The CCI Guide to Streaming Platforms in China - Content Commerce Insider Sky Canaves and Avery Booker May 2020 - Squarespace
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The CCI Guide to Streaming Platforms in China Content Commerce Insider Sky Canaves and Avery Booker May 2020
3 Introduction
5 Streaming Video in China: A Primer
8 Key Features of the
Chinese Streaming Video Market
12 The Seven Major Players
25 Best Practices
29 The Future of Streaming
in Light of a “New Normal”
33 Thank You & How to Reach CCI
2
Introduction
3
Welcome In the most effective types of content commerce, the brand
takes a subtler supporting role than in years past, and audi-
Welcome to the inaugural Content Commerce Insider ences may not even be aware of its presence until the end
Guide to…, a series developed for brand managers, content credits.
marketers, agencies, producers, and anyone interested
in the global implications of China’s ever-changing Nowhere has this trend seen greater innovation than in
and increasingly important content commerce market. China, where digitally native consumers are discovering,
buying, and promoting brands via interactive content,
But first, what exactly is “content commerce”? In short, e-commerce livestreaming, short video, esports platforms,
content commerce is the merging of content (anything augmented reality and virtual reality—all infused with seam-
from television programs or movies to livestreaming or less shoppability.
digital publications) with on- or offline commerce.
For brands, producers, or agencies looking to better under-
Often referred to “brand-supported content,” content com- stand what works in China and how it may apply to their
merce differs from traditional “branded content”—exemplified global strategy, the Content Commerce Insider Guide to…
by traditional advertisements featuring celebrities or influenc- series provides foundational knowledge of the companies
ers—in that the goal is to ease the path of purchase for specific and trends that matter, presented for those new to the mar-
communities through entertaining and high-quality content, ket and more seasoned China hands alike.
in which the promotional messaging is creatively camouflaged.
We turn first to streaming video in China, a market that has
Well-known examples range from the print magazine Colors exploded from RMB 2 billion ($282 million) in revenue in
(published by the Benetton Group since 1991) to the 2019 2009 to an expected RMB 156.6 billion ($22 billion) in 2020.1
Dove Men + Care-produced documentary “Dads” (directed
by Bryce Dallas Howard), sporting events like the Nike-
sponsored #Breaking2, or podcasts such as General Electric’s
“The Message.”
Acknowledgements and Welcome 4
Streaming Video in China: A Primer Nowadays, content strategies are converging as these plat-
forms move away from spending on imports—which may
While the U.S. market has just started to experience its be subject to restrictions from state regulators—and invest
“streaming wars,” with contenders such as Disney+, Apple more in original productions, jumping on the latest domes-
TV+, Amazon Prime Video, and others aiming to chip away tic programming trends (often at the same time).
at the dominance of Netflix, China has long offered a more
diversified ecosystem for online video content, with no The big three also face competition from smaller services
single service yet coming close to attaining a market share that have upped the quality of their original programming,
comparable to Netflix’s 87%2 in the U.S. such as Mango TV, Bilibili, Sohu, and Xigua Video (Douyin/
TikTok owner Bytedance’s foray into longer-form video).
Netflix doesn’t operate in China. Instead, the bulk of the
domestic market is split between iQiyi, Youku, and Tencent A New Normal
Video, known collectively as Aiyouteng (爱优腾), which are Chinese streaming video platforms find themselves at a
respectively controlled by the country’s “big three” internet critical point in 2020. The Covid-19 outbreak, which began
companies: Baidu, Alibaba, and Tencent (aka “BAT”). in Wuhan at the end of 2019 and ultimately spread beyond
the city’s borders to become a national (and ultimately
Just a few years ago, it was relatively easy to differentiate global) health crisis, led to extended quarantines in which
between the services and their specific content emphases. Chinese citizens found themselves housebound for weeks.
While all had some original programming, much of their
appeal came from licensed content: Spending the majority of their time indoors, audiences—
cut off from cinemas and other social activities—turned
• iQiyi had the hottest Korean dramas and movies. in droves to streaming video to pass the time. With movie
• Tencent had HBO shows, the best of Britain, and NBA theaters shuttered, streaming platforms debuted 26 films
games. online during the Lunar New Year holiday week, with aver-
• Youku was first on the scene, but briefly fell behind in age daily views of these movies twice that of the average in
the bidding wars for overseas content. 2019.3
Acknowledgements and Welcome 5
Although most of these films were produced to go straight film generated 63 million paid views in the first three days
to streaming, studio Huanxi Media made a historic move alone.7
when it opted to cancel the theatrical debut of its highly
anticipated comedy sequel “Lost in Russia” (囧妈)4 and According to iQiyi, which distributed “Enter the Fat Dragon”
release it for free online, the first time a major studio pic- on its VIP early-access platform, the company expects paid
ture premiered on streaming sites. early access “to serve as a healthy development model for
the film sector, under the basis that platforms can attract
Distribution came through its own fledgling platform and more users by providing high-quality content, users are
Bytedance’s far more popular apps, which include Douyin, more willing to pay for high-quality films while film pro-
Jinri Toutiao, and Xigua Video. ducers launch more high-quality work with the platforms’
support.”8
It was a big win for Huanxi, Bytedance, and audiences, who
viewed “Lost in Russia” more than 600 million times in the Although the coronavirus outbreak is easing in China as of
first 72 hours following its release.5 The move was part of a May 2020, things are far from back to normal, and stream-
RMB 630 million ($89.3 million) deal between Bytedance ing platforms are expected to see continued growth this
and Huanxi that will see the two companies work together year in terms of viewer acquisition, brand investment, and
on future productions and create a joint streaming plat- overall revenue.
