Net profits at Tencent, China’s social media, music and video giant, hit $10.9 billion in 2017, a gain of 74%. Revenues increased by 56% to $36.4 billion as the company claimed to have become the Chinese market leader in streaming video.
“Tencent Video achieved rapid growth in traffic and paying users driven by the popularity of our exclusive drama series, movies and self-commissioned content. We became the leading video streaming platform in China with over 137 million mobile (daily average users) during the fourth quarter and 56 million subscriptions as of the end of 2017,” the company said in its financial regulatory filing.
(According to Chinese online audience measurement consultancy iResearch, Tencent had increased that to 62.6 million paid-for subscribers by the end of February 2018.)
While Tencent Video and rival iQIYI, which is currently listing on the NASDAQ stock market, may use different methodologies for calculating subscription numbers, Tencent Video has clearly grown in the past year. Tencent said that mobile video DAU increased by 44% year-on-year to 137 million during the fourth quarter of 2017 and subscriptions increased by 121% year-on-year to 56 million as of the end of 2017.
Video, games, music and online books have benefited from interconnections with other parts of the group’s payment platforms, gaming and other digital media businesses, especially the WeChat messaging service. WeChat had close to 1 billion users, reporting 989 million monthly average users at the end of 2017.
Tencent did not disclose the net income contribution of Tencent Video. The unit is still in an investment phase, and like its direct competitors, is widely understood to be lossmaking. The company said that continuing to invest in long form and short form video content, remains a group priority, in order to further grow its subscriber base.