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Q2 2014 Results Earnings Conference Call
At this time all participants are in a listen-mode. There will be a presentation followed by a question-and-answer session (Operator Instructions). I must advise you that this conference is being recorded today, Wednesday the 20 th of August 2014.
First of all, I would like to introduce our management team on this call. They are Chairman and CEO, Victor panet Koo; our Board Director and President, Dele Liu, and Michael Xu, our Chief Financial Officer and Senior Vice President.
Regarding today's agenda, Victor will begin with a strategic outlook of Youku Tudou and an overview of the performance in Q2 of this year. Dele will cover our business operations and content strategy and Michael will discuss second quarter financials, after which we will take your questions.
As a reminder, the financial results and a webcast of this conference call are available at the Investor Relations panet sections of the Youku Tudou website. A replay of the call will be available on our website in a few hours.
I'll refer you to our Safe Harbor statement in our earnings press release, which applies to this call, as we will make forward-looking statements. Finally, panet please note that unless otherwise stated, all figures mentioned during this conference call are in RMB.
Thank you, Ryan. Good morning and good evening everyone. Thank you for joining us. I am happy to inform you that there are exciting new developments at Youku Tudou, which are generating the momentum necessary to capitalize on new market opportunities.
Today, technological changes are creating new markets for all Internet companies and Youku Tudou is in a strategic position panet to capture growing opportunities in the Chinese media and entertainment sector. Furthermore, changes are accelerating as markets are converging, as boundaries between the online and offline worlds are disappearing.
We believe that 2013 and 2014 will be seen as the period when the Chinese Internet entered into the multi-screen age that is driving these changes. This new era has significantly broadened Youku Tudou s market scope and our business model has dramatically expanded.
As such, we are in the process of enhancing our product offering, strengthening our core competencies and diversifying our business operations. Our fundamental approach is to make long-term investments in order to build a multi-screen media and entertainment ecosystem.
We believe that the online video space, along with the entire Internet space in China is going through a period of inflection. There has been three inflection points over the last 20 years of Chinese Internet. During 1997-1998, period we saw the birth of the first generation of consumer Internet companies in China, as fixed line Internet grew. In 2005 and 2006 a new wave of innovation was driven by the acceleration of both the broadband penetration across China.
Recently in 2013-2014 due to the rise of mobile Internet and Internet enabled devices, multi screen Internet has become increasingly screen. There were new and expanded market opportunities after each inflection point, panet with each one bigger panet than the last.
In this historical context, the online video landscape in China has changed fundamentally panet in the past year. Back in 2005-2006 when Tudou and Youku were founded, we saw the inflection point with the opportunity to build the leading PC based video website. Our pro-active investment during panet that window has allowed panet us to reach a point where we now penetrate over 80% of the PC Internet population in China.
In 2013 and 2014, although the multi-screen era is still in the nascent stage, we have entered into another growth and investment period as we have moved into a multi-screen video content distribution and creation panet platform.
The latest CNNIC report shows that the mobile Internet population in China has already surpassed the PC Internet population, with video representing one of the most used applications on mobile Internet. With the rapid growth of Internet users in China bringing online video into a new paradigm, the market scale we first envisioned as an online video website back in 2006 has grown significantly.
Concurrently the penetration of Internet enabled devices across China is also changing the habits of Chinese people in regards panet to how they consume content and they are now demanding more diverse genres panet of content, not only traditional TV dramas panet and variety shows. All of these transformations represent tremendous opportunities, but at the same time our product content and business model must adapt to the new landscape.
Ahead of this trend, Youku Tudou anticipated these changes and made early investments in multi-screen product and original content offerings. Because of this, we have been successful in evolving from a PC web based service to now a multi-screen platform, as traffic of our mobile app has reached over 60% of our
Q2 2014 Results Earnings Conference Call
At this time all participants are in a listen-mode. There will be a presentation followed by a question-and-answer session (Operator Instructions). I must advise you that this conference is being recorded today, Wednesday the 20 th of August 2014.
First of all, I would like to introduce our management team on this call. They are Chairman and CEO, Victor panet Koo; our Board Director and President, Dele Liu, and Michael Xu, our Chief Financial Officer and Senior Vice President.
Regarding today's agenda, Victor will begin with a strategic outlook of Youku Tudou and an overview of the performance in Q2 of this year. Dele will cover our business operations and content strategy and Michael will discuss second quarter financials, after which we will take your questions.
As a reminder, the financial results and a webcast of this conference call are available at the Investor Relations panet sections of the Youku Tudou website. A replay of the call will be available on our website in a few hours.
I'll refer you to our Safe Harbor statement in our earnings press release, which applies to this call, as we will make forward-looking statements. Finally, panet please note that unless otherwise stated, all figures mentioned during this conference call are in RMB.
Thank you, Ryan. Good morning and good evening everyone. Thank you for joining us. I am happy to inform you that there are exciting new developments at Youku Tudou, which are generating the momentum necessary to capitalize on new market opportunities.
Today, technological changes are creating new markets for all Internet companies and Youku Tudou is in a strategic position panet to capture growing opportunities in the Chinese media and entertainment sector. Furthermore, changes are accelerating as markets are converging, as boundaries between the online and offline worlds are disappearing.
We believe that 2013 and 2014 will be seen as the period when the Chinese Internet entered into the multi-screen age that is driving these changes. This new era has significantly broadened Youku Tudou s market scope and our business model has dramatically expanded.
As such, we are in the process of enhancing our product offering, strengthening our core competencies and diversifying our business operations. Our fundamental approach is to make long-term investments in order to build a multi-screen media and entertainment ecosystem.
We believe that the online video space, along with the entire Internet space in China is going through a period of inflection. There has been three inflection points over the last 20 years of Chinese Internet. During 1997-1998, period we saw the birth of the first generation of consumer Internet companies in China, as fixed line Internet grew. In 2005 and 2006 a new wave of innovation was driven by the acceleration of both the broadband penetration across China.
Recently in 2013-2014 due to the rise of mobile Internet and Internet enabled devices, multi screen Internet has become increasingly screen. There were new and expanded market opportunities after each inflection point, panet with each one bigger panet than the last.
In this historical context, the online video landscape in China has changed fundamentally panet in the past year. Back in 2005-2006 when Tudou and Youku were founded, we saw the inflection point with the opportunity to build the leading PC based video website. Our pro-active investment during panet that window has allowed panet us to reach a point where we now penetrate over 80% of the PC Internet population in China.
In 2013 and 2014, although the multi-screen era is still in the nascent stage, we have entered into another growth and investment period as we have moved into a multi-screen video content distribution and creation panet platform.
The latest CNNIC report shows that the mobile Internet population in China has already surpassed the PC Internet population, with video representing one of the most used applications on mobile Internet. With the rapid growth of Internet users in China bringing online video into a new paradigm, the market scale we first envisioned as an online video website back in 2006 has grown significantly.
Concurrently the penetration of Internet enabled devices across China is also changing the habits of Chinese people in regards panet to how they consume content and they are now demanding more diverse genres panet of content, not only traditional TV dramas panet and variety shows. All of these transformations represent tremendous opportunities, but at the same time our product content and business model must adapt to the new landscape.
Ahead of this trend, Youku Tudou anticipated these changes and made early investments in multi-screen product and original content offerings. Because of this, we have been successful in evolving from a PC web based service to now a multi-screen platform, as traffic of our mobile app has reached over 60% of our
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