form—a clear signal of Bytedance’s ambitions to move
beyond short video and into more high-quality, long-form China Strategies, Global Implications
content. For companies interested in tapping the soaring demand
for streaming video in China, content tailored to local audi-
Another film that had been bound for cinemas, “Enter the ences now provides opportunities for brand integrations
Fat Dragon” (肥龙过江), was released via Tencent Video that speak directly to consumers.
and iQiyi on February 1, though not for free but as part of
the platforms’ transactional video on-demand services
for paid subscribers.6 Tencent Video reported that the
Acknowledgements and Welcome 6
To develop appropriate marketing strategies, it is important
AVERAGE DAILY TIME SPENT to understand the relative advantages each platform offers,
ON STREAMING VIDEO PLATFORMS as these can help drive decisions on potential placement,
January 24–February 2, 2020 sponsorship, and integration opportunities.
120
This is designed to be a primer on streaming platforms in
China, to highlight strengths and weaknesses while provid-
100 ing context and case studies. Our goal is to illustrate why
these platforms are successful in China and how best prac-
tices may be applied globally.
80
Minutes Per User
The global epidemic that has kept audiences glued to
60 on-demand film and television programming around the
world makes this even more relevant now, shaping what
may become a “new normal” in terms of consumer habits
40
and expectations for years to come.
20
0
Bilibili Mango TV iQiyi Tencent
Source: Maoyan Entertainment
Acknowledgements and Welcome 7
Key Features
of the Chinese
Streaming Video
Market
8
China’s streaming video market, while sharing similarities Chinese productions rely more heavily on
with those of Western and other East Asian countries, has advertisers and sponsorships than their
emerged and evolved in a unique way, shaped largely by the Western counterparts.9
particularities of the heavily regulated media system of the
People’s Republic of China. Brand money is often integral to funding productions,
rather than “rainy day money” for production extras. In
Despite the often intimidating and labyrinthine nature of some cases, non-scripted shows will start airing10 while the
China’s media, marketing, and advertising ecosystem, five producers seek to recruit additional sponsorship support,
key features of the streaming video market provide a funda- hoping that strong viewer numbers will help draw more
mental starting point for brand marketers and managers. brands.
Brand integrations, including product All of the major streaming video platforms
placements on scripted series, operate in China offer free, ad-supported versions,
on an ad-buying model controlled by the and increasing the number of paid
platforms. subscribers has been a priority as content
costs rise and traditional advertising
This is very different from industry practices in the United revenues fall.
States, where brands more often work directly with pro-
ducers to place products into shows and often no money In the drive for paying members, streaming services often
changes hands. team up with other major companies to offer discounted
joint memberships, such as a recent partnership between
Brands in China pay—often handsomely—for varying Tencent Video and retailer Suning. In one promotional
levels of exposure, and their broadcast presence is counted deal, consumers were offered dual VIP member status for
in seconds. only RMB 98 ($14) for one year, compared to RMB 497 ($70)
for memberships purchased separately.
Key Features of the Chinese Streaming Video Market 9
Tencent has given existing members opportunities to the Covid-19 epidemic.
watch episodes of popular shows in advance for additional
fees, which has drawn the ire of some viewers. Most drama series are released in a single
season with a large number of episodes
There is far more content sharing across available over a condensed period of
platforms than in Western markets. several weeks.
The Chinese market abounds in deals between rival This system encourages a sort of binge-watching, but does
streaming services, as well as with major satellite networks, not extend audience anticipation, engagement and devel-
so it’s not uncommon to see several of the top-rated shows opment over many years in the way top Western series such
running on at least one satellite channel and one or two as “Game of Thrones” or “Homeland” are able to.
streaming platforms. In some cases, shows are co-produced
by a network and streaming service, while in others one This partly reflects an emphasis on short-term gains at the
party will license the content from the other. expense of carefully thought-out productions, and it is com-
mon to see popular celebrities as the main draw with pro-
A good example of this form of content swapping or ducers depending on the “fan economy” to draw viewers.
replacement occurred around the 70th anniversary of the
founding of the People’s Republic of China in October 2019, Reality shows are more likely to air over an extended period
during which streaming sites set aside their own content to and, if successful, will be renewed for multiple seasons.
offer officially approved television programs11 with themes
that celebrated the nation.
