Recently, in a mobile application video ranking, Sohu secured the eighth spot with 80.44 million active users. This figure represents just one-tenth of the leading platform's user base, making it the sole top-five player yet to surpass the 100-million-user mark. Even more telling is the fact that Sohu users consume merely 5.19MB of monthly traffic, which amounts to a mere 6% of the industry leader. These statistics paint a rather somber picture for Sohu, a company once renowned for nurturing talent in China's internet video space.
Looking back to 2010, Sohu Video was a trailblazer, particularly in acquiring rights to international dramas. By securing exclusive broadcasting rights to these shows, Sohu attracted both a massive audience and significant advertising revenue. During that period, they even managed to generate over $200 million through programs like "The Voice of China." Their original series, including hits like "The Silken Man" and "A Year of Silence," along with major films such as "Pancake Man," further cemented their dominance. At that time, Sohu Video became a model for competitors, with key figures like iQiyi's Gong Yu and Youku's Gu Yongsheng having ties to Sohu.
However, by 2014, Sohu began cutting back on copyright investments. Coinciding with this decision, restrictions were placed on the number of overseas TV dramas available online, stripping Sohu of its competitive edge. Adding insult to injury, the company also missed opportunities in areas like hardware and live streaming, which slowed their progress. While Sohu Video resumed purchasing copyrights in early 2016, the market had already shifted significantly, driving prices sky-high. As a result, CEO Zhang Chaoyang announced a pivot toward original content production.
In contrast to traditional practices, Zhang emphasized moving away from star-studded productions, aiming to keep talent costs below 30% of the budget. He hoped to challenge the inflated salaries of celebrities in the industry. Despite these efforts, Sohu’s financials tell a different story. The company reported a quarterly revenue of $461 million with a net loss of $89 million, representing a 41% increase in losses compared to the previous year. Brand advertising revenues plummeted by 24%, largely due to underperforming video ads. Industry data suggests Sohu continues to lag behind its peers, raising questions about whether their strategy can effectively revitalize their position.
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While Sohu’s ambitions remain high, the path forward appears challenging. Will their innovative approach yield the desired results, or will they continue to lose ground to competitors? Time will tell.
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