Although far from new in China, short video is shaping up to become a bigger battleground for platforms in 2021, with implications for brands and content creators as well.
Douyin, the Chinese version of TikTok, recently gave away a record RMB 1.2 billion ($185 million) as the red envelope sponsor of CCTV’s Spring Festival Gala (by far the world’s most-watched TV program), while Kuaishou is hot off the heels of a $5.3 billion Hong Kong IPO, WeChat launched a short video channel in 2020, and Bilibili reported a 74% increase in net revenues in its third-quarter 2020 financial results.
All of these platforms are cashed-up and intent on spending heavily on incentivizing high-quality content creation to keep viewers engaged and spending via integrated e-commerce functionality.
Netease is the latest to join the fray with its recent announcement of plans to invest RMB 1 billion ($155 million) to support video creators across existing Netease apps for news, social media, e-commerce, music, and education. Founded in 1997, Netease is one of the country’s oldest internet companies, but it hasn’t yet been able to capture the video zeitgeist. Now, it clearly thinks incentivizing creators could give it an edge.
But simply throwing cash at influencers and hoping the audience follows may not be enough to dethrone Douyin and Kuaishou, which together account for an estimated 60% of China’s short video market and aim to spend heavily as they fight to come out on top. In September, Douyin said it would invest $1.5 billion over the next 12 months to help double revenue for creators and diversify their income streams. Kuaishou announced a similar incentivization plan aimed at incubating 100,000 businesses and helping each of them achieve $146,000 in annual sales, while cultivating some 10,000 livestreamers and hosting a million e-commerce broadcasts over the same period.
These platforms are employing multi-pronged strategies to win over audiences with five key pillars: sponsorships of popular events around local holidays; support for the production of higher-quality user-generated content; exclusive agreements with celebrities, influencers, and top creators; expansion into longer-form content such as movies and series; and e-commerce integration, especially through livestreaming.
Kuaishou’s efforts over the past year reflected this approach. The firm gave away RMB 1 billion ($155 million) as the exclusive sponsor of last year’s CCTV Spring Festival Gala, convinced Mandopop legend Jay Chou to launch his first mainland Chinese social media account and grant rights to his music, partnered with JD.com to promote e-commerce livestreaming, and even branched into arthouse cinema with the exclusive distribution of indie director Zhang Wei’s “The Empty Nest” (空巢) last May. Continue to read the full article here