpoint which brands they are wearing and see which other users are wearing the same clothing. For more information on how brands use NICE and other Chinese  Apps to reach Chinese audiences download Resonance China’s Marketing Reports.

2. Chinese will have even more legal access to American TV shows and videos.

Forget Netflix. Youku Tudou already provides millions of Chinese access to American TV shows and sometimes full feature movies (which may or may not be offered legally).

walking dead

Youku Tudou offers Chinese viewers stream access to popular American series like The Walking Dead. American TV shows are extremely popular in China, especially amongst young middle class audiences.

American TV shows like “Big Bang Theory” and the “Walking Dead” are extremely popular in China, especially amongst young middle class audiences. Alibaba’s full ownership of Youku Tudou will allow it to deliver U.S. films and drama series to more than a third of China’s population, giving Alibaba a distinct edge over competitors Baidu Inc. and Tencent Holdings Ltd.

Soku, a video streaming platform subsidiary of Youku Tudou offers American shows like "Two Broke Girls" and "Gotham"

Soku, a video streaming platform subsidiary of Youku Tudou offers American shows like “Two Broke Girls” and “Gotham”

Youku Tudou is one of many internet companies that provide streaming access to American as well as Chinese and Korean shows. Sites must obtain a film and television screening license from the State Administration of Press, Publication, Radio, Film, and Television.

3. There will be more US-China media collaborations
Hollywood made in china

There is already a push to bridge the media gaps between China and the US. Warner Bros., for example, recently signed a deal with a state-backed investment fund to produce local-language movies in China. DreamWorks Animation and other American film companies have set up partnerships with Chinese companies to bypass China’s foreign quotas and grab a larger share of box-office revenues.

Now the Chinese are zeroing in on Hollywood. Many believe that the buyout deal came in part after Alibaba CEO Jack Ma toured Hollywood to meet with studio executives, took control of a Chinese movie studio, and invested in the latest “Mission: Impossible” film.

Youku Tudou, which mostly streams professionally produced content rather than amateur videos, plans to collaborate with U.S. entertainment producers to create content for its website, Koo said in an October 2014 interview.

Alibaba and Youku Tudou are not the first Chinese monster entities to get involved with Hollywood. Alibaba’s main competitor Tencent Holding Ltd, for instance is backing a digital animation studio in Culver City, CA run by former DreamWorks Animation executives.

4. It will fuel the trend of mobile video streaming

Chinese on their phones

Forget television, most video content is being watched on the Internet, and in China, via mobile streaming.

More than 461 million people in China consumed video online as of June, with 354 million users accessing from mobile phones, according to the China Internet Network Information Center. That’s larger than the entire population of the U.S

Brands have recognized the rising importance of mobile marketing and begun designing brand campaigns that can be completely accessed from their mobile phones. Beats by Dr. Dre’s “Straight Outta” Campaign for instance created a special HTML-5 multi-media WeChat page that included video content featuring Asian Celebrity Superstars.

Beats by Dr. Dre launched its Straight Outta Asia campaign via WeChat Mobile Html 5 pages

Beats by Dr. Dre launched its Straight Outta Asia campaign via WeChat Mobile Html 5 pages

For more information check out Resonance China’s Beats by Dr. Dre Straight Outta Asia Campaign Report.

5. Chinese people will NEVER stop staring at screens.

Maybe to shower or go to the bathroom. Maybe.

Texting. Calling. Working. Playing. Shopping. Watching. Flirting. Buying. {Repeat}

This is what Koo meant by “multi-screen empire.” From televisions, to computer screens, to mobile phones, to tablets the growing middle class demographic of young Chinese will constantly have a reason to be glued to a screen. Now that Alibaba has bought Youku, the marriage between ecommerce shopping and internet video content in China will further incentivize companies to visually tantalize their Chinese viewers into buying their products–hence fueling the growing trend of staring at screens.

Whether to work, shop, chat with friends, or watch their favorite tv shows, Chinese will continue to be connected to some kind of device.

Stare at screens

The KPCB graph below shows the average number of minutes per day people from different countries stare at their different screens. Chinese stare at their smartphones about 171 minutes on average per day.

Chinese stare at screens

The marriage between China’s largest ecommerce giant and video content provider will open the door to a number of new opportunities for brands to reach consumers. It’s a brave new digital world in the wild wild East of the PRC.

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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