TV

© 2016 Beyond Summits 2

Summary:

• TV media market has tended to be saturated with almost 99% coverage rate in 10 years. However, Chinese are losing their interests in watching TV. The average age of real TV audience is getting older. The biggest proportion of TV audience is constituted by audience aged over 45 years old. The older TV audience are more likely to be heavy TV users.

• In terms of TV programs, Chinese TV content is mainly produced by CCTV and provincial satellite TVs. However, TV production and broadcasting will further separate in the future, and high-quality content will be incline to broadcast through Internet platforms. Eventually, the number of TV audience will decrease. More people will choose to watch videos online instead of on TV.

• Since 2014, the advertising on TV has seen a dropping trend. In the first half of 2015, TV ads even showed a negative increase. CCTV and provincial satellite TVs were still two major platforms for business to place ads into.

© 2016 Beyond Summits 3

Summary:

• In 2015,TV programs were mainly broadcasting about TV series, news and various shows,accounting for 57.1% of all programs. The top five provincial TV channels swept most high-rating programs.

• The watching length of TV variety shows had a significant increase in 2015. Sat-TV variety shows' average rating was the highest in 2015. With the rapid development of variety shows and IP TV dramas, a rising trend of title sponsorship and ads were seen in 2015.

• What users watch on TV is quite similar with what they watch online. TV series, variety shows, movies and news were their favorites.

• Those who watch TV everyday accounted for 57.4%. Watching TV becomes an emotional communication way for families. TV audience will turn to smart phones to connect with Internet friends when watching TV.

© 2016 Beyond Summits 4

In 2015, TV media’s coverage rate tended to be saturated, close to 99%.

TV Program’s Coverage Rate from 2005 to 2015

100% 99% 98.8% 98.6% 98.4% 99% 98.2% 98% 97.8% 97.6% 98% 97.2% 97.0% 97% 96.6% 97% 96.2% 96% 95.8% 96% 95% 95% 94% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source:National Bureau of Statistic © 2016 Beyond Summits 5

In the past five years, Chinese people tended to spend less time on TV. As of 2015, daily TV watching length was 156 minutes.

Chinese Daily TV-watching Length (mins) 2011-2015

170 168 169

165 165

161 160

156 155

150

145 2011 2012 2013 2014 2015

Source:CSM Rating TV market review 2015 © 2016 Beyond Summits 6

In the past five years, loyal TV viewers have remained long watching time, but the coverage rate of TV has been declining year by year, and the scale of TV viewers has continued to shrink.

Chinese Daily TV-watching Length (mins) per Capita and TV Coverage Rate from 2005 to 2015(Loyal Audience) TV-watching length (mins) per capita Coverage Rate 260 75%

252 251 248 69.5% 247 70%

239 240 68.4% 66.6% 65%

64.0% 62.3% 60% 220

55%

200 50% 2011 2012 2013 2014 2015

Source:CSM Rating China TV market review 2015 © 2016 Beyond Summits 7

Audience aged over 45 took the largest proportion. In addition, the older audience are more likely to be heavy TV users.

TV Audience Characteristics by Age in 2015 Age Proportion Concentration Rate%

25% 250 21.5%

20% 177.0 200 17.7% 15.5% 14.9% 14.9% 15% 163.0 150

130.0 10% 100 8.5% 7.0% 87.6 80.0 5% 68.1 50 60.0

0% 0 4-14 15-24 25-34 35-44 45-54 55-64 over 65

Source:CSM Rating China TV market review 2015 © 2016 Beyond Summits 8

For the audience under 54 years old, the TV-watching length per capita decreased year by year, while the number of audience aged over 55 were steadily rising.

TV Watching Length for Audience of Different Ages in 2015 (mins/day) 2013 2014 2015

300 278 257 250

202 200

150 134 126 106 100 86

50

0 4-14 15-24 25-34 35-44 45-54 55-64 over 65

Source:CSM Rating China TV market review 2015 © 2016 Beyond Summits 9

In 2015, the viewing shares of CCTV and provincial sat-TV channels decreased rapidly, while the ground channels' viewing shares began to rise.

