Ampere: China Home to Three of the Top Five SVODs

Ampere Analysis is reporting that three of the top five subscription OTT services in the world, in terms of subscribers, are Chinese.

The top three in China are iQIYI (backed by Baidu), Youku-Tudou (backed by Alibaba) and Tencent Video (backed by Tencent), which are well-funded by their cash-rich tech-giant parent groups, collectively known as “BAT.”

Historically, Chinese streamers differed greatly from Netflix, initially relying heavily on advertising revenues, supporting free streaming services. More recently, there has been a shift toward ad-free paid subscriptions. By the end of 2018, the three leading Chinese streamers generated $8 billion in revenue, compared to Netflix’s $18 billion.

Investments in content have enabled these three SVOD services to build sizable content catalogs. Youku-Tudou leads with 13,000 titles, followed by iQIYI at 10,000 and Tencent Video at 7,000.

Service stacking is common in China, as a result of the original and exclusive content on offer. iQIYI offers 250 original and 1,000 exclusive titles, while Tencent Video has 330 original and 1,400 exclusive titles. According to Ampere’s Consumer Q1 2019 data, 44 percent of Chinese internet users subscribe to two or three SVOD services, and 16 percent to all three.

Orina Zhao, analyst at Ampere Analysis, said: “We expect the big three SVOD players in China to continue growing and reach 340 million subscriptions and $12.6 billion in total a year by the end of 2024. Investing heavily in content will continue as the main strategy to drive subscriptions and increase user retention, in which process the strong financial backing from BAT is key.”