Video streaming in China: Key market research findings
- Dearth of entertainment programs on TV drives the market
- Advertising is the dominant shareholder in the market in terms of revenue generation
- Key vendors—Cntv.cn, iQIYI, Kankan, LeEco, PPTV, Sohu, Tencent, and Youku Tudou
The market research analysts at Technavio estimate the video streaming market in China to reach a market value of almost $14 billion between 2016 and 2020. The market is driven primarily by the scarcity of entertainment programs on state-operated TV. The television industry in the country is characterized by a rigid framework of regulations that are monitored by the State Administration of Radio, Film, and Television (SARFT) under the Chinese government. If the content is not found to be in accordance with the guidelines, SARFT imposes the responsible party with a ban or fine. This has resulted in a scarcity of entertainment programs on TV and has stunted the growth of independent TV production companies. The rise in the number of people streaming videos via their smartphones and an increasing demand for affordable entertainment are some of the factors that will positively influence the growth in the video streaming market in China during the forecast period.
The new market research report from Technavio presents a breakdown and analysis of the video streaming segments based on revenue.
“The enforcement of bans on various international television series is an ongoing trend in the market. For instance, international series such as NCIS, The Big Bang Theory, Good Wife, and The Practice were banned from sites like Sohu TV, iQIYI, and Youku, leading to an increase in the piracy of television series in the country. As a countermeasure, the Chinese government is working on launching a state-owned video streaming service to control piracy and provide a legal and cost-effective method for users to access Hollywood and other premium content without defying the law,” says Ujjwal P Doshi, Lead Analyst, Media & Entertainment, Technavio Research.
In 2015, the advertisement segment accounted for the majority share of the revenue by occupying almost 77% of the overall market space. Revenue generation through advertisements is broadly divided into two categories: cost per thousand (CPM) and cost per click (CPC). In the CPM method, the site owners charge according to the number of ads for a particular advertiser at a rate card price, while CPC is used widely in text ads and are similar to sponsored links within a search engine. There is an increasing preference for online streaming of advertising amongst advertisers because of the growing popularity of free video streaming and the ease of generating revenue. This manner of revenue generation is advantageous for the users as well since they can enjoy movies, television series, and other online videos without paying. Toiletries and food and beverages are some of the most common products advertised online by manufacturers.
The key vendors in the video streaming market in China include Cntv.cn, iQIYI, Kankan, LeEco, PPTV, Sohu, Tencent, and Youku Tudou. The market is highly consolidated and competitive and is dominated by a few global providers. The market is expected to witness steady growth in the coming years due to the increased number of smartphones and demand for affordable entertainment. Providers in the market compete on the basis of price, differentiation, genre, video and audio quality, and platform type. They are using new business models, innovative strategies, and upgrading their websites to boost market growth and revenue. To gain a competitive edge over their peers, the key vendors are establishing partnerships with content providers and licensing foreign content that is not available in China.
A more detailed analysis is available in the Technavio report, Video Streaming Market in China 2016-2020.
We can customize reports by other regions and specific segments upon request.
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