A more recent example of content sharing is the aforemen-
tioned debut of “Enter the Fat Dragon” on the early-access
services of rival platforms Tencent and iQiyi in February
2020, after the film’s theatrical release was cancelled due to
Key Features of the Chinese Streaming Video Market 10The Censorship Minefield delay releasing new shows, and focus on more Covid-19
news programming. Even as the country was returning
of China’s Media Industry to some semblance of normalcy in early April, the tradi-
tional Qing Ming holiday to honor the dead brought about
One distinguishing factor of China’s media and entertain- another temporary halt to entertainment programming for
ment market is that rules and regulations can change with a 24-hour period.
little or no advance notice, leaving producers racing to
catch up. When considering working with a streaming video plat-
form in China, it is important to keep in mind that delays
Restrictions on content are common particularly around may occur due to government crackdowns on content or
politically sensitive times. In 2019, this meant a crackdown advertising—it is, and has always been, a part of doing busi-
on “overly entertaining” content in the run-up to the 70th ness in the People’s Republic.
anniversary of the founding of the People’s Republic of
China in October, which caused a delay in some film and
television debuts.
The climate of restriction was not limited to the anniversary
either, as authorities issued a slew of regulations cracking
down on content both before and after the big date. These
ranged from prohibitions on certain types of content in
youth programming to plans to strengthen supervision
of livestreaming e-commerce broadcasts and live perfor-
mances.
During the 2020 Spring Festival period, authorities ordered The film “Better Days” saw its release date delayed several months due to the
crackdown on “overly entertaining content” in late 2019.
media outlets to tone down their entertaining content,
Case Study 11Streaming
Video Platforms:
The Seven
Major Players
12The Chinese media landscape and streaming video ecosys- other streaming services such as Sohu and Le.com.
tem is in a constant state of flux, with new players both large
and small constantly entering (and exiting) the market. User base
However, in recent years seven key platforms have engaged 538 million monthly active users and 107 million
in a fierce battle for market share. subscribers (99% paid), as of December 2019.
iQiyi Content focus
iQiyi leads the Chinese market for online dramas and
Background original films. The service moved away from a reliance on
Founded in 2010 by internet search giant Baidu (NASDAQ: Korean content in the aftermath of a politically-driven ban
BIDU), iQiyi (NASDAQ: IQ) is most often referred to as the on most things South Korean back in 2016, and has more
“Netflix of China.” This is not an entirely accurate compar- recently promoted its own blockbusters, such as the hit
ison, since iQiyi is controlled by a larger tech firm, offers political costume drama “The Story of Yanxi Palace” (延禧攻
a free, ad-supported viewing option, and is worth far less 略).
than Netflix.
iQiyi is leading a push into interactive video—it launched
But Baidu’s fortunes have fallen as a result of declines in a pilot for an interactive drama in June 2019 and produced
the broader ad industry fueled by an economic slowdown the first interactive online video ad two months later.
(which is only likely to get worse in the aftermath of the
coronavirus), and the trend has been for the remaining ad Major hit
money to move away from search. Baidu’s reputation has Hip-hop talent competition “Rap of China” (中国有嘻哈 / 中
also been hit by repeated scandals involving its paid search 国新说唱).
results.
Strengths
Over the long term, it remains to be seen whether Baidu’s Commitment to content spending (both original IP and
troubles will affect iQiyi’s budget, as has been the case with licensing) has emphasized the development of new formats
Streaming Video Platforms 13that bring subcultures into the mainstream, such Rap of China: A Case
as the streetwear-focused reality show “Fourtry” (潮流合 Study in Gen Z Branding
伙人). The focus on interactive content can also leverage
Baidu’s expertise in AI to collect and analyze relevant con- 2017 was a breakout year for iQiyi, thanks to its wildly pop-
sumer data from viewers. ular talent competition “Rap of China.” The show was an
instant hit following its debut in June of that year, racking up
Weaknesses more than 100 million views within four hours (reportedly a
Parent Baidu lacks the expansive, multi-platform digital record for reality programming), and a staggering 2.68 billion
footprint of rivals Alibaba and Tencent and looks to be views on iQiyi by the end of its 12-week run.
past its prime, with some suggesting that it’s time for the
“B” in BAT to be replaced by TikTok parent Bytedance, the “Rap of China” has been credited with bringing hip-hop and
super-unicorn now estimated to be worth more than twice rap into the mainstream in China. It is a talent competi-
as much as Baidu. tion, but not necessarily filled with unknowns. At least in its
first two seasons, the competition pitted some of the most
respected rap and hip-hop artists from underground scenes
around the country against one another in one-on-one
battles and displays of freestyle skills. Celebrity judges, led by
pop star Kris Wu, drove much of the early appeal of the show
among its target audience, young Chinese of the “post-95”
Gen Z demographic (viewers born after 1995).
The concept itself was described as “kind of a gamble” by
iQiyi’s commercial marketing director, Kevin Cao, with the
streaming company reportedly investing more than $30 mil-
lion in the show. (Although that sum was recouped through
14ads and sponsorships, which brought in almost $46 mil-
lion.) The title sponsor of the first season, Nongfu Spring
Vitamin Water, reportedly paid as much as RMB 150 million
($21.8 million) to integrate the brand into the series.
