Glued to the screen: online video in 2016

2016/3/14

The rise of online video viewing is a global phenomenon, which is manifesting robustly in the Chinese market. In this week’s Lookout we examine why video has become the most popularly consumed online media in China. Using Carat’s proprietary data from CCS we can see from 2014 to 2015, online video viewing in China grew by about 30% on both desktop and mobile, with time spent on mobile viewing eclipsing desktop (Millward Brown). In 2015, China had a total of 504 million desktop and 405 million mobile video viewers. These figures will continue to see a steady rise as accessibility and penetration increase. Online video platforms are fighting to gain market share and perpetually renewing their movie and TV series offerings through free and subscription-based options.

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BUILDING AUDIENCES WITH CONTENT

Video sites are investing heavily in creating their own IP & content in order to own audiences, create revenue streams and circumvent new regulation on the amount of imported content which can be made available. LeTV’s 太子妃升职记 is a highly popular TV series exclusive to the platform, similar to the relationship between Netflix and House of Cards. 太子妃升职记 is so prevalent that many people buy LeTV subscriptions simply in order to watch the show—exemplifying how content, rather than the dominance of a platform itself, could be the catalyst for success. Legend of Miyue, an 81-episode historical drama, was recently launched on broadcast and online channels through Tencent Video and LeTV. It attracted 700 million hits online in 24 hours (McKinsey).

THE POWER OF FILM

While going to the cinema is an increasingly popular activity in China, watching movies online is gaining even more traction. Last year, 44% of netizens watched at least one online movie per month compared to 12% who watched a movie at the cinema (CCS), attracted by the plethora of content available, the speed of availability after cinema release and the low price points of subscriptions..

Watching online movies is most popular among post ‘80s and ‘90s age groups, with over 60% penetration, compared to about 18% for cinema movies (CCS).

LIVING IN THE MOMENT

Live-streaming video content is another area that is seeing significant growth among Chinese consumers. Traditionally, live content has been the purview of TV stations; now the new norm of live-streaming is that everyone can be a creator and a broadcaster, with ownership over their personal media content. Qubo, V-Zhibo, and YY are examples of online platforms that provide channels for users to live broadcast content for profit. Interaction between the content creators and viewers is now two-way and live.

THE OUTLOOK

Chinese consumers now expect content all the time, any time, on any device, but with changing expectations we need to understand how the market will mature for advertising.

In the quest for loyalty and share from platforms, users are increasingly buying subscriptions which open up new content, but which also reduce the amount of ads they are exposed to.

Advertisers will therefore need to become experts at understanding the viewing behavior of their valuable audience, and consider taking a lead from live-streaming consumers to invest in creating their own content which their audience will actively seek & view.

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