Tencent to trial paid subscription content in effort to monetise WeChat accounts
Tencent Holding’s share price rose as much as 3.1 per cent on Thursday after the Hong Kong-listed internet giant confirmed that it will soon allow content creators to get paid via subscription on WeChat, China’s most popular social media app.
Tencent on Wednesday said that selected WeChat accounts have already been invited to trial its paid content feature, adding that the service will be open to general users soon.
The paid subscription feature is seen as WeChat’s latest move to capitalise on its 846 million monthly active users to make inroads into the so-called paid knowledge era in China. Currently, WeChat has already positioned itself as a one-stop shop platform, allowing users to chat with friends, share updates and photos in their Moments feed, hail a cab, order food and even pay their utilities.
Getting users to pay for subscriptions is not only a way for WeChat to monetise, since it also increases the amount of time users spend in the WeChat app, according to Neil Wang, president for Frost & Sullivan Greater China.
“Content is going to become the next traffic inlet and Tencent will also try to establish a leading position in the content market with the introduction of paid content in its WeChat official accounts,” Wang said. “The strengthened copyright protection will attract more quality writers and hence expand the user coverage of WeChat.”
Tencent’s share price on Thursday closed up 2.61 per cent at HK$212 on the Hong Kong stock exchange, giving the company a market capitalisation of more than HK$2 trillion and edging out Alibaba Group Holdings’ US$253 billion as the most valuable listed Chinese company.
“A lot of social media apps and services have always been free, but there is always going to be a certain portion of users who are willing to pay a premium for additional services,” said Kitty Fok, managing director of IDC China.
“WeChat launching paid subscription services for their official account is a good way of monetising users who are looking for exclusive content which meets their needs, and Tencent will also be able to gain more user behaviour data to better target advertising or content in the process.”
Statistics from research firm iiMedia showed that the number of official accounts on WeChat jumped from 8.25 million in 2015 to 12.06 million in 2016.
With about 50 per cent of WeChat’s users spending 90 minutes on the app on a daily basis, as well as its wildly popular integrated mobile payments service WeChat Wallet, the social media app is well-positioned to become the most efficient channel to connect high-quality content and potential readers.
However, the number of WeChat users willing to pay for content remains to be seen, especially since there is a common perception in China that online content is largely free.
“Paid subscriptions can help social media platforms better manage their public accounts, as it is difficult to control the quality of free content,” said Wilson Chow, China and Hong Kong technology, media and telecommunications leader of PricewaterhouseCoopers.
Chow added that the paid subscription feature also helps to raise quality of content across social media platforms, since content creators are incentivised to produce high-quality content to attract subscribers.
Some industry insiders believe that the paid content market in China is ready to take off.
36kr.com, a Chinese technology news platform, launched its paid subscription service on Wednesday. “About half of our 80 million users have paid for content, signalling that they are ready for higher-quality content at a price,” said Feng Dagang, president of 36kr media group. Beijing-based 36kr is backed by Jack Ma, founder of e-commerce giant Alibaba, which also owns the South China Morning Post.
A survey of more than 1,700 internet users conducted by a Tencent research unit found 55 per cent of respondents had paid for professional knowledge or advice, including paid content and documents in the past year. Over 50 per cent of Chinese internet users have paid or are willing to pay for content, compared with only 30 per cent two years ago, an iResearch report found.
On Wednesday, US-based technology news site The Information reported that Tencent is in talks to invest in Indonesian ride-hailing company Go-Jek, citing unnamed sources familiar with the matter.
Pony Ma, Tencent’s founder, is also said to be part of a consortium in talks to buy the Four Seasons Resort in Bora Bora, French Polynesia, Basis Point reported on Wednesday. The consortium is comprised of Hong Kong-based private equity fund Gaw Capital Partners and several individuals.