Lai Lin Thomala
Research expert covering Greater China
Subscription video-on-demand in China - statistics & facts
After years of cutthroat competition, China’s two video-on-demand (VOD) frontrunners have flipped the script to stop losing money. The standard approach of strategic partnerships and exclusive content is not enough for the turnaround; the game changers are high-quality and diverse IPs, complex subscription-based VOD revenue models, and loyalty programs. The industry is also banking on emerging AI tech to help boost its competitive edge. On track to nudge ten billion U.S. dollars by 2029, the Chinese SVOD market is undoubtedly full of exciting news.
Tencent Video, on the other hand, buoyant with the traffic and resources from its parent company Tencent, first started to make profits in 2022. It has the upper hand in American dramas, sports, and documentaries, with exclusive offerings from NBA, HBO, BBC, and Discovery. On top of its reputable historical TV dramas, Tencent Video has also made its name in the suspense, sci-fi, and comedy categories. Clearly, these two heavyweights have a lot of high-quality IPs to offer to the Chinese audience.
On the other hand, pay per view and un-skippable ads, predominantly pre-roll ads, have become a new normal in blockbusters. Apart from differential pricing, various marketing tactics from loyalty programs with membership rewards to offline fans events like studio visits and concerts, as well as peripheral merchandise are on the rise.
Competitive and saturated
While the likes of Netflix and Amazon Prime are blocked by the Great Firewall of China, several players are vying for dominance in this crowded space. iQIYI, Tencent Video (WeTV), and Youku are currently leading the pack, each with over 400 million monthly active users. Mango TV, which has a specialty on variety shows, is regarded by many as the impending equalizer. Other names that have repeatedly popped up are Bilibili and Migu Video.In the middle of a wrestling match
Often dubbed China’s Netflix, iQIYI has earned a reputation for its extensive content library, excellent in-house productions, and effective marketing strategies. Combined with competitive pricing, it ended the business loss trajectory in 2023, with daily subscriptions reaching a record high at 112 million. Its top-charting drama The Knockout achieved a 68 percent market share at its peak in 2023.Tencent Video, on the other hand, buoyant with the traffic and resources from its parent company Tencent, first started to make profits in 2022. It has the upper hand in American dramas, sports, and documentaries, with exclusive offerings from NBA, HBO, BBC, and Discovery. On top of its reputable historical TV dramas, Tencent Video has also made its name in the suspense, sci-fi, and comedy categories. Clearly, these two heavyweights have a lot of high-quality IPs to offer to the Chinese audience.
The playbook: slicing the pie into slivers
These streaming platforms commonly adopt a hybrid paid and ad revenue model, with two or three VIP tiers of subscription as a base. The standard VIP packages offer basic high definition and ad-free videos. Super VIP users can not only enjoy concurrent streaming on multiple devices and discounts on other platforms, but also the speical access to dedicated sections, for instance, the “super TV drama” set from iQIYI and Tencent. For mega-hit titles, super VIP users can even unlock new episodes earlier.On the other hand, pay per view and un-skippable ads, predominantly pre-roll ads, have become a new normal in blockbusters. Apart from differential pricing, various marketing tactics from loyalty programs with membership rewards to offline fans events like studio visits and concerts, as well as peripheral merchandise are on the rise.
