Revenue of China's Online Video Sector Topped 60 Bn Yuan in 2016

Source:iResearch February 08,20172:27 PM
Revenue of online video sector

In 2016, the revenue of online video sector attained 60.9 billion Yuan, surging 56% from 2015. With the growth of viewers and viewers’ loyalty, the commercial value of online video maintains increasing and the revenue is expected to exceed 100 billion Yuan by 2019.
Revenue structure of online video sector

In 2016, advertising revenue accounted for 54.9% in total online video revenue and revenue from paid video contents took up 19.3% with a growth rate higher than the expectation made in 2015. Revenue from other businesses had slight growth and took a share of 24.1%. Copyright distribution continued its decline and share of its revenue dropped to 1.4% due to the fierce competition in content resources. 
Meanwhile, the video companies devoted much in membership business in 2016. They expanded their paying viewers by introducing quality contents, exclusive content and offering pre-pay viewing, and as a result viewers’ payment habit was gradually formed, bringing structural changes to the revenue of online video sector. It is forecasted that user payment will be the second biggest revenue source in online video market and share of its revenue will expand to 38% by 2019.
Advertising revenue of online video sector

In 2016, the advertising revenue of China’s online video sector reached 33.4 billion Yuan with a growth of 43.4%. The new advertising law enhanced the advantages of in-video advertisements, contributing much to the growth of advertising revenue. Meanwhile, video companies actively upgraded the content of their self-made videos and explored new advertising forms such as in-stream advertisements and native advertisements, which eased the conflict between user payment and advertising revenue.
Revenue of China online video mobile advertising

As more and more viewers watch video on mobile devices, mobile video advertising revenue keeps increasing. In 2016, the revenue from mobile video advertising hit 20.6 billion Yuan with a share of 61.7%. The revenue was expected to maintain a high growth rate and its share was estimated to approach 90% by 2019. 
Structure of China online video sector

In terms of revenue and number of viewers, the online video sector presents an inverted triangular structure. The top echelon is consisted of around 5 companies such as iQiYi, Tencent Video and Youku Tudou, holding a market share larger than 70%. The medium echelon is mainly consisted of aggregation video products like Baofeng and Xunlei. They have relatively stable user base while they are faced with continuous challenges in the maturing process of copyright market. 
However, there are five leading online video companies in China. With the content competition becoming fiercer, the Matthew effect will be increasingly significant in online video sector. New comers without capital and user accumulation will gradually die out, while vertical fields like live show and short video still enjoy a large room for development.

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