Several of China’s major video platforms recently announced their 2019 annual results, offering insights into the sector’s development and prospects. Though video streaming continued to be an unprofitable business last year, all platforms have seen a recent surge in viewership as a result of the coronavirus lockdowns that started in late January, and are expected to be at least partially sustained throughout the year.
Tencent Video reported a slowdown in the growth of both revenue and subscribers, which were attributed to delays in broadcasting key content. Subscriptions rose to 106 million from 89 million at the end of 2018, an increase of 19.1%. Tencent sounded a confident tone regarding expansion into short-form video, noting that the company also overcame a “late start” in long-form video to become a market leader.
IQiyi maintained a slim lead over Tencent in its subscribers, which at 107 million represented a 22.3% increase over 2019’s figure, but that still represents a significant ramping down from the heady pace seen in the previous year, when subscribers grew by 72%. The platforms revenues are getting closer to keeping up with its heavy spending on content — revenues were up 7% year-on-year in the fourth quarter, while content costs fell by 13% in the same period, with a substantially smaller loss for the period (RMB 2.5 billion vs. 3.5 billion in Q3 2018). Controlling spending while boosting subscriber drives through brand partnerships and enhanced offerings for potential advertisers are key areas for 2020.
Although a much smaller player, Bilibili has been most successful in creating a sense of community around its platform, which originated in the ACG (anime, comics and games) subculture but has gained broader appeal among the Gen Z and millennial audiences. Bilibili reported RMB $288.4 million in fourth-quarter revenues, representing a 74% year-on-year increase, an average of 130.3 million active monthly users (up 41%) and 8.8 million average monthly paid members, double the number from Q4 2019. Quarterly net losses more than doubled, however, from RMB 190.8 million ($27.07 million) to RMB 387.2 million ($55.6 million), as Bilibili increased its investment in marketing and high-quality content such as its New Year’s Eve concert and an exclusive streaming agreement for the League of Legends World Championship in China. For the full year, adjusted net losses were RMB 1.08 billion ($155.3 million), up from RMB 377.4 million in 2018.
*Alibaba does not report subscriber data or separate financial results for its video subsidiary Youku, another major video streaming service.
– This article originally appeared on CFI’s sister site Content Commerce Insider.