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Digital Media Consumption (News, eBooks and Video) - China - June 2019

“The popularization of smartphones enables consumers to enjoy online activities anytime, anywhere. With online videos, online news and e-books universally popular in China, the next step for the media industry will be encouraging consumers to pay for digital content and increasing penetration among new internet users. Overall, the paid market is still underdeveloped in terms of consumers’ willingness to pay for content. Chinese consumers’ awareness towards copyright has improved, although it is not as mature as consumers in developed countries.”
– Kaye Huang, Research Analyst

This report looks at the following areas:

  • Fulfilling young adults’ needs for emotional connection
  • Help parents choose the right content
  • Print books still have potential among young adults

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
        • Excluded
          • Sub-group definitions
          • Executive Summary

              • The market
                • 60% of China’s population have internet access
                  • Figure 1: China’s internet users and share of total population, 2014-2018
                • The growth of online news and online videos has reached a plateau
                  • Figure 2: Users numbers for different online activities, 2016-2018
                • Short video must learn from difficulties faced by live streaming
                  • Healthy profit model for e-books but stagnant growth for e-readers
                    • Companies and brands
                      • Exclusive content is key competitive advantage in long video market
                        • Building ecosystems to enhance long-term value
                          • Providing free content is still a common strategy for obtaining users
                            • The consumer
                              • Almost everyone watches online videos and reads online news and e-books
                                • Figure 3: Penetration rate of online activities, 2016-2019
                              • Smartphones lead, but multiple devices are used
                                • Figure 4: Devices used for online activities, March 2019
                              • All usage increased in the last two years
                                • Figure 5: Types of online videos watched in the last six months, 2017 and 2019
                              • Average watching time of living streaming and short video is similar
                                • Figure 6: Hours watched per day for different types of online videos, March 2019
                              • Content and sensory experience are the most important factors when choosing long video platforms
                                • Figure 7: Reasons for choosing platforms for watching long videos, March 2019
                              • New content and variety are most sought after
                                • Figure 8: Reasons for choosing short video platforms, March 2019
                              • Internet news platforms are not only killing newspapers but also their digital versions
                                • Figure 9: Platforms for browsing online news, March 2019
                              • E-readers still skewed towards high-end market
                                • Figure 10: Percentage of e-reader users, by selected demographics, March 2019
                              • Joy of reading without damaging eyesight a plus for e-reader users
                                • Figure 11: Reasons for using e-readers, March 2019
                              • E-readers is a niche market
                                • Figure 12: Barriers to using e-readers, March 2019
                              • Print newspapers are dying, while print books are still embraced by young adults
                                • Figure 13: Attitudes towards print media and digital media, March 2019
                              • Consumers are willing to pay for online news
                                • Figure 14: Attitudes towards paying for online news, March 2019
                              • Users unprepared to pay for sharing purchased content in China
                                • Figure 15: Attitudes towards paying for sharing purchased e-books, March 2019
                              • One third of e-book readers still trust book recommendations
                                • Figure 16: Attitudes towards digital marketing of e-books, March 2019
                              • What we think
                              • Issues and Insights

                                • Fulfilling young adults’ needs for emotional connection
                                  • The facts
                                    • The implications
                                      • Help parents choose the right content
                                        • The facts
                                          • The implications
                                            • Print books still have potential among young adults
                                              • The facts
                                                • The implications
                                                • The Market – What You Need to Know

                                                  • Internet penetration in China is steadily increasing
                                                    • Future of online videos and online news markets depends on increasing internet penetration and paying users
                                                      • Government control may hinder the growth of live streaming and short video markets
                                                        • Increased copyright protection benefits content creators
                                                        • Market Overview

                                                          • 60% of China’s population have internet access
                                                            • Figure 17: China’s internet user population and share of total population, 2014-2018
                                                          • 99% of internet users access the internet on smartphones
                                                            • Figure 18: Devices used for online activities, 2014-2018
                                                        • Market Size

                                                            • Figure 19: User numbers for different online activities, 2016-2018
                                                          • Long video market
                                                            • Converting freemium users to paying ones is the next major challenge
                                                              • Figure 20: Number of long video users and growth rate, 2016-2018
                                                            • Live streaming market
                                                              • Strict regulations inflict heavy losses on live streaming market
                                                                • Figure 21: Number of liver streaming users and growth rate, 2016-2018
                                                              • Despite live streaming declining, e-commerce and social media are using it to engage consumers
                                                                • Live online gaming and live sports streaming remain popular
                                                                  • Figure 22: User penetration of different types of live streaming among Chinese internet users, 2017-2018
                                                                • Short video market
                                                                  • Short video audience reached 648 million in less than two years
                                                                    • Figure 23: Number of users and growth rate of short videos, 2016-2018
                                                                  • Online news market
                                                                    • Lower tier cities are both challenge and opportunity for online news
                                                                      • Figure 24: Number of users and growth rate of online news, 2016-2018
                                                                    • E-books market
                                                                      • Slow yet stable growth in e-books
                                                                        • Figure 25: Number of users and growth rate of e-books, 2016-2018
                                                                      • Healthy profit model with more than 80% of revenues from paying users
                                                                        • Figure 26: Market value of paid e-books, 2014-2019
                                                                      • E-readers remain a niche market
                                                                        • Figure 27: Ownership rate of e-readers, 2015-2018
                                                                    • Market Drivers

