China Online Video Market Hit an All-time High of 12.81 Bn Yuan in 2013

In 2013, revenues of China online video market totaled 12.8 billion Yuan, up 41.9% from 2012. Along with increasing ownership of mobile devices, online video market maintained rapid growth, pushed by high quality of long video contents.

Online Video Market

In 2013, revenues of China online video market amounted to 12.8 billion Yuan, increasing by 41.9% versus the previous year. In the years to come, it is estimated to remain rapid momentum and stand at 36.6 billion Yuan in 2017.

iResearch holds that the revenues of online video market will sustain significant growth from 2014 because online video sector will accelerate commercialization of mobile internet and online video corporations continue to introduce hot copyrighted contents such as TV series, variety shows, sports events while making efforts to develop self-generated contents.

Market Structure

In 2013, share of advertising revenue in the revenues of China online video market is 75.0%. It is the largest one among sources of online video market revenue and is estimated to grow marginally to 77.1% in 2017. 

iResearch holds that, as online video has typical features of media, advertising is still the major method to monetize traffic of online video websites in the coming years. At present, hot and high-quality TV series and variety shows are the most important to guarantee advertising revenues of online video firms, while such contents as animation and sports events are also to some extent raising advertising revenues of online video companies.

For the moment, revenues of online video on mobile device mostly source from advertising. However, along with the growth of video traffic on mobile device and deepening of mobile internet commercialization, the share of non-advertising revenue such as revenue from app store and game center in the total mobile video revenues will expand .

Online Video Advertising

In 2013, online video advertising revenue amounted to 9.6 billion Yuan, approaching 10 billion Yuan and up 46.8% versus 2012. It is estimated to keep rapid growth and hit 28.2 billion Yuan in 2017.

iResearch holds that, the powers to drive up online video advertising revenue sources from the following: Firstly, that good quality contents  such as TV series, variety shows, films, animation and sports events are enriching and the number of advertising in single video is growing gives rise to the increasing orders of advertising; Secondly, the sales ratio of online video advertising in the second tier and below cites is climbing; Thirdly, the rising effects of advertising boost the price of advertising; Fourthly, the commercialization of online video on mobile device leads to the upward advertising revenues.

Among all the formats of online video advertising, in-video ads contribute most to online video advertising revenue, much higher than the cother formats. As the self-made contents are on the rise and the share of contents marketing will rise, the forms of advertising in the online video industry will be more diversified and less concentrated.

Outlooks

In 2013, the traffic of video app on mobile devices saw rapid growth. But on the whole, commercialization of mobile video did not fully start yet. In 2014, mainstream video corporations of online video will comprehensively carry out monetization of mobile video, and the whole industry will conduct in-depth commercialization of mobile internet. Along with the deep development of commercialization of mobile video, it will generate more revenues for online video companies.

Values of self-made contents marketing will further rise in 2014. At the end of 2013, online video companies all stated that they would vigorously develop self-made contents. iResearch analyzes that the self-made contents of online video companies will increase categories and outputs, and improve quality. Although the marketing values of self-made contents will have constant growth, its brand influence and marketing value does less contribution to video companies’ revenue than copyrighted contents in the short term.

Developing internet TV becomes an important development strategy. With the joining of internet companies including some online video firms in 2013, internet TV sector entered into the phase of fast development. iResearch holds that, there are more and more online video corporations expanding into this new filed in the years to come, and TV will be another important carrier of multi-screen marketing for the video companies.

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