Entertainment: Category added this year leads ranking in growth
Platforms feature broad menu of content
With its 186 percent value increase, entertainment led all 24 categories analyzed in the BrandZ™ China Top 100. Added to the ranking this year, the entertainment category includes three brands: iQiyi and Youku, which were listed last year in the technology category, and Bilibili, a newcomer. Chinese brands have improved the quality of content, including TV shows, and have effectively monetized it.
The market size of online entertainment in China is over $47 billion, according to Bilibili company reports, and it is expected to grow to over $97 billion by 2020. The category exists at the intersection of mobile and social media and primarily includes online games and streaming video. Each of the ranked entertainment brands is affiliated with one of China’s BAT online technology leaders. Baidu is aligned with iQiyi; Alibaba owns Youku; and Tencent is a major investor in Bilibili.
An online streaming site often compared to Netflix, iQiyi completed an IPO that spun off the brand from Baidu, which remains a major stakeholder. iQiyi quickly formed a partnership with JD.com to attract new members, and it announced plans to also partner with Alibaba and Tencent. iQiyi has successfully grown a membership program in part by making premium content available. It also expanded its audience through an arrangement that includes iQiyi content on Xiaomi smart TVs.
iQiyi has successfully produced its own content, including titles that won awards at the Shanghai International Film Festival. The brand uses artificial intelligence to better understand what content elements most delight audiences. It also has developed virtual reality content. iQiyi has enjoyed success with reality shows, including one in which people debate various topics.
Youku also has leveraged the popularity of reality shows in China. A subsidiary of Alibaba since it was acquired in 2016, Youku benefits from the reach of the Alibaba ecosystem. Access to Youku content is a benefit of the new Alibaba membership program, 88 VIP. In addition, Alibaba signed a licensing agreement that will make classic Disney animated content and other popular Disney movies available on Youku as part of a strategy to lead in online family entertainment and distribution of international content.
Bilibili is somewhat different from the other two video platform brands. It has succeeded with unique positioning aimed at young people, which comprise around a quarter of China’s population, according to Bilibili company reports. Around 82 percent of Bilibili’s 93 million Monthly Active Users (MAU) are members of GenZ. The brand offers a wide range of animated features and a lot of user-generated content to build engagement and community.
Bilibili derives much of its revenue from users who pay for games and other content, and from advertising that is relevant to the content. In contrast, iQiyi and Youku generate revenue with subscriber fees as well as advertising. All the brands benefit from the amount of time Chinese people in dense urban areas seek entertaining diversion during long daily commutes to and from work.
The growth of the entertainment category has increased brand marketing possibilities. The online entertainment sites depend on strengthening engagement with user-generated content. The platforms then become attractive to advertisers that can provide both traditional brand messaging and brand-relevant content. With improved quality and viewer appeal, TV shows have become strong platforms for brands.