Season one launched with a handful of sponsors: In addi-
tion to Nongfu, McDonald’s and Absolut Vodka were the
main brands featured in the first episode. Sina Weibo was
the official social media partner and streaming services QQ
Music, Kugou, and Kuwo were music partners. As the show
became a huge cultural phenomenon, several additional
brands signed on, most notably Xiaomi mobile phones,
Douyin (TikTok), and Chevrolet. Sponsorship fees in the to its Chinese name and an apparent commitment by the
first season reportedly ran from RMB 30 million ($4.4 mil- producers to promote a more sanitized version of hip-hop
lion) for official products to RMB 150 million ($20.9 million) culture. Sponsors in season three used a variety of innova-
for the title sponsorship. tive techniques. Baidu UMoney leveraged the current vlog
trend to tell contestants’ stories, while War Horse Energy
The second season was reported to have drawn twice as Drink portrayed itself as a “boss” character that performers
much in sponsorship funding, although iQiyi did not dis- had to challenge and hosted concerts, and Clear Shampoo
close figures. Seasons two and three saw an uptick in brand introduced the first interactive native video ad featuring
involvement, with about eight brands involved as sponsors rappers from the show engaged in a musical battle.
in addition to Weibo and the music partners—even as the
program’s future faced considerable uncertainty in the In total, iQiyi has seen its licensing increase from around
wake of Beijing’s so-called “hip-hop ban” in 2018. 200 SKUs in the first season to more than 500 by season
three.
Ultimately, the show was allowed to go on with a change
Case Study 15Youku some of the most popular and critically acclaimed original
content, including the top variety show (“Street Dance of
Background China,” 这!就是街舞) and the best-reviewed drama (“Longest
The OG “Chinese Youtube” launched in 2006 as a hub Day in Chang’An,” 长安十二时辰) of summer 2019.
for user-generated content (and plenty of pirated videos
thrown in) and was listed on the New York Stock Exchange Major hit
in 2010. At its peak, Youku was the top online video plat- Gritty detective drama “Day and Night” (白夜追凶).
form in China, a position it boosted through a merger with
rival Tudou in 2012. Alibaba (NYSE: BABA) acquired the Strengths
company in 2015 and took it private. Opportunities for e-commerce integration on Alibaba’s
Taobao and Tmall platforms are expanding, and Youku is
User base poised to reap rewards as the current vogue for “livestream-
Alibaba doesn’t disclose user numbers for Youku, but ing + e-commerce” moves onto its platform with more
reports that average daily subscribers increased by 59% entertaining content. The platform announced a drama
year-on-year in the last three months of 2019. It had 30 content deal in February 2020 with BBC Studios for “the
million paid subscribers at the end of 2016, the last date extended licensing of the entire four seasons of Sherlock,
such a figure was released by the company, and around 81 and the agreement for over 80 hours of BBC Studios drama
million by late 2019 according to third-party estimates. programming,” which will strengthen Youku’s British drama
offering.12
Content focus
Original content has long played a big role for the streaming Weaknesses
service. Prior to Alibaba’s acquisition, Youku was subject to Youku lags behind iQiyi and Tencent Video on spending,
shareholder scrutiny and lacked a deep-pocketed parent and there have been recent rumors of further cutbacks,
company to fund bidding wars for overseas content. It has along with some uncertainty regarding the future of
regained some ground with licensed content such as “The Alibaba’s entertainment sector ambitions following the
Advisors Alliance” (大军师司马懿 ) and has also created retirement of Jack Ma in late 2019.
16Tencent Video sponsored by electronics brand Oppo and developed under
license from South Korea’s CJ E&M.
Background
Launched in 2011, Tencent Video now competes closely Strengths
with iQiyi in terms of paying subscribers. Over the years Parent Tencent owns major businesses across the enter-
it has shifted its strategy from spending on overseas con- tainment sector—in music, gaming, literature, and film—and
tent to developing original content that ties into parent uses popular IP developed in one sector across others,
Tencent’s (SEHK: 0700) holdings in gaming, literature, leveraging the “fan economy” along the way. It also owns
music, and sports. the dominant social media platform WeChat, with an enor-
mous user base to draw upon. Tencent Video has moved
User base to add new monetization streams by charging subscribers
540 million monthly active users, 106 million paid for early access to new episodes of their favorite shows, a
subscribers. decision that initially drew complaints from viewers but has
since become increasingly commonplace.
Content focus
International content was once Tencent Video’s forte: Weaknesses
whether foreign-language film and dramas, overseas shows Tencent Video’s original content lacks some diversity com-
licensed for Chinese remakes, or exclusive partnerships to pared to its rivals, and the reliance on the “fan economy”
broadcast NBA games live in China. As with the competi- depends on young viewers, many under 18. Though this
tion, priorities have shifted markedly in recent years, and demographic is willing to spend to support their favorite
original content now prevails, especially in the areas of celebrities, it lacks the purchase power of older consumers.
reality shows and programming based on IP from Tencent’s
literature and ACG (anime, comic and games) businesses. While WeChat remains the dominant social media app in
China, it is also becoming more associated with daily life
Major hit and work, and less as a destination for entertainment, fac-
Girl-group talent competition “Produce 101” (创造101), ing a challenge from platforms such as Bilibili and Douyin.
17Mango TV Murderer” (明星大侦探), a licensed adaptation of “Crime
Scene” by South Korean broadcasting company JTBC.
