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From 2020 to 2021, affected by geography and the black swan of the epidemic, Chinese entrepreneurs are undoubtedly experiencing unprecedented new changes when going overseas. The clock has moved into 2022, what is their current situation? What experiences and lessons are worth sharing? Is there still a chance to go overseas in the future?
Author｜Ma Sixun Editor｜Hu Zhanjia
Source: Zero State LT
The overseas war on Chinese long-form video platforms is intensifying.
According to data from the data platform dataai CN, iQIYI ranked fifth in China’s non-game application overseas revenue list in April 2022, especially the strong growth in the Thai market.
The reason stems from a local Thai drama “Master Gangster Falls in Love with Me” with a score of 9.1 on iMDb in the United States, which made iQiyi, the sponsor behind it, famous. Qiyi was broadcast, and the characters outside the drama were on the hot search list in Thailand and the mainland for many times, and the sales of CP-themed magazines exceeded one million.
In addition to this, in the first quarter of 2022, iQIYI announced its profitability for the first time. At the same time, the international version of iQIYI was out of the circle this time, so that the long video going overseas is no longer a state of “silent making a fortune”. Looking back at the Chinese long-term video giants, they actually deployed overseas markets long before the epidemic. Especially the Southeast Asian market.
01
Aiteng locates in Southeast Asia
Youku goes far away from Europe, America and South Korea
Why Southeast Asia?
The entertainment industry in the rising period, the growing user market, and the low cost compared with the mainland may be the answer. The total population of Southeast Asia is about 650 million. However, this hot land has always been one of the main battlefields of mainland streaming media. According to data, the growth share of the Southeast Asian online video market has increased from 2% in 2015 to 26% in 2020, and is expected to reach 50% in the next five years.
In fact, the first Chinese video player to go overseas to Southeast Asia was LeTV.
LeTV registered an official account on Youtube in June 2013 and released episodes such as “The Legend of Zhen Huan”, “The Promotion of the Crown Princess” and “The Legend of Mi Yue”. Subsequently, each company continued the practice of LeTV, and successively established overseas accounts to publish video content that has been broadcast in the mainland.
Since 2014, overseas TV stations represented by True and GMM have begun to purchase the copyrights of Chinese TV series, which was once the peak period of mainland TV series broadcast on Southeast Asian TV stations. However, this situation did not last long. When the cost of purchasing dramas did not reach the expected income, and the local production cost was lower, the enthusiasm of overseas TV stations to buy dramas broadcast on the mainland cooled down.
However, the enthusiasm of overseas audiences for mainland online dramas has given mainland streaming media a signal: they must go overseas.
From the initial stage of relying on the Youtube platform and leaving the charging model in the hands of others, to a self-developed overseas version of the APP, mainland streaming media manufacturers have gradually deepened their control over the overseas market.
iQIYI has launched the international version of the IQIYI APP since June 2019, and its first overseas stop is located in Southeast Asia. Tencent launched video streaming service WeTV in June 2019. Since then, iQIYI and Tencent have faced each other in Southeast Asia, winning and losing at different times.
Tencent WeTV adopts a membership system, the monthly membership fee is about 30 yuan, and there are no advertisements. The adoption of this method was related to the general environment of video websites in Southeast Asia at that time. It entered the market earlier, and Netflix in the United States and Line TV in Japan, which had a higher market share, both adopted this mode.
In the same year that it was launched, Tencent’s hit drama “Chen Qingling” swept across Thailand and received more than 100 million views, and Xiao Zhan became a Thai superstar. Other popular works include “The Legendary Chen Qianqian” and “Three Lives Three Worlds Pillow Book”. WeTV topped the entertainment category on Google Play in Thailand for three consecutive months, and also ranked high in Indonesia, Malaysia and Singapore. Within one year, WeTV has grown at a rate of 175% increase in the number of users, 300% increase in the total viewing time, and user coverage in more than 110 countries and regions.
The spring of iQIYI is coming in 2020.
Dramas such as “The Hidden Corner”, “Fourteen Years of Chenghua” and “Pretty Scholar” have been widely distributed in Malaysia, Thailand, Singapore, Cambodia, Myanmar and other places. In the same year, iQIYI had 101.7 million members, and its annual operating loss shrank to 20% from 32% in 2019.
Compared with the rising production cost of mainland dramas, the establishment of overseas production teams and customized dramas have more price advantages. Taking Thailand as an example, according to the 2021 Thai TV drama actress’s worth and the quotations in the remuneration industry, the pyramid-level female artist Aumpatchapa’s TV drama single-episode Thai drama remuneration is stable at 200,000 yuan, which is far from the same level of mainland actresses.
The high cost performance brings investment attractiveness, which makes iQiyi and Tencent start to invest in local dramas.
