OTT Has Huge Potential in China's Advertising Market

Source:iResearch October 12,20173:24 PM
China’s OTT users have increased from 2011 to 2016 with the compound annual growth rate (CAGR) of 90.4%. By the end of 2016, OTT users have been up to about 140 million. According to National Bureau Statistics of China, the CAGR of China’s cable TV users was only 2% and also experienced its first ever decline in 2016. iResearch holds the opinion that the cable TV users would continue to decline. Moreover, OTT terminals would finally replace cable TV to become the main choice for family entertainment.
According to iResearch, China’s OTT advertising revenue increased rapidly from 2014 to 2016. By the end of 2016, the revenue attained 610 million Yuan with the growth rate of 162.6%. iResearch thought that considering the increasing users, the upgrading of industrial chain and more budget from advertisers, OTT advertising market would usher in an explosive growth. Furthermore, the revenue of China’s OTT advertising market was estimated to hit 12, 830 million Yuan by the end of 2020 with the CAGR of over 123.2%.
According to iResearch, the per capita revenue of TV advertising, Internet advertising and especially OTT advertising were respectively 150.7 Yuan, 397.1 Yuan and only 1.5 Yuan. iResearch analyzed that OTT advertising had huge growth potential despite its small revenue now. On one hand, OTT advertising revenue was small because it was just in its infancy and also at the early stage of commercialization. On the other hand, the value of OTT advertising was greatly underestimated. OTT advertising combined most advantages of TV advertising and Internet advertising. If calculated properly, the per capita revenue of OTT advertising would at least exceed that of TV advertising.

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