The number of paid subscribers to China’s online video platforms will surpass 300 million during 2019, according to Chinese consultants Entgroup.
At the end of 2018, a total of 230 users paid for China’s digital video services, a figure that had increased 119% over the past three years, at a greater compound growth than the overall number of Chinese internet users. The latter group had a compound growth rate of 6.28% in the same period.
There are more than 800 million internet users in China, offering huge potential for growth in the country’s paid subscription video market, said Entgroup.
"Our report clearly shows that paid content has already become a driving force in China's online entertainment market in 2018,” said Liu Cuiping, vice president at Entgroup. “This was most clearly demonstrated by the listing of market leader iQIYI on NASDAQ last spring, showing that capital is beginning to realise the huge potential of this market if companies have a clear business development strategy and a focus on attaining new members and the creation of strong original content.”
During 2019, the Chinese market will reach a point of maturity in which a single online platform could have over 100 million subscribing members, the consulting group added.
China’s entertainment market is forecast to continue its rapid growth in 2019, with dramas and movies being major drivers for increases in online paid video.
The report found that top-tier platforms producing popular content will be key drivers of market growth.
iQIYI has achieved a higher growth in subscribing members than Netflix, with subscribing members up 89% year-on-year in the third quarter of 2018. iQIYI content including the hit period drama Story of Yanxi Palace and variety show The Rap of China aided the growth of its paid memberships.
China’s online video platforms have created a new user-oriented business model through the implementation of a revenue-sharing model for the production of content. This model both encourages production studios to produce best-quality programmes and reducing costs for platforms, said Entgroup.
Additionally, crossover marketing strategies are boosting joint paid memberships, anda comprehensive IP-based value chain is being created on video platforms. As well as advertisements and paid membership, online video platforms are discovering business opportunities in live concerts, live streaming, virtual goods, online gaming and e-commerce, which can push forward their capabilities for monetisation.
Looking forward, the consulting group expect artificial intelligence (AI) to play a larger role in personalised recommendations, as well as intelligent creation, intelligent production, intelligent distribution, and intelligent broadcasting.