Tencent earmarks US$1.5b in revenue sharing deal to nurture Chinese content producers

Shenzhen-based internet giant is devoting major resources to drive development of original content and attract traffic onto its internet and social media properties

PUBLISHED : Thursday, 09 November, 2017, 10:06am
UPDATED : Thursday, 09 November, 2017, 10:59pm

Chinese technology juggernaut Tencent is on a mission to nurture and profit from Chinese online content creators, supported by its empire of social and entertainment apps.

The company has earmarked 10 billion yuan (US$1.51 billion) in a revenue sharing initiative, under which it will forgo some of its future profits to help support content developers in producing creative works as well as combating copyright plagiarism on its various platforms.

The Shenzhen-based company said the funding would help boost the development efforts of content producers using its platforms, including social messaging apps such as WeChat and QQ, browsers, news aggregators, Tencent Video, app stores and live streaming apps, to drive more original content and traffic onto its sites.

Tencent is also stepping up efforts to incubate online content creators as the pan-entertainment industry is one of the future traffic growth engines, according to Elaine Wang, a general manager of Tencent’s Open Platform and Tencent WeStart – a Tencent incubator and accelerator platform.

The company is planning to open an incubator space in Kwun Tong in May, hosting up to 200 start-ups from Hong Kong and overseas, with a majority of them being content creators.

The social media, news aggregator and other pan-entertainment platforms owned by Tencent are now contributing to daily traffic of 10 billion site visits, according to Wang.

She said that boosting the growth of short video across Tencent’s platforms is now the key for future traffic. By subsidising the developments of these content creators, Tencent will be able to share in their future success, said Wang.

Apart from nurturing online content producers, Tencent has also vowed to step up efforts to combat online copyright infringement. Internet-based content producers in China normally generate much less income as producers of traditional content such as film, music and games, owing to inadequacies in online Chinese copyright laws, Lin Songtao, a Tencent vice-president said during the company’s seventh global partner conference in Chengdu on Wednesday.

The internet has become the dominant medium of distribution for content producers in China, with Tencent itself accumulating more than 13 million business partners of varying levels, producing 25 million jobs in the process, according to Lin.

Lin said Tencent is doing everything in its power to sort out copyright protection with the appropriate authorities, and has stepped up its investment in combating online abuses of copyright infringement.

Tencent is not the only company attempting to fund online content producers. Alibaba Group Holding, which owns the South China Morning Post, announced in April that its online video operator Youku Tudou, Alibaba Literature, and Alibaba Pictures had jointly invest 1 billion yuan (US$150.5 million) to launch “Project HAO,” which aims to provide one-stop services to online movie content creators with an open platform, and copyright and distribution assurance.