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April 2021

KEY TRENDS IN CHINA’S ONLINEVIDEO INDUSTRY

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ONLINE VIDEO PENETRATION APPROACHES 94% OF INTERNET USERS

TRACKING INTERNET & ONLINE VIDEO USER TRENDS

Source: Company data, Media Partners Asia

0

200

400

600

800

1,000

1,200

2018 2019 2020 Q1 2021

829880

989 1,007

725802

927 942

501

709

873 900

499 549

617 624

Tota

l use

rs (m

il.)

Internet Users Online Video Users Short Video Users Livestreaming Users

94% 89% 62%

Penetration of Internet Users

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SHORT VIDEO DRIVING CONSUMPTION

SHARE OF VIDEO USER TIME SPENT

Source: Company data, Media Partners Asia

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2016 2017 2018 2019 2020 Q1 2021

0% 1%15%

26%33% 34%

9%14%

15%

20%

27% 27%

4% 5%

28%27%

19%

12%

9% 9%

23%24% 15%

12%

8% 8%

13%10% 8%

5%

3% 3%

4% 3%2% 3%

3% 3%

2% 2% 2% 3%

3% 3%22% 19% 24% 20%9% 9%

% o

f O

nlin

e Vi

deo

Tim

e Sp

ent

Douyin Kuaishou WeChat Channel Video iQIYI Tencent Video Youku Mango TV Bilibili Others

66% Of Streaming Time Spent On Top 3 Short Video Platforms

65.1

20.412.3 11.8 10.9 10.7

6.82.50

10

20

30

40

50

60

70

Douyin Youku MangoTV

Kuaishou iQIYI TencentVideo

Bilibili WeChatChannelVideo

US$

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RATE INCREASES SUPPORT SVOD ARPUS, MORE UPSIDE ON AD ARPUS

ADVERTISING REVENUE PER DAU (KEY VIDEO PLATFORMS)

Note: 1) Monthly ARPU reflects consumer spend, and excludes advertising.2) ARPU for Alibaba, Tencent, and Baidu reflects total consumer spend across all digital segments.3) ARPU for Bilibili, and Kuaishou includes livestreaming (virtual gifts).Source: Company data, Media Partners Asia

Average

MONTHLY ARPU PER DAU (KEY DIGITAL COMPANIES)

Platforms such as Bilibiliand WeChat Channel Video

still significantly undermonetized

21.6

7.54.9 3.8 2.9 2.8

1.00

5

10

15

20

25

30

35

Alibaba Tencent Baidu iQIYI Bilibili Kuaishou Weibo

US$

Low monthly ARPU implies upside on membership fees for most

Chinese platforms

Recent rate hikes led by iQIYI and Tencent

Video

Ad monetization per DAU for most video platforms

is still fairly low, but upside may be limited due

to slowing industry growth

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SVOD TO CAPTURE 77% OF INCREMENTAL ONLINE VIDEO INDUSTRY REVENUE

* SVOD includes internet TV | Source: Media Partners Asia

Incremental Online Video Revenue (2020-25):

US$8.4 bil.

SVOD (Consumer Spend)77%

AVOD (Advertising)23%

0

5

10

15

20

25

30

2020 2021 2022 2023 2024 2025

US$

bil.

Subscription Advertising

16.5

ONLINE VIDEO REVENUE TRENDS

18.520.4

22.2 23.8 24.9

AVOD: 5%

SVOD: 11%

CAGR (2020-25)

Overall: 9%

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RISING BIG SCREEN CONSUMPTION DRIVES INDUSTRY GROWTH

Key Drivers For Long Form Centric Platforms:

-ARPU increase as more households choose to subscribe internet TV packs (typically priced 3-4x mobile plans).

-New advertising formats on smart TV screens.

~250 mil. active smart TV terminals

~5 hours average daily time spent on

smart TVSVOD / Internet TV

+25% Y/Y >40% Y/Y

Short Video Apps Integration

Key Drivers For Short Form Centric Platforms:

-Expands reach onto non-conventional screens with new user cases.

-New content focus adapted for household viewing, i.e. short-to-mid form, educational, games, home-shopping, and infotainment.

Ultimate hub of full array of video

formats

VR / AR

5G Integration

4K / 8K

UHD Upgrade

~10% of TV viewers access short videos on

smart TV

Established in 2001, Media Partners Asia (MPA) is the leading independent provider of research, advisory and consulting services across the media and telecoms sectorsin Asia Pacific.

MPA provides definitive reports with proprietary industry models and forecasts. Our reports are widely used and sourced by local, regional and global companies forbusiness planning, market strategy and capital market transactions.

MPA advisory and consulting services help clients enter new markets and acquire businesses with our team providing commercial due diligence, customized research andstrategy recommendations.

We offer customized services to guide strategic planning and business development activities and support the launch of new products and services. We also provideindependent consultant (IC) industry analysis and benchmarking for equity and debt offerings, including IPOs for broadcasting, digital media and telecommunicationscompanies in Asia Pacific.

Our offering includes AMPD, a research platform measuring consumer behavior across the digital economy, including online video and gaming. The service providesunparalleled access to data, case studies and strategies for business planning, marketing, and programming.

CONTACT: Adrian Tong, Senior Analyst | adrian@media-partners-asia.com

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