Background
Established in 2008 as the online presence for the provin- Strengths
cial Hunan Broadcasting System, which is China’s second As the exclusive online destination for HBS, Mango has
largest TV network after the centrally operated CCTV. a steady stream of high-quality, big-budget productions
HBS’s national network, Hunan Satellite TV, has played a available for far less than what rivals pay for similar types
pioneering role in the development of higher-quality con- of content. As a result, it is reported to be the only one of
tent on Chinese television over the past 20 years. China’s major streaming video services to turn a profit.
Mango TV has recently come into its own, and is now often In August 2019, Mango TV announced its “Big Mango Plan”
discussed alongside its larger rivals in reports about China’s (大芒计划) for collaboration with internet celebrities and
streaming video market. idols, and which would also serve as a new platform for
emerging stars to promote their original content.
User base
130 million monthly active users, 18 million paid For its part, Mango plans to offer guidance on content
subscribers. management, opportunities to appear on its original shows,
and brand partnerships. The plan is intended to address a
Content focus perceived decline in the effectiveness of China’s KOLs (key
Although it was originally established as a platform to host opinion leaders) as a marketing tool.
HBS programs, Mango is building an independent reputa-
tion for creating a buzzworthy flow of its own dramas and Weaknesses
reality shows. Mango operates on a much smaller scale than its three big
rivals, and its connection with the Hunan provincial net-
Major hit work limits its ability to draw content from other sources.
Celebrity murder-mystery reality show “Who’s the
18Bilibili also investing in content creators with a particular empha-
sis on the current vogue for vlogs in the Chinese market.
Background
Despite its youthful orientation, Bilibili (NASDAQ: BILI) is While comparisons to Youtube (which has been blocked
one of the old-timers in this industry, having celebrated in China since 2009) are common, Bilibili has a unique
its 10th anniversary in June 2019. Bilibili is the central hub user culture, does not run intrusive ads before or during its
for China’s ACG (anime, comic and games) subculture, and videos, and has no plans to change the status quo. Brands
became somewhat notorious for requiring users to pass a seeking to reach its young, hip audiences have to be savvier
100-question “geek test” in order to become “official mem- in their efforts to gain and maintain their attention, either
bers” with additional privileges on the platform. Bilibili is by launching their own channels with entertaining content
also a creative hotbed for China’s active meme culture. or through collaborations with established creators.
User base Major hit
130.3 million monthly active users, 8.8 million paid Street-food documentary series “Story of Chuan’er”
subscribers. (人生一串).
Premium members who have passed the 100-question Strengths
exam enjoy more benefits, while paid subscribers who have A highly engaged and loyal community of users who appre-
not passed the test have limited access to some interactive ciate its unique content offerings, along with fast-rising
features such as bullet comments. revenues and potential for further growth. Bilibili’s young
user base has been instrumental in the company attracting
Content focus the attention of major investors, including both Tencent
Bilibili’s members are its primary creators, but outside of its and Alibaba.
original ACG orientation, the network has more recently
gained acclaim for original documentary content that In April 2020, Sony Corp. purchased a 4.98% stake in
appeals to an emerging class of foodies and travelers. It is Bilibili for $400 million, in an all-cash deal that will see the
19companies collaborate in market segments such as anime
and online gaming.13
During the Covid-19 epidemic, Bilibili showed itself to be
largely resistant to a slowdown, with executives saying
negative impacts were minimized due to resilient demand
for video games and livestreaming, two pillars of Bilibili’s
business.
Weaknesses
A relatively small user base, though Bilibili has announced
that it would ease its membership test requirements, pav-
ing the way for a rise in paying subscriber numbers.
Bilibili listed on the Nasdaq in March 2018
20Bilibili: A Rising Star
Bilibili is a key platform for young audiences. Gen Z users
currently account for over 80% of Bilibili’s user base, and as
of the first quarter of 2020, more than 68 million “official
members” have passed its somewhat notorious 100-ques-
tion “geek test.”
A defining feature of Bilibili is “bullet chats,” user-submit-
ted comments (弹幕, danmu, literally “bullet screen”) that
stream across the screen in real-time as videos play. From
January 1 through November 30 of 2019, a total of 1.4 billion
bullet chats were posted, an increase of 40% over the previ- memes in order to draw more comments and land a higher
ous year, highlighting the rising engagement among users position on Bilibili’s rankings.
on the popular platform.
Promotional events and collaborations may offer another
According to Bilibili, “A key reason for the growing popu- path to commercializing popular memes. Bibilibil devel-
larity of bullet chats is they foster a highly interactive and oped a supplementary campaign to celebrate the top
enjoyable viewing experience that allows users to make bullet chat, “AWSL” (which stands for “a, wo si le!” (啊，我死
connections with others online who may share similar aspi- 了!, literally, “ah, I’m dying!”), including a dedicated topic
rations and interests.” page with an online game that gave users the chance to
win a co-branded gift box by pen-and-pencil maker M&G
The viral effect of bullet chats offers opportunities for Stationery. Bilibili also launched a user competition to
brands to tap into cultural trends among young Chinese personify “AWSL” into an anime-style character, which pro-
consumers. For example, some creators have reportedly vided further opportunities for brand engagement.
produced videos around the most popular bullet chat
Case Study 21Sohu Video Major hit
“Driving You Home” (送一百位女孩回家), a reality series
Background about the lives of urban women.
