China’s video subscription market is booming, with a new report revealing close to 229 million Chinese people will watch a video via a streaming service in 2018.
The findings from eMarketer’s first-ever forecast of subscription over-the-top (OTT) video viewership in China has revealed 37% of digital video viewers in China will watch online content using a subscription service, such as iQiyi, Youku Tudou or Tencent video.
This figure is set to increase with eMarketer predicting “a strong growth trajectory” as content companies continue to invest in local content to drive subscriptions.
The subscription market grew by more than 80% in 2017 and by 2019, eMarketer predicts more than two-fifths of digital video viewers in China will use an OTT service.
“Apart from a constant stream of new and appealing content, factors driving the adoption of subscription OTT include growing internet penetration, faster connection speeds, affordable prices and an increasing willingness to pay for entertainment,” according to Shelleen Shum, senior forecasting analyst at eMarketer.
“The market is currently dominated by platforms operated by BAT—Baidu’s iQiyi, Alibaba’s Youku and Tencent’s Tencent Video. Though iQiyi currently leads the market, we expect the gap between the three platforms to narrow as investment continues and content strategies evolve.”
Video has exploded in China in recent years with all the local players investing heavily in content deals and creating home-grown content in a bid to drive subscriptions.
Last year, iQiyi inked a lucrative deal with Netflix , while Tencent announced it would invest $300m in content creation and Alibaba formed a strategic partnership to provide Youku Tudou with exclusive content deals.