After success with WeChat, here’s how Tencent is building up the rest of its online media empire

While everyone’s talking about Tencent’s recent social media success with WeChat, the 16-year-old internet giant still has a vast web empire it’s building up that includes many other areas besides messaging. “Tencent’s focus has always been on building a strong social ecosystem for the growing Chinese mobile population,” says SY Lau, president of the Tencent Online Media Group, who oversees Tencent Video, the Twitter-like Tencent Weibo, and the company’s news portal.

An increasingly important new frontier for Tencent (HKG:0700) is China’s massive streaming video industry. The nation’s 450 million online video viewers watch 5.7 billion hours of videos every month, according to numbers from iResearch for mid-2013; it’s an arena that will grow to an estimated 700 million viewers by 2016. It’s important for sites to have quality content to bring in the kind of viewers that advertisers want to reach – and for ordinary people it’s also a welcome change from China’s staid and heavily restricted state TV network, CCTV, which until earlier this year showed few non-Chinese TV dramas or comedies.

Eyeballs on 318 million viewers

That leaves China’s top web companies with stakes in streaming content – like Youku, LeTV, Baidu, and Tencent – battling to secure the rights to licensed TV series and movies from China, South Korea, the US, and the UK, such as BBC’s Sherlock and Netflix’s Orange Is The New Black.

Lau – who’s also a senior executive vice president at Tencent – says that new numbers provided to the company by iResearch show Tencent Video is still ahead of Youku as the country’s top streaming site with 318 million PC-based monthly users in March. Each site uses different metrics, so rival video sites will demur. Lau adds that ComScore numbers show Tencent Video got 573 million PC-based video views in March, which is also ahead of its rivals. “Between 40 to 50 percent of Tencent Video traffic comes from mobile platforms,” he explains to Tech in Asia.

The Hulu-esque site is still spending big to secure the exclusive broadcast rights to what people want to see, such as The Voice of China and live streams for the 2014 World Cup. Lau adds:

We also cover close to 140 popular domestic drama programs, achieving five billion broadcasts each month, over 2,500 hours of Western drama and 200 domestic and Hollywood blockbusters. Tencent Video will also be creating 500 original dramas and more than 30 in-house programs to build our position as the leading video platform in China.

The in-house programs can be made at Tencent’s own studios, pictured below:

The company claims it saw one million online views for the premiere of its self-produced drama series Exploration Spirit and over a billion views during the course of three weeks for its Chinese version of the wacky quiz show Are You Normal, America?. That’s licensed from the Oprah Winfrey Network.

China’s online viewers can watch anything from sappy romantic comedies to Masters of Sex, which shows that the nation’s online video streaming boom has remained remarkably free of interference from China’s conservative and puritanical media regulators. However, the industry was rocked by an online ban on four surprisingly innocuous TV shows in April. A couple of days later it emerged that those series – including The Big Bang Theory, which has a cult following in China – had been picked up by state broadcaster CCTV. That poses a risk to any video site that has paid big bucks for a licensing deal only to be usurped by CCTV. “Tencent has not faced such challenges yet,” observes Lau.

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