Can Youku Tudou Inc (ADR) (YOKU) Be the Netflix, Inc. (NFLX) of China?

With China at the end of Netflix’s global wish list of expansion targets, Youku Tudou has a real shot to matter here. The big hurdle will be educating the consumer, but that was an even more daunting task for Netflix when it introduced streaming in 2007.

Now that Netflix has 33.2 million streaming accounts worldwide — and more than 6 million of those residing in 50 different countries outside of the U.S. — there’s less to prove. Premium subscriptions work as long as you’re willing to work with hardware and software partners to make it as accessible as possible.

Netflix’s original streaming service was tethered to Windows PCs. That was it. Mac support, video game consoles, and mobile apps came long after.

China still has a long way to go, but the infrastructure for a premium streaming service is a lot better in 2013 than it was here six years ago.

Youku Tudou Inc (ADR) (NYSE:YOKU) is the top dog when it comes to video-sharing in China.

Last year’s combination of Youku and Tudou created a market leader with roughly a third of the online video market. If Youku Tudou doesn’t take the lead to push through a Netflix-like service, somebody else will.

Can you imagine how things would’ve played out here if YouTube had been the one to beat Netflix to premium streaming? What if it were YouTube that got its buttons on Blu-ray remote controls or began lining up content deals while they were still cheap?

Investors would be happier, at least. The stock was rocked earlier this month after Youku Tudou was forecasting a 22% sequential dip in revenue for the current quarter. Steady subscription revenue would help smooth that out.

Youku Tudou Inc (ADR) (NYSE:YOKU) can be more than what it is today. It’d better realize that before somebody else does.

The article Can Youku Tudou Be the Netflix of China? originally appeared on Fool.com.

Longtime Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends Google and Netflix. The Motley Fool owns shares of Google and Netflix.

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