Owned by one of China’s first big internet companies, web
portal Sohu (NASDAQ: SOHU), this video site was one of the Strengths
biggest players in the online video market just a few years Well-developed channels for producing original content
ago, paying top dollar for hit foreign series such as Netflix’s targeting specific audience groups.
“House of Cards.” But that spending exacerbated losses
incurred by parent Sohu, which fell behind as its compet- Weaknesses
itors poured attention and funding into mobile, and has Smaller audience numbers create a challenge to reach a
forced a change in strategy for the video service. mass audience, and Sohu is unable to compete with the vast
resources of its competitor, limiting its access to exclusive
User base content. For example, it shared distribution of the second
No recent data is available, but it reported 39.6 million season of “Well Intended Love” with Tencent Video.
monthly active users in August 2018.
Content focus
Sohu Video announced a “small and beautiful” content plan
in 2018 to emphasize self-produced shows with lower bud-
gets, eschewing expensive celebrities and licensed content.
This year it has updated its strategy to include short-video
projects as well. Some of its series have been critically well
received, such as “Well Intended Love” (奈何BOSS要娶我)
which has been picked up by Netflix for overseas distribu-
tion.
The cast of “Well Intended Love”
22Xigua Video 2020, Xigua announced a content deal with BBC Studios
that will give it access to documentaries, children’s pro-
Background gramming, and dramas.
Launched by Bytedance in 2016 as Toutiao Video and
rebranded one year later, Xigua has primarily served as a Major hit
platform for user-created short videos. The name Xigua, Interactive problem-solving variety show “Top Task” (头号
which means “watermelon,” refers to the popular Chinese 任务).
term “watermelon-eating crowd” (吃瓜群众), or onlook-
ers who just want to watch events unfold without getting Strengths
involved. Key factors that distinguish Xigua from Douyin With Bytedance’s formidable AI behind it, data collected
(TikTok) are the longer length of user videos (at least several directly from Xigua Video users can be used to guide pro-
minutes long, vs. Douyin’s 60 seconds), their organization duction of original content. Bytedance has also shown
into distinct categories (making it easier to find videos by how capable it is of spending heavily to acquire users, with
topic or interest), and less of an emphasis on setting videos a track record of success at home with Douyin and news
to music. aggregator Jinri Toutiao, and globally through TikTok.
User base Xigua app downloads surged by 77% in the week that
169 million monthly active users, all unpaid, as of mid-2019. Bytedance announced its deal to distribute “Lost in Russia”
through its platforms, and it has continued to maintain the
Content focus momentum through the first quarter, bringing its monthly
Xigua may be going through a transitional phase as the active users to an estimated 270 million as of April 2020.
service branches out from user-generated short videos and
livestreaming into developing its own reality shows and Weaknesses
original dramas, but generally with shorter episodes than Users tend to come to Xigua for humorous videos, and
traditional programming. This comes as Douyin is testing reliance on algorithms to promote content could limit the
longer short-video options with some of its users. In April diversity of what viewers are offered.
23Interactive Q&As Becoming a 2020 Trend Since its launch, Xigua Video’s interactive Q&A program “Top Hero” (头号英雄) has covered more than 1,800 topics across 20 themes—among them astronomy, geography, humanities, history, and daily life—giving audiences the ability to engage with experts and celebrities alike in near real-time. In January 2020, in the midst of the Covid-19 outbreak in mainland China, “Top Hero” ran a special episode on the epidemic with help from the National Radio and Television Administration’s Internet Office. The episode gave the general public the ability to get real input from experts on the questions they were most concerned about, such as the symptoms to watch out for, the best way to wear protective masks, and how to prevent infection. The Chinese-language press has lauded “Top Hero” for the way the platform encourages meaningful knowledge trans- fer and dialogue between audiences and subject matter experts (or celebrities and their biggest fans), addressing areas of real concern while helping to squelch rumors and offering an entertaining user experience. Case Study 24
Working with
Streaming Video
Platforms:
Best Practices
25For the past several years, skeptics have doubted the value content that incorporates trends that matter to your target
of streaming video platforms in China for brands aiming to customer is a best practice used by brands both inside and
reach younger audiences who have increasingly flocked to outside of China to increasingly lucrative effect.
livestreaming and short-video apps. Yet programming on
the aforementioned platforms remains massively popular, Intelligent Product Placement Is a Must
indicating that long-form streaming video is here to stay.
Hundreds of consumer goods, luxury, and fashion brands
The following three best practices are the golden rules for have turned to product placement on streaming television
marketers, brands, or agencies considering working with shows and movies to get in front of Chinese audiences
China’s streaming video platforms: over the past two decades. Although an effective way to
increase awareness, product placement can be a minefield
When it Comes to Ads and Dedicated for brands whose integrations come across as awkward or
Channels, Content is King irrelevant to the broader storyline.
Chinese internet users love watching videos online, and
have shown little resistance to viewing advertisements as As audiences turn to [digital video platforms] over
long as they are creative and/or strike some kind of emo- traditional forms of entertainment, product place-
tional chord. It is for this reason that many if not most ment and brand integration are essential tactics for
major international brands have been quick to turn to brands to reach audiences without 30-second spots.
streaming video platforms in China as a pillar of their adver- - Ricky Ray Butler, Branded Entertainment Network
tising and marketing strategy.
