Leshi Internet Information & Technology (the mother company of Letv.com) reported a 57.63 percent increase in 2010 net profit to 70.1 million yuan. According to the company filing, sales revenue in 2010 rose 63.49 percent to 238 million yuan, with earnings per share (EPS) of 0.84 yuan, up 42.37 percent. The company announced a stock dividend of two shares and a cash dividend of 1.5 yuan for every 10 shares held. According to its chairman, “LeTV is the first chinese online video platform to be profitable.” According to a research report by Chinese firm Galaxy Securities, charging to watch videos, copyright distribution and advertising – the three main streams of revenue for LeTV – are the reasons that the company has turned a profit ahead of its larger rivals Youku and Tudou.com Inc., who have a larger share of online video viewers in China.
New content investments
In order to pursue this growth, the Beijing’s subscriber fee online vide platform confirmed its intention to develop its exclusive content acquisitions. LeTV hast just hired Zhang Zhao, formerly head of Enlight Pictures, to head up a new feature film division. Zhang produced Chinese hits such as the All’s Well That Ends Well films (2009-10). He told The Hollywood Reporter “LeTV has produced a few films but they wanted to get deeper into the film business and expand their international connections. I’m interested in their Internet business but my job is to build up the infrastructure of the Le Vision Pictures.”
“le,” means ”entertainment” in chinese and the company wants to justify its name. Last february, Leshi Internet Information & Technology anounced its project to spend 40 million yuan to purchase online copyrights of four television dramas. One month earlier, the platform purchased sole online copyrights for 19 television dramas from Huayi Brothers for 57 million yuan.
In early january 2011, xinhuanet.com reported that “LeTv acquired over 70 percent of the 2011 copyrights for popular serial television programs in China and would spend over 100 million yuan on copyrights of movies and television dramas“. According to chinese press, Letv.com was therefore able to simultaneously broadcast more than 100 serials, with six local TV stations and one central station enabling an exclusive weekly broadcast. “Acquisition costs for internet use of some of China’s most popular serials now outstrip those for satellite TV broadcasting,” revealed the Letv’s CEO Liu Hong.
SOURCES: LeTV, press (15 & 16/03/2011)