                                                                      • Fast growth of smartphones and reduced data plan prices
                                                                        • Enhanced protection of copyright would encourage the production of high-quality content
                                                                          • Good content sells; not stars
                                                                          • Market Challenges

                                                                            • Tighter government control of all online content
                                                                              • Parental supervision for teenagers
                                                                                • Still a long way to go to educate Chinese consumers to pay for content
                                                                                • Key Players – What You Need to Know

                                                                                  • Oligopolistic market
                                                                                    • Exclusive content is key competitive advantage in long video market
                                                                                      • Online games and entertainment are key topics for live streaming
                                                                                        • Capitalizing on the importance of user experience on smartphone apps
                                                                                          • Building ecosystems to enhance long-term value
                                                                                            • Providing free content is still a common strategy for obtaining users
                                                                                            • Key Player Overview

                                                                                              • Long video market
                                                                                                • Fierce competition to offer exclusive and original content
                                                                                                  • Figure 28: Overview of top five players in long video market
                                                                                                • Similar prices for subscription services but different strategies
                                                                                                  • Figure 29: Subscription fees of top three long video platforms (excluding sports sectors)
                                                                                                • Copyright of popular sporting events is key
                                                                                                  • Figure 30: Subscription fees of top three long video brands broadcasting sporting events
                                                                                                • Live streaming market
                                                                                                  • Video games and entertainment divide the pie
                                                                                                    • Figure 31: Overview of top five live streaming platforms
                                                                                                  • Short video market
                                                                                                    • Around 80% of short video viewers uses Douyin
                                                                                                      • Figure 32: Overview of top two short video platforms
                                                                                                    • Online news market
                                                                                                      • The competition between ByteDance and Tencent set to intensify
                                                                                                        • Figure 33: Overview of top two online news platforms
                                                                                                      • E-books market
                                                                                                        • Tight cooperation among players in e-books market
                                                                                                          • Figure 34: Overview of top three companies in e-books market
                                                                                                      • Who’s Innovating?

                                                                                                        • Long video market: optimised user experience on smartphones
                                                                                                          • Figure 35: User interface examples of iQIYI and Tencent Video’s smartphone apps
                                                                                                        • Live streaming market: developing the ecosystem by building e-sports companies
                                                                                                          • Short video market:
                                                                                                            • Targeting specific audiences
                                                                                                              • Entering the social media market
                                                                                                                • Marketing positive brand reputation through cooperation with government
                                                                                                                  • Online news market: consumers encouraged through incentives
                                                                                                                    • E-book market: making money from advertisers not consumers
                                                                                                                    • The Consumer – What You Need to Know

                                                                                                                      • Saturated penetration of all listed online activities
                                                                                                                        • Smartphones lead, but multiple devices are used
                                                                                                                          • Content is key
                                                                                                                            • E-readers are not going to be accepted by the mass market
                                                                                                                              • Newspapers are dying, but print books still have potential
                                                                                                                                • Charging for digital content needs to be achieved step by step
                                                                                                                                • Digital Content Consumption

                                                                                                                                  • Almost everyone watches online videos, reads online news and e-books
                                                                                                                                    • Figure 36: Penetration rate of online activities, 2016-2019
                                                                                                                                  • Smartphones lead, but multiple devices used
                                                                                                                                    • Figure 37: Devices used for online activities, March 2019
                                                                                                                                  • Internet TV boxes being phased out in favour of smart TVs
                                                                                                                                    • Young consumers are the core users of “smart” devices
                                                                                                                                      • Figure 38: Selected devices used for watching online videos, by age, March 2019
                                                                                                                                    • Smart TVs not just for videos
                                                                                                                                    • Types of Online Videos Watched

                                                                                                                                      • All usage increased in the last two years
                                                                                                                                        • Figure 39: Types of online videos watched in the last six months, 2017 and 2019
                                                                                                                                      • Age difference is most significant in live streaming
                                                                                                                                        • Figure 40: Penetration of different types of online videos, by age, March 2019
                                                                                                                                      • Narrowing gender gap in live streaming viewers
                                                                                                                                        • Figure 41: Penetration of live streaming, by gender, 2017 and 2019
                                                                                                                                    • Video Watch Time

