Sohu Video fast growth will increase investment

"According to the business unit, the newly established Sohu Video sales team has achieved initial success and is expected to accelerate growth in 2013," said Zhang Chaoyang, chairman and chief executive of Sohu. According to the survey, the2012 total revenue exceeded 1 billion U.S. dollars, an increase of 25% per cent, including Sohu video brand advertising, in the fourth quarter of 2012 and the annual income is at a record high.

"In the quarter, brand advertising revenue reached the upper limit we had previously estimated, mainly because of the robustness of cars, online video and real estate sectors," said Wang, co-president and chief operating officer of Sohu. In particular, it is expected that sales of online video services will maintain strong growth momentum in 2013. ”

Sohu Joint president and chief financial Officer Yuchuyan at the earnings analyst meeting, said that with Sohu Video sales team completed, Sohu Video in the first quarter of 2013 will be able to achieve strong growth, expected income in the first quarter of the year-on-year growth will be more than 70%.

"The volume of content purchases will continue to expand in 2013." Yuchuyan revealed that last year, Sohu video content procurement cost of 60 million U.S. dollars, this year at the contract price or will increase to 70 million U.S. dollars to 80 million U.S. dollars. And with the increase in Sohu video profitability, the purchase cost is still in an acceptable range.

In Yuchuyan view, compared with the previous price inflation situation, the current video content market price overall tends to stabilize. But some popular content will still be in the pursuit of all video companies, and the price of these content is bound to be higher. Facing these popular content, each video website will pursue these content to become the radical buyer.

In addition, because Sohu video won the "Good voice of China," the exclusive new media rights, the third quarter of Sohu video bandwidth costs are expected to increase significantly, because by then "China's good voice" this China's top variety show will bring huge traffic to Sohu video, as well as advertising revenue, brand value growth.

"We still keep our expectations," Yuchuyan said, and Sohu video will be profitable in the next 18-24 months.

According to the latest release of the 2012 Q4 monthly daily average number of independent user coverage, Sohu Video still firmly occupy the second position in the industry.

"We will continue to consolidate our core product strengths," Zhang said, which will remain the focus of both domestic and American dramas. Sohu Video has been able to obtain very good TV drama resources, the future will continue to upgrade for these best content for marketing efforts. In addition, the future will also increase the number of popular TV variety show content.

In particular, the United States play, Sohu video to maintain the first. Because of the Emmy Award-winning drama "Homeland Security", "Modern Family" such resources, Sohu video American TV Channel cumulative volume in the fourth quarter of the quarter-on-quarter growth of 136%. It also attracts more quality users as well as advertisers in the luxury and automotive industries.

In addition to the core TV series and variety shows, the third focus will be homemade content. Zhang said that this part of the content is relatively low cost, but if successful, its access to the flow of the same as the popular TV series. The entertainment industry DNA of Sohu Video makes the company have a competitive advantage in providing users with the homemade content that meets their needs.

Zhang said the video belongs to the media business, which is different from the "winner-all" market in the social networking business. In fact, the market can accommodate several companies coexist. There are already several leading video companies, these companies can continue to operate in the future.

"In view of the strategic importance of Sohu video, we will unswervingly promote the business," Zhang said, with differentiated content resources, commercial capabilities of the promotion and independent sales team, Sohu Video will be full fire in 2013.