Market Insight

Asian online video market intensifies as services revealed upcoming plans at the 2015 ATF

December 05, 2015

Jun Wen Woo Jun Wen Woo Senior Research Analyst – Online Video, IHS Markit

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Asia TV Forum and Market (ATF) 2015 in Singapore was attended by international content sellers for traditional TV and digital distribution and Asian buyers. The conference’s focus was on content acquisition - industry players gathered to discuss acquisition of content across all genres and platforms, as well funding and co-production opportunities.

DJ Lee, president of media content at CJE&M, a South Korean content creation and marketing company, kick-started the conference by talking about CJE&M objective to make the Asian content travel globally. The company initially started by offering mostly western content, but moved into production of its own content in 2006. CJ E&M highlighted that marketing and communications play pivotal role in the creation of digital-only content.

Key messages on the Asia’s online video market discussed at ATF 2015 included:

  • The adoption of mobile devices by the millennials and limited connectivity in developing markets will drive short form videos
  • Chinese online video platforms differentiate by investing in original content, expanding internationally and offering hardware bundling
  • Online video platforms and production companies are looking for co-production opportunities

Head of International at Maker Studio, Rene Rechtman emphasised that millennials are driving a content revolution in the Asia’s digital marketplace. According to Maker Studio’s data, approximately 50% of the population in Asia are millennials who are more likely to go online than other age groups using smartphone. He also stated that by 2017, online video will cover 69% of global internet traffic and it is important to focus on millennials' way of viewing online video and their interest. iQiyi also noted the importance of younger age group. Its content target viewers born after year 1995 and they have found that TV series and animation are the most popular genres among younger generation.

Another point made by Maker Studio was about a new trend in the length of online videos. Videos are getting shorter, driven by high mobile devices adoption. By September 2015, the average length of online videos was just 3.8 minutes compared to 5.1 minutes two years ago. This point was supported by MNC Sky, the largest pay TV operator in Indonesia that claimed to have 70% of the market share. According to the company, internet connection is only available in major five to ten cities and watching video on mobile platforms is still very expensive. These challenges are causing short form video to become more prevalent in the market.

Baidu-owned online video provider, iQiyi continues to focus on original content and it claims to have over 340 million users and more than 5 million paid subscribers (2015 China Network Audio-Visual Industry Development Report released by Chinese Netcasting Services Association (CNSA) shows that iQiyi has reached 10 million paid subscribers by December 1, 2015), while Youku Tudou, which is now a subsidiary of Alibaba Group has approximately 500 million users. Youku Tudou’s current focus is on the subscription video on demand (SVoD) model and the original drama. It is hoping that it could monetise its online video service by producing high quality drama. LeTV Hong Kong talked about its plan to expand to the US and India. 95% of content in India is in local Indian languages, making local partnerships a must for international company to enter the market. LeTV’s is also focussing on production of original content. By leveraging its businesses in manufacturing smart TVs and smartphones, LeTV talked about its plan to differentiate by offering LeTV content bundling with its own branded hardware to customers.

Online video platforms and other production companies in Asia are increasingly looking for co-production opportunities. While Youku Tudou is looking at establishing international partnership with production house for co-production in 2016, Zhejiang Broadcasting recognises the threat by digital platforms and expressed its readiness to embrace the shift and to create more collaboration with digital platforms. GroupM Entertainment, a global media investment management group from Indonesia has allocated budget for original content creation and is looking for long-term partnership with broadcasters and production house in 2016.

Research by Market
Media & Advertising
Category
Digital Media
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