Tencent Video, iQiyi in race to lead China’s online video market

October 2, 2017
Industry News
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Bien Perez
bien.perez@scmp.com

The two platforms are already recognised as the most preferred combination of video streaming providers by mainland subscribers

Tencent Video and iQiyi are poised to further distance themselves from the competition this year as they intensify a two-way race to dominate mainland China’s red-hot online video market.

“It is coming down to these top two players, especially after Tencent Video doubled its paying subscribers in less than a year,” said Jefferies equity analyst Karen Chan.

The tight competition between Tencent Video, a unit of online gaming and social media powerhouse Tencent Holdings, and iQiyi, which is backed by Chinese internet search giant Baidu, means that more lucrative advertising revenue and paying subscribers will likely be cornered by the two Netflix-style platforms, as well as bolster their partnerships with film studios and other commercial content providers.

Chan pointed out that Tencent Video and iQiyi already provide the most preferred combination of online video platforms watched by mainland viewers.

Youku Tudou, the former online video market leader controlled by e-commerce titan Alibaba Group Holding, has remained firmly in third place behind those two platforms, she said.

Other popular video streaming players on the mainland include Sohu Video, Mango TV, Bilibili and Funsion.

Statistics from China big data services provider QuestMobile and Jefferies showed that Tencent Video recorded 457 million mobile monthly active users as of August 17, ahead of the 442 million posted by iQiyi in the same period.

Yukou Tudou, meanwhile, had 325 million mobile monthly active users as of August 17.

In terms of viewer demographics, iQiyi showed a higher user concentration of 33 per cent in the 25-30 age group coveted by advertisers, according to Cheetah Data and Jefferies. Tencent Video and Youku Tudou had shares of 30 per cent and 29 per cent, respectively.

Tencent Video announced last week that its paying subscribers have reached a new milestone of 43 million, up from 20 million in November last year.

“This implies a paying subscriber ratio of close to 10 per cent, benefiting from strong viewership of licensed content, such as Nothing Gold Can Stay and in-house produced variety show The Tomorrow Children, Chan said.

“We currently estimate Tencent Video revenue of 18.3 billion yuan (HK$21.5 billion) at the end of this year, with paid subscription revenue contribution of roughly 30 per cent.” Continue Reading

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