China online video market reached 2.42 billion yuan in the first quarter of 2013, up 39.5% from 2012, but down 11.0% compared with the last quarter of 2012 which is affected by the quarterly factors of advertising market.
Market Size: Stable Growth Overall; Diversified Sources of Income
Advertisement is still the main income source of online video industry. Meanwhile the industry is also seeking for diversification in the business model, supplying several premium services including E-commerce, video show and video-on-demand, etc. Video industry is in pursuit of content differentiation.
Advertising Market Scale: Consolidation Continued, Advertising Revenue Integration Becoming More Obvious
The advertisers’ income falls after rise in the first quarter quarterly, and the advertising market scale has reached 1.74 billion yuan, up 47.9% by year-on-year growth. With intensified integration in video industry, the convergence of video platform becomes more obvious in both user size and revenue. On the other side, the value of video media receives acceptance and acknowledgment continuously.
PC Structure: The Use Duration of Website Share Is Increasing
After the fourth quarter of 2012, online video playing on the website experienced longer time than the client side, and this gap is widening further in the first quarter.
The video industry consolidation continues. Some video companies cannot make quick adjustment due to capital market factor or other, which leads to slowed traffic growth.
Mobile Video: Advertiser Market Needs To Be Universal
Types of advertisers are slightly different in PC and mobile. Brand advertisers have realized the great value of mobile video, and the number of advertisers in food and beverage, traffic and IT product also rank a lot higher.
In the first quarter of 2013, competition in China online video industry became more intense. Maintaining and pursuing the market share, online video platforms expanding in multi-device support such as on mobile and television, are becoming one main direction in current video industry.
According to iResearch, the trend of merger and acquisition in video industry will continue. After Youku and Tudou, several video media have the opportunity to compete for the second in the industry. Merger is the fastest way to take the second position.