In 2020, iQIYI released 6 original content titles in Asia, especially “Saying Goodbye” and “Hello, Heart”, which are its first local language original dramas in Southeast Asia. Tencent has continued the danmei drama track, entering the game with “Mystery of the Dead” and “Cheng Xin Cheng Yi”, and intends to directly launch dramas such as “Zhang Gong An” and “Haoyi Xing” on WeTV. These dramas are difficult to pass in the mainland due to the theme trial.
Overseas investment in drama series has spawned new entertainment idols, which is another revenue stream for the streaming media company behind the series. iQIYI’s recent hot screening of “The Young Master of the Gangster Falls in Love with Me” has led to a series of behaviors to make money from fans, such as binding CP interactive live broadcast, distribution of cover magazines, and face-to-face meetings. It has long been commonplace.
After all, a generation of idols and fans, only the platform stands.
Youku encountered iQiyi and Tencent in the mainland market, showing its exhaustion. In overseas markets, it chose to bypass Southeast Asia and enter the European, American and Korean markets.
In 2017, Youku’s self-produced drama “Chasing the Murderer in the White Night” was purchased by Netflix for overseas distribution rights and broadcast in more than 190 countries and regions around the world, becoming the first domestic online drama officially broadcast on a large scale overseas. In 2019, “Chang’an Twelve Hours” was launched in North America in the form of “paid content” on Viki, Amazon and Youtube.
In the overseas content of Youku, variety shows are more impressive than the dramas. According to The State of Pan-Entertainment Apps: Mobile Report 2022, Youku ranks first among the top OTT apps (likelihood of use, MAU) among millennials in Australia and the UK, and third in Canada and South Korea. The main contribution comes from the variety show “This! It’s Hip-hop”, the fourth season of which has exceeded 100 million views on the official Youku YouTube channel, with over 12 million interactions, and in the finals, it used simultaneous communication for overseas markets.
In contrast, Tencent and iQiyi have gradually solidified their foundations in the Southeast Asian market, and their content production has its own merits. Youku tends to be weak in the Southeast Asian market, and its future in the European, American and Korean markets is unclear, and it is only waiting for it to make up its mind to invest in the operation of the overseas version of the APP.
At present, the three Aiyouteng companies have not separately disclosed their overseas revenue in their financial reports, but with the growth of their business, I believe this day will not be too far away.
02
Netflix is still a giant
iQiyi and Tencent have no winners
The growth of long video services is positively correlated with the development of Internet users.
In 2021, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam will add 40 million new Internet users, and the total number of users will account for 75% of the total population of the six countries with a population of 440 million. Among them, 80% of Internet users have the habit of paying online, 72% of mobile video users, and Internet users over the age of 30 account for more than 60% of the total population. In the same year, the digital economy market in Southeast Asia reached 174 billion US dollars, and is expected to continue to exceed 360 billion US dollars in 2025.
The increase in the base of netizens, the formation of online payment habits and the younger users are the main factors for it to become a blue ocean. However, this blue ocean is not only open to iQiyi and Tencent, but the main rival in front of them is Netflix.
When Netflix entered the Southeast Asian market, it first adopted a price reduction strategy to cater to local consumption, selling services at a subscription price of less than $5 in Thailand, the Philippines, and Indonesia. When the low-price strategy hits the epidemic, Netflix will have 222 million global paying users in 2022.
In 2021, the world’s most popular Korean drama “Squid Game” will be invested by Netflix, representing the growth of Netflix’s long-term layout of the Korean entertainment industry. In this way, Netflix’s investment in Korean dramas has almost cultivated a fixed customer base in the streaming media market in Southeast Asia.
Compared with the total amount, Netflix’s annual operating income in 2021 will be 29.698 billion US dollars (of which the net profit attributable to shareholders is 5.116 billion US dollars), and the total revenue is approximately 6 times that of iQIYI in the same year. The total number of subscribers is approximately 2 times that of Tencent. In addition, it is the leader in the long video track to achieve profitability through membership subscriptions.
At present, no independent data has been found to explore the revenue of Tencent WeTV and iQiyi International in Southeast Asia, but by comparing with ViuTV, we may be able to get a glimpse. WeTV and iQIYI’s international version are showing long-term growth in the Southeast Asian market, but they are still not a threat compared to Netflix, which has been criticized due to the decline in the number of subscribers.
In addition, Disney+Hotstar (Disney’s streaming media), ViuTV (a Cantonese free TV channel run by Hong Kong TV Entertainment Co., Ltd.), Apple TV+ (Apple subscription), Hooq (Singapore streaming media, which has been bankrupt and liquidated) , Iflix (formerly Malaysian streaming media), etc. were once the strong rivals of iQiyi and Tencent WeTV in the Southeast Asian market.
