Tencent and Iqiyi lead China's streaming revolution

China's aggressive 5G rollout—now over 4 million base stations strong—is powering an explosion in streaming, with 5G connections projected to surpass 50% by the end of 2024.

And 5G isn’t just about faster downloads; it has the potential to reshape the entire entertainment landscape. Unlike other Asian markets reliant on international streaming services, China's is a distinctly homegrown affair. A new report by BB Media confirms this, revealing that the top five streaming platforms in China are all domestic. Platforms like Tencent Video and Iqiyi are capitalising on this growth, shutting out global competitors who struggle to gain a foothold in the market.

Three platforms lead with a market share of 22% and 19% each:

• Tencent Video: Leading the charge with 110.10 million household penetration despite a reported dip in Q2 2024 streaming revenue, indicating the market's volatility even for the leader.
   
• iQIYI (Baidu): A close second with 102.73 million households, boasting an annual revenue of approximately 32 billion yuan ($4.5 billion) in 2023.
   
• Youku (Alibaba): Holding strong in third place with 91.63 million households, despite a $1.2 billion goodwill writedown in February 2024.
   
• Mango TV: Securing the fourth spot with 69.83 million households, Mango generated around 10.6 billion yuan ($1.5 billion) in online video revenue in 2023, demonstrating consistent performance.
   
• Yangshipin: A rapidly growing force in the new media sector, with 52.70 million households already using this streaming platform. Their broadcast of the Paris Olympics attracted massive viewership.

Consumers shun account sharing

An interesting trend that emerges from the report is on account sharing.

Defying global trends of rampant account sharing, Chinese consumers show a higher propensity to pay for individual subscriptions. Account-sharing remains remarkably low, hovering between 14% and 17% on most platforms. Even Mango TV, with the highest sharing rate among the top five, only reaches 19%, below global averages where password sharing is rampant in nearly half of the streaming subscribers.

This disciplined approach to subscriptions drives the profitability and potential of the Chinese streaming market, creating a unique ecosystem that is dominated by domestic players powered by the widespread adoption of 5G technology.

Mobile trumps TV and tablets

Mobile reigns supreme in China's streaming kingdom. Mirroring trends across the APAC region, Chinese consumers favour smartphones for consuming online content; an aspect new streaming platforms with ambitions in China must understand and tailor content to accordingly. This mobile-first landscape is dominated by telecom giants China Mobile, followed by China Telecom and China Unicom.

The report highlights the vast growth potential of the Chinese streaming market, which is entirely dominated by domestic players. This creates a double-edged sword for new entrants. On one hand, stringent government regulations and rigorous censorship policies create formidable barriers to entry. International platforms like Netflix face challenges, as content deemed 'immoral' by the government can disappear overnight.