×
You will be redirected back to your article in seconds

China to Become World Leader in 5G, But Political Controls May Damp Content Industry

China’s ambition to lead the development of 5G mobile networks will make the country the world’s largest market for over-the-top (OTT) content over the next five years. But Beijing’s stringent controls over production and imports of creative content will be the greatest obstacle to China’s dream to be a true global leader in OTT.

The 5G technology will not be in place until 2020, but its development is among the top priorities on China’s national agenda.

Besides playing an active role in joining other world powers to implement the global standard, the Chinese government has put huge emphasis on 5G development as part of it “Made in China 2025” plan, as well as the 13th five-year-plan. There is a target for commercial launch of 5G in 2020, according to Wilson Chow, leader of China-Hong Kong Technology, Media and Telecommunications at PwC in China and Hong Kong.

The China Academy of Information and Communications Technology, which is under the Ministry of Industry and Information Technology, published a report on 5G earlier this year. It forecast the 5G market will account for $167 billion (RMB1.1 trillion) — the equivalent of 3.2% of China’s GDP in that year. Combined investment in 5G by the three domestic phone networks – China Mobile, China Unicom and China Telecom – reach $47.5 billion (RMB313 billion) in 2023.

The 5G transmission speed is expected to be 10 to 100 times faster than 4G – fast enough to download a two-hour film in high-definition in just 12 seconds, according to one estimate.

With higher speed and broader bandwidths, the market for OTT content will expand tremendously particularly in mainland China. Analysts at CCS Insight and Jefferies forecast 5G subscribers will reach more than half a billion by 2022 and 2023, accounting for 50% of the global subscribers.

“The 5G application, which can enhance the speed and stability of video streaming and is capable of the delivery of super high-definition videos, will substantially improve the user experience and thus help boost the development of OTT industry in China,” said Chow.

Chow says creation of local content ranging from short videos and movies to drama series and sports content will grow to meet users’ needs. International content including Hollywood movies and content by global OTT players will also be in demand, he added.

The figures might be promising but China’s increasingly stringent control over content and the internet will be a great obstacle to the country’s OTT industry development. This summer, China introduced new cyberspace laws as a new measure to tighten its control of the internet within Chinese borders. That has dealt a huge blow to the foreign formats segment.

“Such controls may have an impact on the scope of content development, such as politically sensitive contents. Censorships and restrictions of the import of foreign contents will also affect what could’ve been promising future for OTT industry in China,” Chow said.

Chow said over the next five years, China will witness a significant shift of viewing video content from free-to-air TV to subscription video (SvoD) service. That in turn gives rise to more steady and sustainable growth of the industry.

“We expect the market to grow at a compound annual growth rate of nearly 20% over the next five years, and the expected revenue to be generated by the industry is forecast to reach nearly $4.5 billion in 2021. Subscriber level of leading SVoD portals is expected to grow to more than 180 million for each,” said Chow.

Popular on Variety

More Digital

  • Venn co-founders

    VENN Raises $17 Million to Launch a Cheddar-like TV Network for Gaming

    Video game industry veterans Ariel Horn and Ben Kusin have raised a massive $17 million seed funding round to launch a new gaming-focused TV network called VENN. Short for Video Game Entertainment and News Network, VENN wants to mix esports with Twitch-style video game streaming and other gaming-related entertainment content when it launches in 2020. [...]

  • Amazon Music

    Amazon Music Unveils HD: the ‘Highest Quality Audio’ for Streaming

    Amazon Music today became the first of the three major streaming services to offer high-definition sound with the launch of Amazon Music HD. According to the announcement, the service offers a new tier of high quality, lossless audio with more than 50 million songs in High Definition, and millions of songs in Ultra High Definition, which it claims [...]

  • United Talent Agency Reveals New Logo

    UTA Unveils New Logo, Corporate Image

    UTA raised the curtain Monday on a new corporate logo. The three-dimensional image is meant to emphasize the talent agency’s focus on uniting ideas, opportunities and talent. Building signage with the new logo will go up next month at UTA’s headquarters in Beverly Hills. “Our new identity captures the multiple facets and intersections of our [...]

  • Altice One set-top

    Amazon Prime Video Coming to Altice's Optimum, Suddenlink Cable Services

    Altice USA plans to launch Amazon Prime Video for Optimum and Suddenlink cable customers nationwide in the next few months, under a pact announced Monday. Altice is the third pay-TV operator in the U.S. with a distribution deal for Amazon Prime Video, after Comcast and Cox Communications. The cable operator is adding Prime Video to [...]

  • youtube leanback screenshot

    YouTube to Shut Down Leanback Web TV Interface on October 2

    YouTube is getting ready to retire its TV-optimized browser interface, also known as YouTube Leanback, on October 2, Variety has learned. The move comes as YouTube is putting a bigger emphasis on its native TV apps, but also represents a blow to users who directly connected their PCs to their TVs. YouTube started to inform [...]

  • Terminator: Dark Fate

    Paramount & Adobe Launch ‘Terminator: Dark Fate’ Trailer Remix Contest

    Adobe has teamed up with Paramount Pictures to launch a remix contest for the trailer of “Terminator: Dark Fate,” which is set to debut in theaters November 1. The winner of the contest will get $10,000 as well as a one-year Adobe Creative Cloud membership and a private screening of the movie for up to [...]

More From Our Brands

Access exclusive content