In 2017 and 2018, viewers and user stickiness of short video rose rapidly in China. At the beginning of 2018, short video market structure became steady. Leading platforms start monetization and finished the transition from “traffic accumulation” to “traffic monetization”. At the same time, the traffic of high-quality get the nod of advertisers, content producers, MCN and other participants in the industry chain. Investments from the whole industry chain guarantee the vigorous growth of short video in the future.
In 2018, revenue of short video sector reached 46.71billion Yuan, skyrocketing 744.7%. The high growth can be attributed to the advertising monetization of top short video platforms. In the future, short video platforms’ advertising monetization and other monetization ways all have huge potential in the future. It’s expected that the revenue of short video sector will hit 200 billion Yuan by 2021.
In 2018, the short video marketing market grew fast and the revenue reached 18.79 billion Yuan, an increase of 732.8% YoY. The reason behind the fast growth is that in 2017 and 2018, the top short video platforms set up news feed marketing platforms, creating lots of opportunities to monetize short videos via news feed. and the advertisers are making more budget and the content producers, MCN and marketing service providers are improving their capacity to provide professional short video marketing services. All these are promoting the growth of the revenue.
iResearch believes that the leading short video platforms launched commercial platforms in 2017 and 2018 and monetized them to some extent. Affected by the disappearing traffic dividend of short videos, it will be hard for the emerging platforms in the waist to monetize substantially in the next 2-3 years. As a result, explosive growth is unlikely in a short term and the YoY growth rate will slow down. However, more and more advertisers will try short video content marketing and the platforms will exploit the value of each user, the revenue of short video marketing will keep growing at a fast rate.
Now the short video platform market is growing fast and the new platforms are entering the market. The platforms are not so homogeneous and most of them are engaged in diversified competition relying on their own positioning, contents and target users. However, as the user dividend is disappearing and the market penetration rate is plateauing in the next two years, the?fiercely competitive short video platform market will be reshuffled. Affected by the changes in the industry, there will be three major trends: 1) Integration & elimination, the user traffic will eventually concentrate to the few top platforms and waist platforms in vertical sectors, and as a result, the large number of platforms in the waist and long tail will be integrated or even be eliminated; 2) development of overseas market, after the domestic market is saturated, many platforms will start to explore the blue ocean market overseas; and 3) business expansion, with spare energy and a large scale, the platforms survived the fierce competition are entering the MCN business and directly work with the content providers, to compete for high-quality content resources, to ensure content supply and to enhance their barriers.