20 May The Video and Audio Platforms That Rule the Internet in China
Our last blog post presented a rough map of China’s social media and Internet ecosystem. Keep in mind, this map would be one of the colorful, easy-to-read maps found in an elementary school, not one that could actually be used for much navigation… but hey! It’s a start.
This time, we’ll be looking at some of the top audio and video players on the Internet in China. Chinese social networks are all about streaming, karaoke, and picture editing. Dynamic content is a cornerstone the Internet in China and it presents the latest opportunity for brands to gain ground in this vast market.
Chinese video streaming platforms offer options for both live and prerecorded content. These companies, largely owned by China’s top Internet giants, are experimenting with paid subscription and other monetization tactics. Here are a few of the top players:
Youku acquired competitor Tudou in 2012 in an attempt to fight against BAT-sponsored competitors. However, in late 2015, Alibaba paid $3.67 billion for the company.
iQiyi is Youku’s top user-uploaded video competitor. Baidu owns 80% of this company. Although Chinese users are generally weary of paying for digital content, iQiyi has been leading the way for paid streaming subscriptions. More than 5 million people have signed up for iQiyi’s streaming services, a relatively small number. But given the market we’re looking at, this is nothing to laugh at.
LeTV was recently rebranded as LeEco for its U.S. hardware expansion. The name LeEco reflects the company’s ambitions as a vertically-integrated ecosystem for platform, content, devices, and applications.
In China, LeEco’s video streaming service ranks #3. It was ahead of the original content trend- producing its own series long before Netflix brought House of Cards to the table.
Live-video streaming has taken off in China. It’s so popular that there, and in South Korea, hundreds of thousands of viewers tune to in to watch someone (usually a pretty young woman) do something as mundane as eat dinner alone.
Inke allows anyone to become a live streamer and most of this platform’s broadcasters are just regular people. The company has an interesting take on broadcasting monetization- viewers can pay real cash to gift the streamers virtual presents. Token sale income is then split between the streamer and the company.
Inke was the seventh top grossing app in April 2016 and had the third fastest-growing number of MAUs out of all iPhone apps in China. Inke is certainly something to keep an eye on.
Chinas version of Twitch just raised $100 million from Tencent and Sequoia. This streaming site has 15 million DAILY active users, and more than 600,000 users have streamed at least once. Streaming is huge in China, especially for video games. China currently makes up 15% the eSports market, which has 2016 projected revenues of $463 million in 2016.
The son of China’s richest man (or second-richest, depending on the month and how Alibaba is faring for Jack Ma) is also entering the eSports game. Wang Sicong is a social media celebrity who gained notoriety by posting photos of his adorable dog wearing more than 250,000 RMB worth of Apple watches. Wang’s Panda TV will stream live games. Wang already owns top Chinese pro gaming team Invictus Gaming, which competes in DotA, LoL, and Crossfire matches, among others.
The audio distribution ecosystem on the Internet in China is relatively fragmented but it’s clear that streaming services are in demand. Recently, Apple Music has joined this battle but their pricey services may not suit the payment-averse market.
Ximalaya FM is China’s most popular podcasting service. Like in other markets, podcasts have taken off in China in the recent years. And in China, where DIY media is all the rage, Ximlaya FM provides a DIY podcast platform. The app just launched in 2013 and already has 200 million users. The platform enables everyone to broadcast content and offers certification for premium broadcasters. As of December 2015, Ximalaya Fm has 3.4 million broadcasters, of which 60,000 are certified.
With claims of 800 million users, Tencent’s QQ music is certainly working off QQ’s large userbase. QQ music does offer a subscription streaming service, which includes the discography of an outspoken opponent of streaming, Taylor Swift.
Ali Music Group
Alibaba’s expansion into digital entertainment wouldn’t be complete without music. In 2015, the Ali Music Group was formed, taking charge of operations for Ali-owned Xiami and TianTian. Xiami’s business model gathered some heat in 2010. Users paid under 1 RMB for a download, 50% of which went to the copyright owner, 25% went to Xiami and 25% to the uploader. The problem was the uploader wasn’t necessarily the copyright holder, allowing music pirates to make money.
Baidu has been doing some spending of its own. Last year, it merged with leader Taihe music. Baidu Music has over 150 million monthly active users, certainly an impressive number. However, a vast majority of users aren’t paying a cent for the service.
As this VentureBeat article discusses, Baidu Music costs about the same as Apple Music for the Chinese market does. While this a bit pricey for the average consumer, it is not unreasonable for the wealthy. However, Chinese consumers are famously brand-conscious, so those who are able to pay will probably opt for Apple’s higher-end prestige.
How to get on the train
The real challenge for all video and audio companies is subscriptions. We see it over and over again- from paid games to music streaming, Chinese consumers aren’t accustomed to paying upfront for digital content. Youku and iQiYi have only converted about 1% of their regular subscribers into paying users. Right now, streaming platforms are mostly seeing revenue through ads, but there is hope for the future. China’s younger generations are making more money and value convenience more than their elders. This brings hope that these consumers would rather pay for easy access to content rather than scramble around for illegal materials.
China’s evolving video and audio ecosystem presents unique marketing opportunities. Oniix forms ad partnerships with sites such as Youku Tudou to secure features for our apps all over the Chinese Internet. Additionally, brands are breaking into China’s DIY media fad, creating their own broadcasts to establish themselves on the Internet in China as thought leaders. With our partners, we are experimenting in broadcasting to effectively and efficiently reach new customers and keeping an eye on these platforms that are the future of marketing in China.