The main tip for making ads and managing dedicated chan-
nels for brands is simple: content is king. Taking a “content Viewers tend to be highly critical of obvious brand intru-
commerce” approach, in which brand messaging or adver- sions into dramatic plots, as Chinese dramas already have a
tising is camouflaged in interesting scripted or unscripted reputation for “watering down” content with unnecessary
Working with Video Streaming Platforms 26subplots in order to increase episode counts. In non- enters to calm everybody down, then tells the son that
scripted programming, “designated product” (指定产品) is he should take some cold medicine to prevent falling ill.
used to indicate this marketing technique. Naturally, this provides an opportunity for a prominent
plug of cold remedy brand 999.
In 2019, the television show “Over the Sea I Come to You”
(带着爸爸去留学)—broadcast on iQiyi, Tencent, and Youku— In contrast, the popular four-part film series “Tiny Times”
was ridiculed by Chinese viewers for awkward product (小时代) (2013–2015) made Hermès Birkin bags, Celine
placement integrations and drew suspicions that certain jackets, and Ferragamo cocktail dresses an integral part of
plot points were written solely to provide opportunities for the movies and serves as an example of successful product
brand placements. placement, despite poor reviews from Chinese critics who
called the movies “shallow.”
One example that was subject to particular derision: a
mother who had spent eight years in the U.S. with her Why did product placement in “Tiny Times” work while it
son to support his studies is shown dumping a pot of flopped in “Over the Sea I Come to You”? Because of brand
water on his head during an argument. Another character relevance. In no way does a prominently displayed box
of cold medicine directly relate to a show about studying
abroad, in the way that a Birkin bag does in a film series in
which luxury and materialism are foundational themes.
Matching a Show With the Value of a Brand
Regardless of the content commerce strategy used by a
brand to reach audiences in China via domestic streaming
video platforms, perhaps the most important thing is to
ensure involvement in a manner that’s as seamless and low-
key as possible.
A clumsy product placement in Transformers: Dark of the Moon (2011)
Working with Video Streaming Platforms 27One recent example of effective use of “setting” in a brand
integration was seen on the “cloud” version of the popular
Hunan TV talk show “Day Day Up” (天天向上).
While other shows shed sponsors and cancelled filming, the
producers of “Day Day Up” created a livestreamed spin-off,
“Day Day Cloud Time” (天天云时间), broadcast from the
homes of its celebrity hosts. The show quickly secured eight
brand sponsors, including Baidu’s smart speaker brand
Xiaodu as the title sponsor.
This brand integration and sponsorship came across as par- A screenshot from “Day Day Cloud Time”
ticularly opportune, given that the show’s content focused
on how its celebrity hosts spent their time at home during the smartphone to record and review the contestants’
self-quarantine. performances. The phones were also used to film behind-
the-scenes footage of actors preparing for their roles, high-
Even overt product mentions escaped audience criticism. lighting the phone camera’s features.
When a guest mentioned that he was having trouble
helping his son with his studies following China’s school Sharing the practical value of a product or brand allows
closures, the host recommended using Xiaodu as an educa- audiences to “see for themselves” rather than hearing from
tional aid and demonstrated its use in that capacity. a paid spokesperson or online influencer.
Smartphone maker Vivo—the title sponsor of Youku’s
reality competition “Real Actor” (演技派)—took a similar
approach to promote its S5 model through real-life use of
Working with Video Streaming Platforms 28The Future of
Streaming in
Light of a
“New Normal”
29The outbreak of the coronavirus in China in late 2019 and adoption of fifth-generation cellular networks. The rollout
its global spread in early 2020 has upended any early pre- began on November 1, 2019, and China will soon have the
dictions of what we can expect to see in China for the rest of world’s largest 5G network, with 110 million users forecast
the year. From sponsors pulling out of brand integrations to by the end of 2020, representing 7% of its population.
productions shuttering, streaming platforms in China find
themselves in uncertain territory. Yet they are far from idle. Dramatically higher-speed 5G mobile internet will enable
the rapid development of interactive content, livestream-
Already in 2020, several new forms of entertainment have ing, augmented reality and virtual reality, along with the
entered the mainstream, among them “cloud living” con- seamless integration of e-commerce features. Brands and
tent—streaming programs livestreamed or shot inside a content producers will be required to innovate to make the
celebrity’s own home. In some cases, these programs are most of the new opportunities to connect with consumers
e-commerce enabled, allowing audiences to shop from under 5G.
their smartphones as they watch and closing the gap
between content and commerce to potentially lucrative E-commerce Entertainment
effect.
IQiyi’s hit reality series “Fourtry” (潮流合伙人) saw celeb-
In the midst of the “new normal” that is taking shape, we rities operating a trendy, streetwear-oriented boutique in
expect to see four macro-level trends continue to influence Tokyo and represents the next wave of entertainment-fu-
the development of the streaming video market in 2020 eled consumerism.
and beyond—with global implications:
It boasted the most major sponsors for an online reality
5G and Interactive Content show in 2019 with 11, and they were featured prominently:
The cast used title sponsor Vivo’s X30 phones to snap the
China’s technology giants are already leading the world in photos they shared with their huge social media followings,
the integration of content and commerce, and this area is their modern urban dwelling was furnished entirely by IKEA,
poised to take another leap forward with the widespread and a boxy Mazda truck hauled them around and became
The Future of Streaming 30platform, and via offline pop-up shops that replicated
“Fourtry’s” Tokyo boutique experience in China.
