You On Demand Holdings Inc. (NASDAQ: YOD), the largest pay-per-view provider in China, inked a deal earlier this month with Guangxi Cable, the only cable operator in the southern province of Guangxi China. Guangxi Cable is a service provider to over five million homes in the region. Beginning immediately, Guangxi Cable’s clients will be able to utilize YOU On Demand’s Transactional Video On Demand (TVOD) and subscription video service offerings including YOU On Demand’s “YOU Cinema On Demand” service. Literally hundreds of hours of Hollywood films with new titles every week will be aired giving customers far more leverage in their viewing choices. YOU presently has deals Hollywood’s major studios including Disney Media Distribution, NBCUniversal, Miramax, Lionsgate and Warner Brothers, as well as a broad selection from independent and Chinese filmmakers. The joint venture with Guangxi is status quo for foreign media companies operating in China. An alliance with a Chinese company is standard operating procedure in order to do business there. You currently has a 20 year contract.
New York based YOD is a small-cap company that is actively carving a niche for itself in the Chinese market. It has successfully formed strategic partnerships with the largest media corporations in China. The company touts its management team as having expansive experience in television, cable, media and telecom. Indeed the CEO of the company is Shane McMahon of WWE fame whose extensive background in all of the aforementioned venues lends credence to the company’s management claims. It joined the NASDAQ list in June of 2012 hoping to position itself to be a contender with the likes of Time Warner Cable. YOU still has plenty of ground to cover in order to accomplish that goal but it is well on its way. There are a lot of people in China and the company’s customer base is positioned to expand rapidly.
You has a market cap of $13.13 million and is currently trading at $1.11, a nice entry point for anyone looking to get in on the ground floor. The company certainly has potential to grow if the business strategy remains sound. YOU may not be making money yet, but it is still in its infancy. It has managed to partner with some pretty impressive names in order to help get business rolling and it appears that the alliances it has made in the largest emerging growth market in the world have been substantial. It will be interesting to follow this company to see where it goes over the next few years. Obviously China is key to growth on this pick.