Video streaming market share in China

No Netflix in China

China offers a diversified ecosystem for online video content, with no single service yet coming close to attaining a market share comparable to Netflix’s 87%2 in the U.S.

Netflix doesn’t operate in China. Instead, the bulk of the domestic market is split between iQiyi, Youku, and Tencent Video, which are respectively controlled by the country’s “big three” internet companies: Baidu, Alibaba, and Tencent.

As growth in paid membership has slowed, however, self-made dramas and variety shows have become more popular, and competition has intensified between online video platforms. Over the past two years, with the rise of the state-backed Mango TV, Bilibili has gradually expanded from animated content to a full product line of film and TV services.

 

Short Videos Apps Dominated the Market

Meanwhile, short videos, led by Douyin and Kuaishou, have taken over the industry, impacting video platforms, so the three giants are now under attack from two sides.

The video streaming market in China to grow at a CAGR of close to 30% by 2020. One of the key reasons for the video streaming market growth in China is the rising demand for continuous streaming of data as per the user’s convenience and time, without downloading. Owing to the increased access to multimedia devices and the internet, consumers are increasingly viewing digital videos on demand, leading to a sharp increase in online video traffic.

For companies interested in tapping the soaring demand for streaming video in China, content tailored to local audiences now provides opportunities for brand integrations that speak directly to consumers.

 

The boom of streaming video during the lockdown

During the COVID-19, Chinese citizens found themselves housebound for weeks. Spending the majority of their time indoors, audiences, cut off from cinemas and other social activities, turned in droves to streaming video to pass the time.

With movie theaters shuttered, streaming platforms debuted 26 films online during the Lunar New Year holiday week, with average daily views of these movies twice that of the average in 2019.

Although the coronavirus outbreak is easing in China as of May 2020, things are far from back to normal, and streaming platforms are expected to see continued growth this year in terms of viewer acquisition, brand investment, and overall revenue.

 

Why are video streaming important for brands in China?

Now inevitable in editorial plans and among marketing trends, the videos have shown in recent years to be able to guarantee a strong engagement.

With increased exposure, you can generate more leads for your business or get more followers for your personal brand. Within social media, it’s also easier to get people to find and share live videos. Since it requires immediate action, they’ll need to share your content right away so their friends can also see it.

Another reason why video streaming is great to grow your audience is its cost-effectiveness. In the marketing world, there are many effective ways to reach people, but most require large investments. In comparison, video streaming can be created on a shoestring budget and still bring great results.

Video streaming is an effective tool in your digital marketing arsenal that can help you reach your audience, expand your brand and ultimately drive more sales.

Video streaming major players in China

The Chinese media landscape and streaming video ecosystem is in a constant state of flux, with new players both large and small constantly entering the market. However, in recent years five key platforms have engaged in a fierce battle for market share.

 

Iqiyi

Founded in 2010 by internet search giant Baidu, iQiyi is most often referred to as the “Netflix of China.” This is not an entirely accurate comparison, since iQiyi is controlled by a larger tech firm, offers a free, ad-supported viewing option, and is worth far less than Netflix.

The platform leads the Chinese market for online dramas and original films. While Netflix only focuses on TV series and movies, IQIYI provides over 30 different types of content that include not just film and T.V series, but also cartoons, sport, news, gaming, etc. in an ecosystem of its own, that is busy creating new channels of content creation.

Currently, it has 538 million monthly active users and 107 million subscribers.

Youku

“Chinese Youtube” Youku, launched in 2006 as a hub for user-generated content. At its peak, Youku was the top online video platform in China, a position it boosted through a merger with rival Tudou in 2012. Alibaba acquired the company in 2015 and took it private.

The average daily subscribers increased by 59% year-on-year in the last three months of 2019.

Through Youku, foreign companies can promote their brand in a mass-market perspective.

Tencent video

Launched in 2011, Tencent Video has shifted its strategy from spending on overseas content to developing original content that links to Tencent’s stakes in games, literature, music, and sports.

