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According to the data in 2016Q4 Quarterly Monitoring Report on Markets of China's Online Video Advertising issued by Analysys's industrial database, in 2016Q4, of China's online video market income shares, iQIYI, Tencent Video and Youku&Tudou ranks top three with the shares of respectively 21.4%, 21.2% and 20.5%.
According to Analysys, the China's online video market development in 2016Q4 represents the following new features:
I. Intensive monitoring and control measures were taken on online view and the orders of the emerging market were gradually established
In September 2016, the State Administration of Press, Publication, Radio, Film and Television of the People's Republic of China (SAPPRFT) issued Notice on Related Issues on Enhancing Management on Live Video Services in Online Video Programmes, which required corresponding qualification for live video organizations in providing related services; in November 2016, the Cyberspace Administration of China (CAC) issued Administrative Measures on Online Live Video Services, which stipulated that live video providers and publishers must obtain legal Internet news information service qualifications, and the contents shall be published only after being examined and approved. Efforts were made to make classified management on live video, establish credit grade management system as well as blacklist management system; in December 2016, SAPPRFT issued Notice on Enhancing Management of Video Programmes Transmitted Via Online Social Platforms such as Weibo and WeChat, which stressed that the online social platforms shall conduct businesses according to the scope of business clearly indicated in the Online Information Transmission Programme Permit, assume various management responsibilities such as examining and controlling the programme contents, and shall not forward the video news programmes on political issues made by the netizens themselves; in December 2016, Notice on Further Enhancing Original Online Video Programme Planning, Construction and Management by the SAPPRFT was issued, which required that all online video contents such as network TV series, network films and network variety shows shall be put on records.
According to Analysys's analysis, the monitoring on the new online video contents and forms such as live video, user creation, online TV series and online blockbuster by the supervision authorities are being gradually normalized and clear. The qualification management and review procedures before the release of the contents have been started to be established. From platform self-examination and self-discipline to clear main body accountability and connection with specialized supervision system, the market orders of the online view have been further consummated. For the video content start-ups in the teeth of the storm, the establishment of orders are favorable to form fair and reasonable competition environments. And exploring subdivided content market spaces based on specific population, optimizing content quality and enhancing the interactions with users will be the highlights for online video content market in future.
II. Platforms successively proposed slogans for upgrading and the competitions for young users were further intensified
In October 2016, the sub-brand of iQIYI's VIP Membership initiated the "Ordinary People Portrait Program" and introduced the life philosophy of "Just Be Proud of Every Moment" to the membership brand; in November 2016, Tencent Video held the "V-vision Conference" and announced the brand new upgrading of the Tencent Video brand with the core brand spirit of "Never Let Down Good Hours "; in December 2016, Youku announced to start using the new Logo and introduced its new brand slogan "What A Cool World".
According to Analysys's analysis, behind the brand upgrading is still the intensified efforts of the online video companies on aspects such as deepening contents, enhancing services, innovating technologies and breeding ecology so as to improve appeals to the users, enhance user cohesiveness. The ultimate goal is still to achieve higher cashability of the platform. In November 2016, iQIYI successfully realized the coverage of intelligent 3D stereo function on all contents of the platform and enhanced the immersive experience of the users under VR mode; in December 2016, it released network film strategic cooperation program with Sony Pictures ; also in December 2016, the PGC Partner Program was upgraded to Overall Chain IP Cooperation, where a partnership venture capital investment league with the total value of RMB 1 billion was established by the three major investment organizations of IDG Capital, China Culture Industrial Investment Fund and Matrix Partners, the iQIYI Channel was upgraded to iQIYI Special Channel and launched iQIYI Headlines; it is also announced that about 200 head content projects would be launched in 2017 and meanwhile at least an amount of RMB 10 billion would be spent to purchase high quality copyright contents. In November 2016, LeTV announced that that the number of its paid members within the ecological system exceeded 50 million; in December 2016, the return of paid video membership system and sales system was announced to LeTV and the three major directions in future will be intensifying content layout, age and population based operation and the Content Open Eco Strategy. In November 2016, Sohu Video announced at the 3rd Sohu Video Presenter Conference that the resource assistance of RMB 1 billion of publicity resource, RMB 100 million of advertising revenue distribution and RMB 50 million of equity investment on self-media presenters in 2017. In November 2016, Tencent Video announced that that the number of its paid members exceeded 20 million, a year-on-year growth of about 300%; in September 2016, it launched the network variety "High & Happy Season", which consisted of 5 pure online variety shows and 8 copyright variety shows. In September 2016, Youhu established a Cultural Entertainment League with Sina Weibo and UC, where the basic data of the three platforms were interconnected and abilities such ass high quality contents, socialized transmission and algorithm computation were used to enhance user experience; at the end of October 2016, the preparation of Ali Great Culture & Entertainment Group was announced, of which Youku formed an important part in its "2+X" business matrix; in November 2016, Youku announced that that the number of its paid members exceeded 30 million; in December 2016, Ali Great Culture & Entertainment Group announced the initiation of "Strategic Upgrading of Video UPGC". Based on big data and matrix business abilities, efforts would be made to enhance the enabling, supports and mutual benefits of UPGC ecology and partnership; an investment of over RMB 50 billion on Ali Great Culture & Entertainment Group were planned in the future three years.
Meanwhile, by summarizing the strategic layout of each online video platform, competition for young users have been put into even more highlighted position. According to monitoring of Analysys Qianfan, by January 2017, the proportion of users under 30 in the field of comprehensive video is 52.86% and the proportion of users under 24 is 23.70%. According to Analysys's analysis, as for video platforms, young users, regarded as the population growing up under the Internet and Mobile Internet, are relatively active on online video platforms and are the main population enjoying video platform content services. Meanwhile, they also formed the major user groups for other digital entertainment services. Under the background of consumption upgrading, young users have higher payment preference on content services such as video and their growth space of consumption abilities is also relatively great. They are the key user group for better commercial conversion of video platforms as well as the optimal driving force for ecological development of the video platforms. With this regard, video platforms are making efforts to design more structurally diversified content ecology based on individualized content demands of young users, seek for satisfaction of differentiated user demands with the operation ideology of demassification, provide more experience-based derived services as well as entertainment experience with rich scenes, and promote the attraction and conversion of online video on young users.
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Research Notes：
Industrial analysis provided by Analysys is made mainly based on macroeconomic industrial data, final quarterly user survey data, historical data of the companies, quarterly business monitoring information of companies, etc. by Analysys's industrial analysis models with reference to market research, industrial research and company research approaches. And such analysis mainly reflects the market status quo, trends, break points and rules as well as the development status quo of companies.
Analysys believes that the data drawn according to the abovementioned industrial research approaches is within the recognized acceptable error range within the industry and can accurately reflect the industrial trends and change rules.
Such research outcomes made based on professional research approaches aim to provide decision reference. For the actual data of a specific company, please refer to the financial reports released by that company.
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