Youku Confirms SARFT Licenses 2008-07-09

July 9, 2008 – Leading Chinese Internet video company Youku announced today that it has obtained an "Information Network Broadcast Audio Visual Programming Permission Certificate" from SARFT, what industry insiders call a "video license," within the time period in which it had expected that license be issued. The announcement follows on new last week that Youku had raised an additional $40 million dollars in Series C equity funding and venture debt. The issuance of licenses line with what Youku CEO Victor Koo said to the media in mid-June, when he predicted that the company would receive its license "within a few weeks."

In addition to the video license, Youku also received from Beijing's SARFT offices a "Broadcast Programming Production Operation Permission Certificate," confirming Youku as a legal, legitimate audio-visual broadcast and marketing platform. With its issuance, Youku becomes the only commercial video sharing site to hold both licenses

Obtaining the license in the anticipated timeframe was, said Koo, "Exciting news – just as expected." He added, "The critical factor in getting the license was careful control over content. With a well-tuned monitoring system that ensured content would conform with the standards set by the government, it was only a matter of time before we were granted the licenses." Koo said, "Given Youku's large-scale platform, developed business practices, our leading position, and our attitude of self-discipline in active conformity with the government's supervisory principles, obtaining the license was inevitable. This is within the scope of normal business, and it's not a big surprise." 

Addressing the flood of rumor and speculation surrounding the issuance of video licenses, Koo suggested that people should remain level-headed: "Getting a license is still only a first step. A video license is like a driver's license: Even after you have one, you still have to drive by the rules of the road – or you stand to lose that license," he said. "And beyond the license, if Internet video sites are to be sustainable over the long-term, the core of competitiveness is still technology, content, marketing, and sales."