The Online Copyright Industry Research Base of National Copyright Administration of China published the Report on the Development of China’s Online Copyright Industries (2018) (the “Report”) in Beijing on April 23, 2018. According to the Report, the market size of China’s online copyright industries (the “Industries”) reached RMB636.5 billion in 2017, 27.2% more than 2016. User payment amounted to RMB318.4 billion, representing more than 50% of this market.
The industries have maintained a robust growth momentum. Traditional cultural industries are embracing the internet, and accelerating their digitalization. Both user base and market size are expanding across the various online copyright industries.
Chinese users paid RMB21.8 billion for online videos in 2017. This amount is expected to soar by 60% in the next two years. Users have become more willing to pay for content. IP adaptations are more monetizable. Driven by both of these factors, China’s market size for digital reading has topped RMB10 billion, up by 31.1% YoY, and is expected to maintain a CAGR close to 30% in the coming years.
Fueled by mobile e-sports and social networking, China’s online gaming market expanded to RMB235.5 billion in 2017, up by 32%. In the same year, the country saw its online music market (excluding telecommunication music value-added service) totaling RMB17.5 billion, 22% more than 2016. Leveraging innovative advertisement formats and greater mobile traffic, online media market keeps growing. In 2017, online news constituted a market of RMB30.5 billion, up by over 40%. Mobile news contributed over 75% of such revenue, mainly relying on native in-stream ads and commercials of top brands.
Virtual gift model for live streaming grew exponentially, and pulled up the expansion of the entire market in 2017. China’s user base of live streaming grew to 422 million, 77.78 million more than 2016, yielding a 54.3% penetration among internet users and a market of almost RMB40 billion, only next to gaming. In 2017, hypergrowth was also achieved in the short video industry, with its user base exceeding 410 million, up by 115%. Given the explosive growth of both user traffic and advertisement value, the short video market is expected to exceed RMB35 billion, and showcase the earth-shaking power generated by the convergence of mobile internet and digital content.
Convergence is driving the development of the various industries. Technology-wise, “content + social network + AI big data” are giving birth to new types of content such as information flow, music social and WeChat applets. Industry-wise, the internet will converge deeper with such upstream industries as films (i.e. motion pictures), TV, publishing, music and animations and comics (“A&C”), and invigorate the original content market. After crossing the historic mark of RMB600 billion, the Industries will, in the foreseeable future, produce more premium content, protect originality, respect creators, and grow in both size and strength.
Excerpted from the Report on the Development of China’s Online Copyright Industries (2018)