After years of drifting to mobile devices and PCs, Chinese audiences are coming back to the living room for entertainment thanks to a new generation of internet-fueled content and technology.
Over the past three years, Chinese web users who had once been drawn away from televisions and towards mobile devices are making their way back to the traditional living room setting for daily entertainment.
Along with the growth of the living room tech market, China is expected to have over 250 million internet-connected televisions by the end of 2017, covering an estimated 700 million viewers, based on households of three members. The market formed around this sector will be worth a whopping RMB 630 billion (US$93 billion) by 2020, according to research institute AVC.
Data from China’s top video streaming site Youku shows traffic from living room screens enabled by over-the-top (OTT) boxes has eclipsed PCs as the second largest traffic source, behind only mobile devices. This is happening much faster than expected, but it’s natural given millennials pay more attention to family life. Moreover, the living room scene is offering more engaging and interactive experiences ranging from video/music streaming, gaming, and shopping.
The demographic change is significant. While watching television was once considered old fashioned, it’s now become a favorite again among young people. A significant 74 percent of users on Alibaba’s entertainment platform, one of the largest in China, were under the age of 35.
It seems that the trend is here to stay, creating huge commercial opportunities for domestic companies. China’s internet giant Alibaba has spread its reaches into the digital living room industry, with the launch of Tmall boxes and a content ecosystem to support it.
The company is increasing its ambition in the area, of which Tmall box or hardware is just a small part. Through cooperation with television manufacturers, Alibaba announced this week its goal to create a premium content ecosystem for the Chinese-speaking community, mainly by capitalizing on quality content from Youku, which it acquired in April this year.
Under the plan, Alibaba’s digital entertainment arm, which claims over 20 million daily unique users to date, will further integrate Youku Tudou’s businesses for synergies in brand, content, data, membership and commercialization plans. Apart from Youku, the partnership involves a star-studded list of content providers from home and broad, such as Disney, BBC, Hasbro, DHX, LEGO, CCTC Animation, and CJ. Educational content has also become as a top focus for Alibaba’s digital living room strategy, given children’s position at the center of family life.
— A version of this article originally appeared on Technode.