Originally published at VideoInk.
In China, citizens aren’t streaming content on Netflix, Amazon, or Hulu. Instead, the country’s ‘Big 3’ streaming services are Tencent Video, Youku, and iQiyi. And also unlike the streaming market in the US, the competition emerging out of China’s streaming market is much tighter.
According to a report released by eMarketer, by the end of 2018 24 percent of digital video viewers in China will subscribe to Tencent Video, 22.9 percent to iQiyi, and 22 percent to Youku. Though Tencent leads the pack and is expected to continue to do so, controlling an estimated 29 percent of shares by 2020, the competition is much closer between these streaming giants than those in the United States, where Netflix is the clear winner.
In 2018, eMarketer estimates that close to 229 million people in China will watch video via a subscription streaming service that bypasses traditional distribution. By 2022, more than a quarter of the population will use an OTT service.
Much of the attraction to SVOD services, aside from more affordable price points, is the growing production of original content. Investing in content has been a key theme for all of the platforms owned by the so-called BAT companies (Baidu, Alibaba and Tencent). Alibaba-owned Youku is expected to post the highest increase in content spending in 2018 and has also secured rights to stream this year’s FIFA World Cup. As a result, eMarketer expects Youku’s subscriber base will grow by 55 percent this year and overtake iQiyi for second place in terms of digital viewer share by the end of 2019.
“As the race to gain a larger slice of viewer screen time heats up, all three major streaming players in China have invested billions to develop their own original programs and secure rights to exclusive content,” eMarketer forecasting director Shelleen Shum said. “Competition in China’s growing OTT market, fueled by growing internet connectivity and a broader shift toward internet entertainment, is cutthroat. As subscriber churn rates are high, content remains a critical part to improve user stickiness.”