Tencent: Our Video Site is Now China’s Biggest, Ready to Charge for Hollywood Movies

In an all-too-rare instance of web companies and content providers teaming up to give users exactly what they want, China’s video sites are currently thriving, packed full of legit and fully licensed movies and TV shows from across the globe to watch, on-demand, and mostly for free. It’s somewhat ironic that Chinese web users will find it easier to stream the latest episode of Breaking Bad or watch the entire back-catalog of House, or view a recent Hollywood blockbuster, than their counterparts in the US.

Among the many strong contenders are video-streaming services from Chinese web giants such as Baidu (iQiyi), Sohu (Sohu TV), Youku, LeTV, PPS, and – the nation’s biggest online company – Tencent (HKG:0700), with its Tencent Video portal at V.QQ.com. To get a sense of the scale of Tencent Video, and why it even needs to compete in this pricey and crowded sector in the first place, we talked to Alex Liu (pictured below), general manager of Tencent’s online video department.

Alex states that Tencent Video is no longer playing catch-up, and is already a top choice for Chinese viewers:

iResearch’s UserTracker September 2012 report on video sites for web and PC clients shows Tencent’s 275 million monthly user coverage was more than Youku’s 266 million, making Tencent Video the number one platform in the industry. [… And] the October monthly coverage was 272 million, leading Youku again by six million.

There are a lot of metrics out there, of course. [UPDATE: It’s also worth noting that the iResearch data mentioned above does not include mobile/app views, so it’s not a full reflection of the market. Factoring in mobile video views, Tencent Video might not be top]. When we last got a sneak peak at some ComScore data a few months ago, it showed that the stickiest video streaming site in China, in terms of viewing time, was Youku, which was being used for 698 million hours of web video viewing. Tencent Video was third with 474 million hours of eye-ball time. But Tencent’s portal looks to be growing with the strongest year-long growth in the industry by iResearch’s stats [1]. In terms of importance, Tencent recently declared web video, among its very many products, to be one of its top five goals.

To Hollywood and beyond

Alex Liu.

Aside from all the stats, what these video sites need is quality, big-name content to bring in viewers – viewers who are dissatisfied with the dull and safe programming on CCTV, the state TV broadcaster. That means things that young Chinese really want to see (unlike CCTV), such as Korean romantic series, Taiwanese game-shows, American dramas, topical Chinese dramas and comedies, new Hollywood movies, the latest manga. And all that will bring in advertisers. Alex explains:

Tencent Video has always emphasized the importance of investing in the [broadcast] rights to TV series to create a TV viewing platform with diverse, high-quality content, and broad, total coverage. Tencent video already has 61 TV series with more than 100,000,000 plays, and our coverage includes 85 percent of the year’s popular TV content. In 2013, Tencent video wants to cover 80 percent of the content on the top satellite TV stations, plus have exclusives each month, and we’ve already signed agreements with 15 hot shows.

That extends even to Hollywood and other nations:

Self-produced shows

Mobile cinema

Paying up?