Short videos go long on value

Homemade clips, livestreaming, mini-dramas jump in popularity, especially among younger generations

Gao Ruolin, 27, who works for a fashion magazine in Beijing, said she loves to upload original videos that portray her everyday life and peruse funny clips posted by other users on short-video platform Douyin, the Chinese version of TikTok.

Her first episode, about how to make Portuguese egg tarts, garnered more than 1,000 likes and over 150 comments. "I never thought my videos would be liked so much. I also interact with people who leave comments on my clips from time to time," she said.

Gao said she also pays attention to the latest news and information from video-sharing apps. "My free time tends to be fragmented and short, so browsing news on the platform is the perfect fit when I take the metro.

"I also prefer to buy what I need by logging onto the livestreamed sales shows of some key opinion leaders. My online shopping cart is stuffed with snacks, beverages, cosmetics and skincare products when the livestreaming ends."

Gao is among a growing group of tech-savvy young people who spend more time watching online short videos. They have created surging demand for high-quality original video content.

The number of users of internet audio and video in China reached 1.04 billion as of December, an increase of 4.94 percent year-on-year, surpassing that of instant messaging services, according to a report released by the 10th China Internet Audio and Video Convention, held in Chengdu, Sichuan province, in March.

The size of the country's internet audio-and-video industry rose 4.4 percent year-on-year to 727.4 billion yuan ($105.2 billion) in 2022, the report said.

As of December, 1.01 billion people regularly watched short videos in China, accounting for 94.8 percent of Chinese netizens. Users spent an average of 168 minutes each day on short videos in 2022, and those platforms became a primary source for news, information and learning.

The size of the short-video market reached 292.8 billion yuan last year, accounting for 40.3 percent of the internet audio-and-video industry. The number of livestreaming users grew to 751 million, making it the second-largest audio-and-video application category after short videos, the report said.

In addition, 42.7 percent of users purchased products after watching online videos or livestreams over the last half of 2022, up 27 percentage points from the same period in 2020, the report said. Young and middle-aged women living in first and second-tier cities and with advanced educational backgrounds are seen as the target group with the greatest potential for online videos and livestreaming programs.

Chinese video-sharing platform Douyin, which is owned by Chinese tech heavyweight ByteDance, and Tencent Holdings' video streaming site Tencent Video have recently reached an agreement to explore the joint promotion of both short and long videos, according to a statement from Douyin in early April.

Douyin said the company will be authorized to use Tencent Video's long-form video content, and rules about how secondary content is to be generated have also been clarified.

Users from platforms such as Douyin, Xigua Video and Toutiao, which are part of the Douyin Group, will be able to create short videos by using long content on Tencent Video.

Douyin said it has been seeking collaboration with long-form video platforms, adding that the agreement with Tencent will bolster the creation and dissemination of high-quality short-video content and provide a better experience for users.

Short-video companies' strengthening of copyright cooperation with long-video websites, which will bolster the development of the internet audio-and-video industry, is a burgeoning trend and will create mutual benefits for platforms, content creators and users, said Jiang Han, a senior researcher at market consultancy Pangoal.

Douyin announced a partnership with Netflix-like streaming platform iQiyi in July. The deal has authorized Douyin to create short clips based on iQiyi's long-form video content, including some of the latter's original TV series.

Gong Yu, founder and CEO of iQiyi, said such agreements are an important step for both parties to respect and protect intellectual property rights, explore mutual benefits and unlock new opportunities that will enrich the online video ecosystem.

Both Douyin and short-video platform Kuaishou are increasing investment in fast-growing livestreaming e-commerce, in which products are promoted in real-time broadcast sessions and mini-dramas. This is being done in order to explore new sources of revenue, diversify monetization methods and offer wide-ranging content to enhance user stickiness. Mini-dramas differ from traditional TV series in length, creativity, script design and filming style. Stickiness measures how likely customers are to keep purchasing a product.

