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Competition Heats Up in China's Mobile Video Sector

Country’s top mobile apps battle for users, content and revenues

May 1, 2017 | Video

China’s rapidly expanding mobile video market is creating a seemingly insatiable demand for mobile video content and services.

eMarketer estimates the country will have more than 435 million mobile video viewers in 2017. This huge market opportunity is leading to an increasingly competitive environment among the top video apps, as they fight to secure more exclusive content, users and revenue streams.

According to research by Cheetah Lab on the top mobile video apps among Android users in China between March 27 and April 2, a number of well-established firms dominate the sector.

Market leader Tencent Video’s mobile app had the largest reach at more than 15% of Android users, while Baidu-owned iQiyi—a newly-minted Netflix partner—was in second place with more than 14% reach.

Top 10 Mobile Video Apps Among Android Users in China, Ranked by Reach, March 27-April 2, 2017

It’s also worth noting that Cheetah Lab’s analysis was focused on long-form video apps (which distribute content like movies and TV shows), rather than those providing short-form video content.

The research matches with a separate December 2016 list of China’s top mobile video apps from QuestMobile. The rankings, which were based on monthly active users (MAUs), placed Tencent Video and iQiyi firmly in first and second place. Tencent Video’s mobile app had more than 388 million MAUs, while iQiyi boasted nearly 369 million.

This highly competitive battle among the country’s top mobile video appmakers isn’t just about gaining more users. It’s also about securing future revenue streams that may be generated from video services—including advertising, “value-added” services like subscriptions, and content licensing.

Digital Video Revenue Share in China, by Segment, 2011-2019 (% of total)

As illustrated by a Q4 2016 forecast by iResearch Consulting Group and Migu of the share of various digital video revenue sources in China, the country’s top video platforms are rapidly shifting their business models away from advertising and toward subscriptions. While subscriptions made up only 3.4% of digital video revenues in 2011, that proportion is expected to rise to nearly a quarter of all video proceeds by the end of this year.

This shift in business models may be one reason for Netflix’s recent high-profile content licensing deal with iQiyi.

—Jeremy Kressmann

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