Tencent to boost online video division

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Tencent to boost online video division

(China Daily) 09:49, November 27, 2013

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Tencent Inc's video services booth at an Internet conference in Beijing. Tencent will use its social networking tools to attract more traffic to its video services.[Zhu Xingxin for China Daily]

Chinese Internet giant Tencent Inc said on Tuesday it will beef up its online video arm, taking advantage of its strong social networking business.

The move is the Shenzhen, Guangdong-based company's latest attempt to commercialize its instant messaging tool, WeChat.

The "social TV" initiative is a response to viewers' mobile, multiscreen and interactive demands, and it will change the way people consume online video content, said Liu Shengyi, head of Tencent's online media unit.

"Because it has interactive features, the mobile Internet is not an extension of the traditional Web industry.

"It creates a brand-new market for video companies," said Liu, adding that market integration intensified this year, and players with a better knowledge of viewer preferences will snare a bigger market share in 2014.

Gao Zhishou, chief executive officer of industry research company EntGroup Inc, told China Daily that "merging" will be the key word for China's online video industry over the next five years.

"The entertainment industry is a highly competitive ecosystem. Film and TV program producers have to join forces with Internet companies to expand distribution channels.

"Online video platforms will also look for chances to work with content producers, because they need exclusive programs to lure more viewers," said Gao from EntGroup.

Wang Juan, vice-president of Tencent's online video unit, said Web-based video services will be the biggest application in the Internet industry in the coming year.

Tencent will utilize its social networking tools, such as WeChat and micro-blog services, to attract more traffic.

"Adding viewer numbers from PCs is a dead end for every video website. The potential growth lies in China's massive mobile Internet user base," said Wang.

Released in 2011, WeChat is the fastest-growing popular instant messaging app in China, and its global user base is nearing 600 million.

Yet Tencent faces a tough battle with other online platforms.

Although it leads the industry in terms of the total viewing time of the top 30 TV series, its edge was tiny.

Tencent had a 26 percent market share, while LeTV, Youku, iQiyi and Tudou took a combined 74 percent in the first 10 months of this year, according to EntGroup.

Data from the China Internet Network Information Center showed the country had an online video audience of more than 388 million as of June, up 65.8 percent year-on-year. At present, the mobile user base for Tencent's video apps stands at 100 million each day, four times higher than it was just last month.

Tencent also said it will increase its investment in purchasing programs. The company plans to put online 140 domestic TV series, 2,500 hours of programs made in the United States and the United Kingdom and at least 200 Hollywood movies over the next year.

Tencent also plans to broadcast the Brazil World Cup next summer. Details of the plan haven't yet been disclosed.

Wu Tao, chief executive officer of Shanghai-based TV program studio Croton Media, said that importing high-quality TV series will force local producers to lift their production quality.

"More importantly, better video content means more advertising income for video websites," said Wu.