The revenue from Kuaishou's livestreaming business increased 14.2 percent year-on-year to 35.4 billion yuan in 2022 from 31 billion yuan in 2021, mainly fueled by the 19.4 percent growth in average monthly paid users, according to the company's latest financial results.

The average daily active users of Kuaishou stood at 355.7 million last year, representing an increase of 15.4 percent from 308.2 million in 2021, while its average monthly active users rose 12.6 percent year-on-year to 612.7 million.

Kuaishou said it has continued to strengthen ties with top talent agencies while attracting top-notch livestreamers to provide users with high-quality livestreaming content.

Despite supply and fulfillment disruptions caused by the COVID-19 pandemic, the company's gross merchandise volume in e-commerce business surged by 30 percent on a yearly basis in the fourth quarter of 2022, with full-year e-commerce GMV reaching 901.2 billion yuan, up 32.5 percent year-on-year. GMV is the total monetary value of all goods and services sold by a business in a given time span.

Douyin is also eyeing lucrative livestreaming e-commerce. It has signed a partnership with Chinese retail giant Suning to carry out in-depth cooperation in multiple fields, such as supply chain services and livestreamed branding.

Dong Yuhui, a 30-year-old livestreamer who became popular when he worked for education training company New Oriental, has become a big hit by selling agricultural products in both Chinese and English through a livestreaming channel of Douyin. He garnered over 20 million followers within just 20 days in June, and raked in over 300 million yuan during last year's June 18 shopping carnival.

"Chinese consumers have become more rational and are paying more attention to the value of the things they buy," said Mo Daiqing, a senior analyst at domestic consultancy Internet Economy Institute. Competition in livestreaming e-commerce has also intensified as video-sharing platforms including Douyin and Kuaishou are diverting online traffic from traditional e-commerce platforms such as Taobao and JD, and attracting a new breed of users to their livestreaming rooms, Mo said. Competition among major short-video platforms will focus on improving the production quality of content and better monetizing long-term content operations.

The report from the China Internet Audio and Video Convention said more than half of short-video users had watched mini-dramas or variety shows that last less than three minutes in the past six months, while users aged below 19 represented 57.9 percent of total short-video users.

Mini-drama series have gained popularity among young people, as more internet users have turned to online options for entertainment amid the pandemic. Short-video platforms have accelerated their drive to expand in the mini-drama sector, with each episode lasting no more than three minutes and involving tight-knit plots.

Chen Yiyi, vice-president of Kuaishou and head of the company's entertainment business, said the daily active users who watched mini-dramas on Kuaishou had surpassed 620 million, and more than 100 mini-dramas had registered over 100 million views each by the end of 2022.

The company plans to offer cash incentives and more data flow support for content creators, strengthen copyright protection and work with content production organizations in an attempt to accelerate monetization.

Yu Ke, who is in charge of Kuaishou's mini-drama business, said in an earlier interview that the post-1990s generation represented more than 70 percent of all viewers of mini-drama series. Female viewers accounted for 68 percent, and the proportion of viewers living in first- and second-tier cities hit over 25 percent.

Douyin has rolled out paid mini-dramas, and users can choose to purchase each episode or the entire drama. Once purchased, the videos can be watched repeatedly without time limits.

"As users spend more time watching short videos, the short-video production model will continue to innovate, thus driving the development of the digital entertainment industry," said Zhang Yi, CEO and principal analyst of iiMedia Research, adding that competition in the short-video industry will be more intense.

Young people, whose free time tends to be fragmented and sporadic, are showing great enthusiasm for mini-drama series. The emergence of mini-dramas is conducive to enriching the content ecosystem of short-video platforms, enhancing user stickiness and enticing new users, said Ma Shicong, an analyst with Beijing-based internet consultancy Analysys.

"However, mini-drama series may not make money over the short term as the initial investment and production costs are high," Ma said, calling for more efforts to improve the production quality of content and explore diversified monetization models, including advertisements and paid content.