Baidu, Youku, SOHU, and Tencent have been battling fiercely in a Chinese Web video market that features no dominant YouTube-like player for user-generated/short-form content, nor any dominant Netflix-like player for TV shows and movies. The market has seen huge mobile video growth: Mobile made up over 60% of Youku’s Q2 video views.
It starts to become incestuous: Xiaomi has announced it’s taking a stake in major iQiyi rival Youku (NYSE:YOKU) by acquiring shares on the open market. Xiaomi will also license content from Youku, and “jointly invest in the production and distribution of online video content and movies.” The news comes a week after Xiaomi announced it’s investing $1B to expand its Web video content library. The company claims 85M active users for its MIUI Android UI (pre-installed on its phones). We wonder what the Chinese Anti-trust authorities say about this?