Online Video Subscribers Giving Tough Time to Traditional Cable TV Medium in China

Digital streaming or online video subscription seems to be expanding at a very high rate as every year passes by. Similarly, in China, digital video subscription seems to be exploding. The number of SVOD subscribers in China will hit 144.0 million this year, accounting for more than one-quarter (26.9%) of total digital video viewers.
The number of SVOD subscribers in China will hit 144.0 million this year, accounting for more than one-quarter (26.9%) of total digital video viewers, says JPMorgan Chase & Co.
As per the trends, the number of SVOD will increase significantly by double-digit rates annually, hitting 234.3 million by 2020. Having said that SVOD will still be behind cable TV subscribers. On the other hand, it is expected that a number of cable TV subscribers will fall subsequently from 252 to 248 by 2020.
In early days, China was home for most pirated content in online video platforms but that has changed in recent years. The government of China has cracked down on illegally hosted materials, and video services began to sign licensing deals with content studios.
Platforms like Baidu-owned iQiyi and Alibaba’s Youku Tudou are purveyors of legitimate content, and consumers in China appear to be responding favourably. JPMorgan Chase & Co. estimates that iQiyi will lead China’s SVOD market this year, with 99.1 million subscribers, an increase of more than 120% vs. 2016, says e-marketers.
There is no doubt how important legitimate content is in today’s digital which is why iQiyi signed a deal with Netflix in April to serve as the platform for the latter’s original content in China. (Netflix withdrew from the country in October 2016, citing insurmountable regulatory challenges.)
iQiyi’s hold on China’s SVOD market is not unassailable, however. JPMorgan Chase & Co. projects Tencent Video will catalog 80.6 million paying subscribers this year, with that figure rising to 172.2 million by 2020. By then, iQiyi will lead by fewer than 10 million subscribers.