Tencent and iQiyi were late in the Southeast Asian market. As a latecomer, the pressure comes not only from competing with the streaming media that have established a firm foothold, but also from the fact that they continue the war from the mainland to overseas.
Take Tencent’s acquisition of Iflix in June 2020 to demonstrate its determination to expand the Southeast Asian market. This acquisition brings Iflix’s 17 million subscribers in 19 countries and regions including Southeast Asia.
iQIYI entered and deployed the market in the direction of refined regional operations, which is different from Tencent’s large acquisition method. In November 2019, iQIYI reached a cooperation with Astro, Malaysia’s No. 1 media brand, to formulate marketing strategies on the basis of localization. In 2020, iQIYI has successively set up offices or overseas teams in Thailand, Malaysia, the Philippines, Indonesia, Singapore and other places to handle local operations.
iQIYI and Tencent are evenly matched in the Southeast Asian market.
The layout in Southeast Asia has not really shown to the profitability of iQiyi and Tencent Video. Instead, it is due to inertia, which makes people worry about whether iQiyi and Tencent will bring their operating inertia in the mainland to overseas markets.
High-turnover, high-consumption operation mode: investing a lot of manpower and material resources to push up the production price of dramas; cultivating some traffic stars with soaring prices; user experience sacrificed by too many advertisement placements, and then improving user experience in the name of experience Consumer prices so as to lose users.
Compared with Tencent, iQiyi can only go all out.
Tencent does not rely on long video as an ontology growth item, but for iQiyi, long video as a core business is crucial. Tencent Video is a sub-business under Tencent’s social network, and other business sectors such as online text (reading), games and other content industries can provide content for the long video business. At the same time, Tencent has the ability to maximize the star economy and push Xiao Zhan to the Thai people.
When iQiyi and Tencent encountered Netflix in the Southeast Asian market, it was a passive choice and an active attack. Breakthrough, or beyond, everything takes time.
03
Chinese long video platform
How to win overseas wars
According to a survey report on the online streaming media market in Southeast Asia released by consulting firm Media Partners Asia (MPA) in 2022, the most popular content in the region is Korean dramas (30%) and American dramas (30%). 23%), Chinese drama (14%).
Starting with costume dramas going overseas, the ratings of domestic dramas in Southeast Asia have been increasing year by year.
From 2021 to 2022, realism-themed stories going overseas are becoming the main rhythm. The 10 outstanding overseas communication works reviewed by the State Administration of Radio and Television were selected for TV dramas, including “Shan Hai Qing”, “Big River 2”, and “In the Name of Family”.
The online broadcast channel of reality-themed dramas such as “Shan Hai Qing” and “Dajiang Dahe 2” is iQIYI (not necessarily exclusive, with the participation of Youku), which makes iQIYI better than Tencent in the quality performance of the main theme dramas. Strong. The 2022 hit drama “The World” is likely to receive greater support in the next round of overseas promotion.
Tencent Video dominated the market with “Meng Hualu” in the second quarter of this year, and it was launched on the Netflix platform on July 1, showing the recognition of domestic dramas by overseas streaming media platforms. There is a major difference between the process of streaming media going overseas to Southeast Asia and their stay in the mainland. It is a commercial war-style “roll” internally, and it must assume the function of cultural form externally. iQIYI and Tencent are “telling the Chinese story level”, challenging Netflix’s position in Southeast Asia.
In addition, iQIYI and Tencent are seeking a victory in integrating into the local area and breaking through the language and culture barriers. In August 2021, the international version of iQIYI will launch the first Southeast Asian self-made drama “Soul Ferry: Legend of Nanyang”, which is produced with Dolby Atmos technology and 4K high-definition picture quality, which is an important step for it to target the Southeast Asian market. In the second half of last year, iQIYI proposed to further reduce costs and increase efficiency through AI translation to ensure the viewing experience of local users.
Tencent Video tends to strengthen localized cooperation, including completing an exclusive cooperation with Media Prima in Malaysia and acquiring TV dramas from Taiwan 3 in Thailand.
Whether it is based on the production of drama series, or the method of “buy, buy, buy” to obtain the market, iQiyi and Tencent Video have continued their commercial inertia in Southeast Asia.
iQIYI has been hailed as “China’s Netflix”, but the fact is that it can compete with Netflix in terms of its operating model and main business. In the first quarter of 2022, Netflix released data showing that subscribers plummeted, while iQiyi achieved its first profit in the same period. This reversal has strengthened the confidence of the mainland streaming media industry.
We hope to see in the future that what iQIYI and Tencent will present in the Southeast Asian market will not be involution, but each will occupy the track. In the form of uniting overseas local media industries, they will continue to improve the quality of episodes (industrialization level), and will The pie of globalization is getting bigger.
To a global audience, a good show, a good story, is everything.
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