                                                                                                                                      • Average watching time of living streaming and short vide is similar
                                                                                                                                        • Figure 42: Hours watched per day for different types of online videos, March 2019
                                                                                                                                      • Young women are heavy viewers of online videos
                                                                                                                                        • Figure 43: Percentage of heavy users of different types of online videos, by selected demographics, March 2019
                                                                                                                                    • Reasons for Choosing Long Video Platforms

                                                                                                                                      • Content and sensory experience are the most important factors in choosing long video platforms
                                                                                                                                        • Figure 44: Reasons for choosing platforms for watching long videos, March 2019
                                                                                                                                      • Learn from sports channels to enhance pricing power
                                                                                                                                        • Young users are more interested in interaction
                                                                                                                                          • Figure 45: importance of online video platform influencers, “bullet comments are more interesting”, by age, March 2019
                                                                                                                                        • Quick updating of new videos is more important for 30-49 year olds
                                                                                                                                          • Figure 46: importance of online video platform influencers, “quick update of new videos”, by age, March 2019
                                                                                                                                        • Families with children need more personalised recommendations
                                                                                                                                          • Figure 47: Selected reasons for choosing long video platforms, by family structure, March 2019
                                                                                                                                      • Reasons for Choosing Short Video Platforms

                                                                                                                                        • New content and variety are most sought after
                                                                                                                                          • Figure 48: Reasons for choosing short video platforms, March 2019
                                                                                                                                        • Consumers in their 20s are more likely to follow the crowd
                                                                                                                                          • Figure 49: Selected reasons for choosing short video platforms, by age, March 2019
                                                                                                                                        • Higher income consumers are more likely to be video creators
                                                                                                                                          • Figure 50: Selected reasons for choosing short video platforms, by income level, March 2019
                                                                                                                                        • Help families with children to watch the latest short videos
                                                                                                                                          • Figure 51: Selected reasons for choosing short video platforms, by family structure, March 2019
                                                                                                                                        • Social media marketing targeting moms and dads
                                                                                                                                          • Figure 52: MeadJohnson marketing campaign on Douyin
                                                                                                                                      • Types of Platforms for Browsing Online News

                                                                                                                                        • Consumers are getting used to diverse sources of information
                                                                                                                                          • Figure 53: Platforms for browsing online news, March 2019
                                                                                                                                      • Motivations and Barriers to Using E-readers

                                                                                                                                        • E-readers still skewed towards the high end of the market
                                                                                                                                          • Figure 54: Percentage of e-reader users, by selected demographics, March 2019
                                                                                                                                        • Joy of reading without damaging eyesight a plus for e-reader users
                                                                                                                                          • Figure 55: TURF analysis of reasons for using e-reader to read e-books, March 2019
                                                                                                                                        • Note taking e-readers appeal to mid-to-high income consumers
                                                                                                                                          • Figure 56: Sony’s e-readers with note-taking feature
                                                                                                                                        • E-readers are a niche market
                                                                                                                                          • Figure 57: Barriers to using e-readers, March 2019
                                                                                                                                      • Attitudes towards Online News and E-books

                                                                                                                                        • Gloomy future for newspapers, but print books will survive
                                                                                                                                          • Figure 58: Attitudes towards print media and digital media, March 2019
                                                                                                                                        • Young consumers are more nostalgic towards print books
                                                                                                                                          • Figure 59: Attitudes towards paper media and digital media, by age, March 2019
                                                                                                                                        • 42% of consumers are willing to pay for online news
                                                                                                                                          • Figure 60: Attitudes towards paying for online news, March 2019
                                                                                                                                        • Consumers treat ads as a form of payment when reading online news
                                                                                                                                          • Users unprepared to pay for sharing purchased content in China
                                                                                                                                            • Figure 61: Attitudes towards paying for sharing purchased e-books, March 2019
                                                                                                                                          • One third of e-book readers still trust book recommendations
                                                                                                                                            • Figure 62: Attitudes towards digital marketing of e-books, March 2019
                                                                                                                                        • Meet the Mintropolitans

                                                                                                                                          • MinTs prefer e-books
                                                                                                                                            • Figure 63: Attitudes towards e-books and paper books, by consumer classification, March 2019
                                                                                                                                          • MinTs are more willing to pay for online news, but are not triggered by removing ads
                                                                                                                                            • Figure 64: Attitudes towards paying for online news, by consumer classification, March 2019
                                                                                                                                          • Even among MinTs no consensus on paying for sharing purchased e-books
                                                                                                                                            • Figure 65: Attitudes towards paying for sharing purchased e-books, by consumer classification, March 2019
                                                                                                                                        • Appendix – Methodology and Abbreviations

                                                                                                                                          • Methodology
                                                                                                                                            • Abbreviations

                                                                                                                                            Digital Media Consumption (News, eBooks and Video) - China - June 2019

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