Over the past three years, Chinese web users who had once been drawn away from televisions towards mobile devices are making their ways back to the traditional living room setting for daily entertainment.
Along with the growth of living room tech market, China is expected to have over 250 million internet-connected televisions by the end of 2017, covering an estimated 700 million viewers calculated the country’s most common household of three members. The market formed around this sector is going to worth a whopping 630 billion RMB ($93 billion USD) by 2020, research institute AVC noted.
As warned, the change is upon us. Data from China’s top video streaming site Youku shows traffic from living room screens enabled by OTT (over-the-top) boxes has eclipsed PC as the second largest traffic source, next only to mobile devices. This is happening much faster than we expected, but it’s natural given the millennial generations who are well adapted to digital era are paying more attentions to family life after getting married or having a kid. Moreover, the living room scene is offering more engaging and interactive experiences ranging from video/music streaming, gaming and shopping.
The demographic change is significant. While watching television has once been considered old fashioned, it’s now become the favor among the young people. A dominating 74% of users on Alibaba’s entertainment platform, one of the largest in China, were under the age of 35.
It seems that the trend is here to stay, creating huge commercial opportunities for domestic companies. China’s internet giant Alibaba has speared its reaches into digital living room industry with the launch of Tmall boxes and content ecosystem surrounded it years ago.
The company is aiming at a more ambitious plan, of which Tmall box or hardware is just a small part. Through cooperation with television manufacturers, Alibaba announced this week its goal to create a premium content ecosystem for the Chinese-speaking community, mainly through capitalizing on the quality contents from Youku, which it has acquired in April this year.
Under the plan, Alibaba’s digital entertainment arm, which claims over 20 million daily operable users to date, will further integrate Youku Tudou’s businesses to create synergy effects in brand, content, data, membership and commercialization plans. Apart from Youku, the partnership involves a star-studded list of content providers from home and broad, such as Disney, BBC, Hasbro, DHX, LEGO, CCTC Animation, CJ, etc.
Educational content come as a top focus in Alibaba’s digital living room strategy given kids’ center position in family life. At the same event, two products were released for children: a mobile app and an OTT box both of which are dedicated for kid education contents.
Other highlights of the event include the 6.0 update for YunOS for TV, Youku VR and Youku 3D-VR camera.