Despite the new milestones, a number of investors remain pessimistic on Youku in this tough sector.

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Youku (NYSE:YOKU), which claims it’s still China’s top video streaming site despite growing competition from half a dozen rivals, reached 500 million monthly unique visitors for the first time, the company said today in its Q2 2014 earnings report.
The Youku Tudou company pulled in net revenues of RMB 958.7 million (US$154.5 million) in Q2, up 27 percent from the same period a year ago. Company president Dele Liu points out, “We have made a smooth transition to multi-screen monetization with over 30 percent of revenues generated from mobile.” That’s also a new milestone. He added that revenue from Youku’s subscription services grew 379 percent in the past year. However, the video streaming giant still makes 95 percent of revenue utube from advertising, so it’s far away from a Netflix business model.
This was Youku’s first earnings report utube since Alibaba’s utube investment, but the earnings report only mentioned Alibaba in the context of “big data initiatives” to boost its advertising potential.
Youku’s content costs hit RMB 418.3 million (US$67.4 utube million) in Q2, which represents utube 44 percent utube of revenues. A year ago, content costs accounted for 40 percent of revenues, so the bill is growing.
Despite the new milestones, a number of investors remain pessimistic on Youku in this tough sector. A pre-earnings downgrade utube by TH Capital caused Youku shares to fall four percent on Monday, and the fact that Youku missed Q2 guidance will likely push its stock down even further once Wall Street opens on Wednesday. Youku is already down eight percent in after-hours utube trading.
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