Is Mango TV going to beat Youku.com?

For the online video industry in fierce competition, Mango TV, originated from the traditional TV industry, is believed to be an intruder. Now, Mango TV has competed its first round financing with estimated value of 7 billion Chinese Yuan. There have been a lot of discussion about it and many people wonder if Mango TV would put a great threat to the current structure of the online video industry, or even beat the current market leader Youku.com (优酷).

According to the data released by Science and Technology of Tencent, the Internet platform of Mango TV has covered Over-the-top content (OTT), internet video, IPTV and Mobile TV. It had a peak rate of 60 million viewers online, the video view (VV) of 80 million per day and active OTT users of 7 million. As for its advertising revenue, it is estimated to reach 0.7 billion Chinese Yuan by the end of 2015. As for Youku.com, its official report states that the unique users per month is 140 million, VV is 750 million and revenue in 2014 was 4 billion. By the comparison of their market values, the scales of business revenue and the volumes of video view (VV), we can find that the figure of Youku.com is around 9 times that of Mango TV. However, Mango TV is believed to have a more space to rise after it goes public.

It is important to realize two unique reasons for the great development of Mango TV in only one year. Firstly, Mango TV hugely relies on Hunan TV which is the market leader in the traditional TV industry in China. Thus, it has access to plenty of high-quality content including variety shows, TV series and other programmes. Most importantly, due to the “exclusive broadcast” strategy released in 2014, Mango TV is the only platform providing these high quality programmes. Secondly, Mango TV owns an internet TV license, which allows it to easily integrate its content resources on various platforms including TV, mobile, PC etc.

At the first glance, Mango TV is an Internet product and a distributional channel for videos, just like its counterpart Youku.com. However, in essence, it is currently only a platform serving for a traditional TV station. Its key feature is still the content. By contrast, video websites like Youku.com features in distribution channels. The business of Youku.com counts on the large amount of users, while the business of Mango TV bases on its high quality contents. To look further, we find that they have different developmental directions as well. For Mango TV, it already has good content, so it needs to increase user volume. For Youku.com, it needs to integrate content production in its value chain. In other words, Mango TV is more like a content provider seeking for consumers while Youku.com is more like a distributer seeking for good content.

Thus, it is impossible to completely equal the two and judge which one would beat the other. However, in the short term, it must be admitted that Mango TV has a great potential for consistent development. But in the long term, its impact to the video industry is actually in doubt.