China Internet:Takeaways from Toutiao short video conference -ready for monetization

We were invited to attend a Toutiao short video conference in Beijing andtalked with different parties in this ecosystem. We witnessed robust productgrowth and monetization trends.

    Average daily video view on Toutiao’s short video platform achieved 3bn inOct 2017, +300% YoY. Every day, ~100 million users view short videos onToutiao platform and every user views 30+ short videos/day on average.

    Daily time spent reached 70mins, vs ~50mins spent by long video users.

    Short video time spent was 56% of Toutiao’s total time spent in 1H17.

    Over 95% short videos are OGC and PGC content. Typical length is ~3mins.

    Over 50% users frequently share and comment short video contents.

    Almost all users have shared or rated short video content in social platform.

    Average age of short video users is 27.8 years old and 63% of them arefemale. Average monthly income is RMB6,207. Fun, Life andEntertainment are the top 3 categories in short video.

    Comparing with long video, short video has more similar form and lengthlike ads. Users are also more casual and active when viewing short videowhich helps them to more easily accept and share advertising content.

    Over 72% of short video users have recognized ads in short-video content,86% of whom are willing to accept.

    Total advertising market’s growth was ~10% in 2016. Among which onlineadvertising still had 20% YoY growth. Online video is the most robustcategory with a ~50% YoY growth. Short video delivered over 100% YoYgrowth.

    Users are interested in those topics we mentioned and categories like Food,Apparel, Auto etc. KOLs and precise recommendation are well-received.

    We believe, thanks to the trend, those internet companies with a strong userbase, rich platform and smart distribution capability (like Baidu in our coverage)should benefit most. The short video in Baidu news feed products alreadyshow early signals in our view. Some other smaller platforms with popularcategories (like ATHM in auto category) will also have opportunities if they candevelop a better user profiling system and smart distribution capability.