International content was once Tencent Video’s strong point: foreign language films and dramas, exclusive shows, or broadcasts for live NBA games in China. However, priorities have changed considerably in recent years and original content now prevails, especially in the areas of reality shows and IP-based programming from Tencent’s literature and from ACG’s activities (anime, comics, and games).

Currently, it has 540 million monthly active users and 106 million paid subscribers.

Mango tv

Established in 2008 as the online presence for the provincial Hunan Broadcasting System, which is China’s second-largest TV network after the centrally operated CCTV.  Mango TV has recently come into its own, and is now often discussed alongside its larger rivals in reports about China’s streaming video market.

Although originally set up as a platform to host HBS programs, Mango is building an independent reputation for creating a live stream of its dramas and reality shows.

Currently, it has 130 million monthly active users and 18 million paid subscribers.

Bilibili

Bilibili is the central hub for China’s ACG (anime, comic, and games) subculture, and became somewhat notorious for requiring users to pass a 100-question “geek test” in order to become “official members” with additional privileges on the platform. Bilibili is also a creative hotbed for China’s active meme culture.

The network has more recently gained acclaim for original documentary content that appeals to an emerging class of foodies and travelers. It is also investing in content creators with a particular emphasis on the current vogue for vlogs in the Chinese market.

Currently, it has 130.3 million monthly active users and 8.8 million paid subscribers.

Brands seeking to reach it’s young, hip audiences have to be savvier in their efforts to gain and maintain their attention, either by launching their own channels with entertaining content or through collaborations with established creators.

How to market your brand through streaming video platforms?

The rise of content tailored to mainland China provides greater opportunities for brand integrations that speak directly to consumers in that vast market. In doing this, it is important for brand owners to understand the key rules of these platforms.

The following key features are the golden rules for brands considering working with China’s streaming video platforms.

Branding

Brand integrations, including product placements on scripted series, operate on an ad-buying model controlled by the platforms. This is very different from industry practices in the U.S., where brands more often work directly with producers to place products into shows and often no money changes hands. Brands in China pay for varying levels of exposure, and their broadcast presence is counted in seconds.

Regardless of the content strategy used by a brand to reach the audience in China via domestic streaming video platforms, the most important thing is to ensure engagement in a way that is as fluid and discreet as possible.

Sharing the practical value of a product or brand allows audiences to “see for themselves” rather than hearing from a paid spokesperson or online influencer.

Content is the king

Chinese internet users love watching videos online and have shown little resistance to viewing advertisements as long as they are creative and/or strike some kind of emotional chord.

It is for this reason that many if not most major international brands have been quick to turn to stream video platforms in China as a pillar of their advertising and marketing strategy.

The main tip for making ads and managing dedicated channels for brands is simple: content is king. Taking a “content commerce” approach, in which brand messaging or advertising is camouflaged in interesting scripted or unscripted.

Content that incorporates trends that matter to your target customer is a best practice.  Numerous brands both inside and outside of China use this tactic to increase their impact in China.

Special announcements and product introduction

Hundreds of consumer goods, luxury, and fashion brands have turned to product placement on streaming television shows and movies to get in front of Chinese audiences over the past two decades. Although an effective way to increase awareness, product placement can be a minefield for brands whose integrations come across as awkward or irrelevant to the broader storyline.

Viewers tend to be highly critical of obvious brand intrusions into dramatic plots. Chinese dramas already have a reputation for “watering down” content with unnecessary ads.

Blogger/KOL hosted

To achieve greater engagement, the use of the so-called KOLs (Key Opinion Leaders) is certainly recommended. Not only the participation of famous people increases visibility, but also a “take over” (transfer of the company profile to a public figure) of the company account helps to increase engagement with potential consumers. Receiving live answers to your questions from a celebrity is definitely an opportunity not to be missed.

gma agency

Do you want to know more about How to market your brand through video streaming in China? Contact GMA a digital marketing agency, specialized in the Chinese digital market.

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