Yeah1’s failed negotiations over maintaining the partnership with YouTube is a lesson in the old adage “Don’t build houses on other people’s land.”
|Nguyen Anh Nhuong Tong spoke about the problems with YouTube at Yeah1's shareholders' meeting on May 8. Source: nld.com.vn
This was shared by Yeah1’s chairman Nguyen Anh Nhuong Tong at the compan'y shareholders' meeting on May 8. Due to the failure, the firm only set a 19 per cent revenue growth target for 2019, a marked reduction against previous years’ 60 per cent. “In my 41 years of life I have never seen so many upheavals,” Tong said. “It will take at least six months to overcome the difficulties.”
“Yeah1 upload about 400 hours of video content a day, which equals all other Vietnamese channels combined. Fast growth brings huge risks – and the problem with YouTube is a valuable lesson for us,” Tong added.
Accordingly, Yeah1 set the targets of reaching VND2 trillion ($86.95 million) in revenue and VND180 billion in profit in 2019, up 19 and 10 per cents on-year. As of the end of the first quarter of 2019, its net sales hit VND387 billion ($16.82 million), up 17 per cent on-year. However, after-tax profit was only VND8 billion ($347,826), a sharp fall against the VND29 billion ($1.26 million) in the same period of last year.
Regarding plans for development, Tong stated that Yeah1 will focus on developing its own platform and a social network. In addition, Yeah1 will follow the global mergers and acquisitions trend among content makers and content distributors. “Developing our own content and taking advantage of our multi-channel network to approach users is more sustainable than depending on YouTube.”
In the short term, Yeah1 will provide video content for other YouTube channels and gain 50-60 per cent of the advertising revenue.
|Since global video platform YouTube announced stopping working with Yeah1, the local multi-channel company’s stock has fallen from VND245,000 ($10.6) in last June to around VND100,000-110,000 ($4.34-4.7), down nearly 60 per cent.
However, local securities company Rong Viet assumed that Yeah1’s own content is not as impressive as the content for which it purchased the broadcasting rights. “Developing their own video contents will require huge resources and a long time. In short, its potential for growth on YouTube is still large, but its plan for growth is unclear,” said Rong Viet’s representative.
Yeah1 is working with France-based Something Big to produce video content for children. The firm is also partnering up with US-based Viacom to exclusively distribute Nickelodeon’s cartoon videos on YouTube and Facebook in Vietnam and Thailand.
In the middle of March, YouTube accused the multi-channel network SpringMe Pte. Ltd., in which Yeah1 owns 17 per cent of the shares, that some of its channels violated YouTube’s policies. This led to the global video platform stopping work with all other Yeah1’s firms runningYouTube AdSense like Yeah1 Pte., Ltd., and ScaleLab LLC.