While several reality shows with an e-commerce angle
have aired over the past few years, they will appear far more
regularly in 2020, especially on streaming video platforms.
At least 15 such shows have been announced, including
Tencent Video’s streetwear-oriented “Generational Gravity”
(我们的浪潮) and “Secret Garden” (女人的秘密花园), a com-
petition for rural livestreaming hosts on Jiangxi Satellite TV.
A second season of “Fourtry” is also in the works.
The spread of 5G will encourage the inclusion of additional
interactive elements on e-commerce shows. With “Fourtry,”
iQiyi has already begun experimenting by using features
the butt of many friendly jokes. such as branching plots, AR and VR capabilities, and “see
now, buy now” technology.
Dozens of fashion brands were highlighted through their
placement in the store, with special text effects added to Branded Shows
note the names of products, which were available for pur-
chase via sponsor Aomygod’s app. Brands may also seek out a leading role by developing
entertainment content that revolves around core products.
Additional opportunities for commerce were created The trend has started to gain ground over the past year with
through limited-edition designer collaborations tied to the efforts such as the Airbnb-sponsored “Adventure Life” (奇遇
show, which were sold on the iQiyi Mall e-commerce 人生), real estate app Beike’s “New Life” (你好新家), and Didi
Chuxing’s “Let’s Go, Driver!” (出发吧, 师傅).
The Future of Streaming 31Each of these series highlights how brands work with differ-
ent production processes to integrate their content into the
core of a series.
In Airbnb’s case, the brand worked closely with Tencent
Video to embed itself into the existing IP of “Adventure Life”
for its second season. Beike worked with a production com-
pany that had developed the concept of a house-hunting
show with celebrity participation and shopped it around
to various real-estate companies. Didi took another route,
Promotional poster for “Let’s Go, Driver!”
establishing its own media company to become actively
involved in the production process from start to finish. spokespersons and ambassadors, establishing their own
talent agencies to manage their business.
Major tech companies may also use content to promote
their own offerings, as was the case with “The Truth! Actors and other celebrities with links to particular tech
Everything” (真相吧！花花万物), which airs on Youku. companies will not only star in their original series, where
Alibaba, the streaming service’s parent, used the second they can be seen to promote brands they are linked with
season of the show to promote Idle Fish, the second hand offline as well, but may also engage in the creation of short
resale platform that it also owns. videos, vlogs, livestreams, and exclusive interviews that can
appeal to fans and provide a vastly expanded presence for
Celebrity Incubation brands.
In addition to creating shows and other content to promote Major players such as Tencent and iQiyi are also investing
their offerings across the internet ecosystem, streaming heavily in the creation of virtual idols, which are still largely
platforms are becoming more actively involved in the incu- seen as a niche concept that appeals primarily to the ACG
bation of idols and celebrities who can appeal to brands as community, but with clear potential for expansion.
The Future of Streaming 32Thank You & About the Authors
How to Reach CCI Sky Canaves is the Editorial Director of Content Commerce
Insider. Previously, she was a reporter for The Wall Street
Thank you for reading our Guide to Streaming Platforms Journal in Beijing and Hong Kong, where she covered
in China. We welcome and appreciate any feedback and media, culture, social issues, and legal affairs, and served as
suggestions, and can be reached via email at the founding editor and lead writer of the WSJ’s China Real
avery@contentcommerceinsider.com. Time site. Prior to becoming a journalist, Sky worked in the
China corporate law practice of Baker & McKenzie, and she
About Content Commerce Insider has also taught journalism and media law at the University
of Hong Kong.
Launched in February 2020, Content Commerce Insider is
an online publication and email newsletter for companies sky@contentcommerceinsider.com
and professionals in the content marketing, branded con-
tent, e-commerce, entertainment marketing, and China Avery Booker is the Chief Operating Officer of Content
consulting sectors. Commerce Insider, overseeing business development and
partnerships, audience acquisition, and growth efforts.
Part of the New York-based Jing Group (Jing Daily, Jing Previously, Avery co-founded the cloud-based data plat-
Travel, China Film Insider), the Content Commerce Insider form Enflux, which helps higher education institutions
team spans China, the US, and Europe. harness the full power of their data. Before the launch of
Enflux, Avery was New York-based Partner at the consul-
www.contentcommerceinsider.com tancy China Luxury Advisors and founding Editor-in-Chief
of Jing Daily.
avery@contentcommerceinsider.com
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ter-us.html
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com/2020/digital/asia/china-virus-crisis-
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7 Maoyan Press Release, April 9, 2020. https://
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ket-booming-with-the-covid-19-pan-
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8 iQiyi Press Release, February 1, 2020. https://
www.prnewswire.com/news-releases/
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the-fat-dragon-for-february-1-through-its-
early-access-transactional-on-demand-
mode-300997340.html
Endnotes 34You can also read
