Short-form online videos starting to dominate Chinese screens
Chinese audience will be more than 350 million by 2018, leading to a soaring advertising market and fierce competition among video makers
Short-form online videos are exploding onto China’s millions of mobile screens, and their consumption and share of the advertising market, are expected to mushroom over the next couple of years.
Mark Zuckerberg has called shorter “video a megatrend, almost as big as mobile” on numerous occasions over in the past year – and despite will having Facebook blocked in the mainland, the co-founder of the world’s most popular social network is sure to have China foremost in mind.
Watchers of short-form videos – less that 20 minutes in length – are projected to surge 60 per cent to 242 million in China by the end of this year, predicts an April report by consulting firm iiMedia Research.
By the end of next year, that number’s expected to reach 353 million, topping the US population.
“The rise of short-form videos is the biggest change in the video industry over the past three years,” said Li Hao, chief executive of marketing agency Huox.tv, who told a recent industry conference in August there were just 1.5 billion views in 2014.
“Within three years, on short-video platforms and social media, daily average views are almost 15 billion.”
Over 85 per cent of short-form video watchers are below 35, while 25 to 30-year-olds are the largest age group, according to figures gathered by Ergeng, the Hangzhou-based video producer started in 2014
A separate report by think tank Analysys said in August almost 65 per cent of the audience are tech and e-commerce savvy millennials, located in first and second-tier cities, with high to medium spending power at their disposal.
“With mobile data becoming progressively cheaper, it costs almost nothing to watch videos on smartphones now,” said Lin Guanchao, Ergeng’s chief executive.
Its videos are usually shorter than five minutes, telling engaging stories about grass roots and ordinary people, from the high-school chemistry teachers who raps about the periodic table, to a noodle maker committed to preventing the ancient lamian-making skill from dying out.
Wu Shan, a Beijing student, says she watches at least one short video by Ergeng on China’s Twitter-like social media Weibo daily.
“I don’t have the patience to watch long videos, so short and intimate [videos] are great.
“Every video conveys something warm and touching about human nature and daily life, in a genuine and uncorny way,” said Wu.
Ergeng recently raised over 300 million yuan (US$46 million) in investment, and joins a list of around 30 short video makers who raised at least 850 million yuan last year, according to data from Yixia.com, the operator of popular video-sharing and streaming app, Miaopai.
With 19 billion views so far in total, Ergeng’s revenue from advertising and customised videos in 2016 was just shy of 100 million yuan (15 million), Lin said.
The advertising industry, however, is still relatively wary of short-form films as mainstream platform for their clients.
Just a fifth of advertising buyers have booked space on the fledgling industry so, but Ergeng’s Lin is confident that will grow rapidly.
“Last year alone, professionally generated content overtook user-generated content – that’s why we called 2016 ‘the starting year for short-form video’,” said Lin.
Like Ergeng, most video makers are counting on advertising to pay for their content, as well being paid by viewers.
According to iResearch, China’s online video market income – both short and long-form – expanded 56 per cent annually to 60 billion yuan (US$9 billion) during last year, with half of that ad revenue.
Mobile video is now China’s fastest-growing digital ad platform, and that’s predicted to overtake traditional television spending by 2021, already accounting for 13 per cent of all media ad spend.
To ensure they don’t miss out on the soaring market, China’s internet giants, too, have inevitably been aggressively expanded into the industry.
Tencent Holdings, the world’s top video games company, will pour 1 billion yuan (US$152 million) into subsidising producers of original short videos this year, it said in February.
While video-sharing website Tudou, a subsidiary of e-commerce giant Alibaba, announced in May a scheme to reward the best 2,000 short-videos, with 2 billion yuan in cash.
As a result, competition among video makers, has become cutthroat.
There are currently thought to be upward to 25,000 short video producers tussling for recognition, but the 10 most popular command a quarter of the whole audience, according to an August report by Caasdata.
Competition is fiercest in videos related to food, comedy, and gaming, Caasdata said.
Global IT and networking giant Cisco, meanwhile, predicts by 2020, video will account for 82 per cent of global consumer internet traffic.
Alibaba owns the South China Morning Post