Viewing Shares from 2013 to 2015 Viewing Shares During Prime Time from 2013 to 2015 2014 2015 2014 2015 40% 40%

33.2% 31.7% 32.3% 28.7% 29.8% 30% 28.2% 30% 24.5% 25.4% 24.2% 24.4% 21.3% 20.6% 20% 20%

12.4% 12.0% 9.4% 9.5% 10% 9.0% 8.6% 10% 7.1%7.9%

0% 0% CCTV provincial sat-TV provincial non- local channels other channels CCTV provincial sat-TV provincial non- local channels other channels sat TV sat TV

Source:2015 TV and Video Dual-Screen Report © 2016 Beyond Summits 10

In 2015, CCTV-Comprehensive, Hunan Satellite TV, and CCTV-News(Chinese) still ranked Top 3. But the market shares of the two CCTV channels decreased, while Hunan TV's market share kept increasing significantly.

Channel Market Share in 2014(%) Market Share in 2015(%)

CCTV-Comprehensive 5.2 4.7 Hunan Satellite TV 3.4 4.0 CCTV-News(Chinese) 3.2 3.0 CCTV-Movie 2.6 2.9 Zhejiang Satellite TV 2.3 2.8 CCTV-Variety Shows 2.7 2.6 CCTV-International News 2.6 2.6 Satellite TV 2.5 2.2 CCTV-Sports 2.5 2.2 CCTV-Series 1.9 2.2

Source:2015 TV and Video Dual-Screen Report © 2016 Beyond Summits 11

Compared with other kinds of media, TV has absolute advantages in promoting the brand image and covering more audience.

The Advantages of TV Broadcasting TV Internet Outdoor Radio Print

Enhance The Brand Image 91% 12% 57% 13% 37%

Wider Coverage 87% 31% 36% 21% 10% Effects Can Be Quantified / 30% 56% 13% 6% 8% Accumulated Transmission for a Second 28% 37% 18% 4% 23% Time High Return On Investment 20% 10% 9% 9% 3% Strong Ability Of Sales 17% 36% 17% 11% 4% Conversion Accurate Ad Placement 10% 69% 18% 24% 19%

Creative And Flexible 8% 76% 18% 12% 22%

Cheap Price 4% 13% 18% 51% 21%

More Interactive 3% 84% 6% 15% 3%

Source:CTR Media Intelligence "2016 advertisers marketing trend survey" © 2016 Beyond Summits 12

TV was still the most important media for advertisers, who have invested 37% of the total marketing budget into TV ads in 2016.

Media Buying in 2016

Other, 7% TV, 37%

Radio, 4% Print, 4%

Outdoor, 12%

Internet (PC), Internet (mobile), 16% 20%

Source:CTR Media Intelligence "2016 advertisers marketing trend survey" © 2016 Beyond Summits 13

The total amount of TV ads continued to decline since 2013.

TV Advertising in 2015 TV Ads Growth Rate

6,100 12% 6,045 6,050 6,024 10% 9.6% 6,000 8% 5,950 6% 5,900 4% 5,850 2% 5,800 5,760 0% 5,750 -0.5% 5,700 -2%

5,650 -4% -4.6% 5,600 -6% 2013 2014 2015

Source:CSM TV Advertising and Competitive © 2016 Beyond Summits 14

In 2015,The provincial satellite TV ads significantly increased.

TV Ads in 2014 & 2015 (Billion Yuan) 2014 2015

300

250 239 235.5

200 177.1 158 150

98 100 91.6 59 49 48.2 50.0 50

0 CCTV Provincial TV Provincial Terrestrial Provincial Capital City Other Channels Channels Channels Source:CSM TV Advertising and Competitive © 2016 Beyond Summits 15

In 2015, among the Top 10 provincial TVs, Jiangsu satellite TV kept the leading position in ad placements. The ads placed on Top 10 provincial capital city TVs have dropped to different extent.

2014 2015 2014 2015

Provincial Ad Ad Provincial Ad Ad TV Placement Placement Capital Placeme Channel Channel Placement (billion (billion City TV Channel Channel nt (billion yuan) yuan) (billion yuan) Jiangsu Satellite Jiangsu Satellite yuan) 1 10.67 11.27 TV TV Guangzhou TV Guangzhou TV 1 8.95 5.35 2 Henan set 10.52 Hubei Satellite TV 10.44 Station Station 2 Hefei TV Station 4.76 Kunming TV Station 4.52 3 Hubei Satellite TV 8.76 Henan set 9.73 3 Kunming TV Station 4.66 Nanjing TV Station 4.21 Tianjing Satellite 4 Dragon TV 8.57 8.8 TV 4 Wuhan TV Station 4.31 Hefei TV Station 4.2 Shandong Satellite Shandong Satellite 5 8.52 8.77 TV TV TV 5 Nanjing TV Station 4.25 3.37 Tianjing Satellite Zhejiang Satellite Station 6 8.18 8.57 TV TV 6 Xi’an TV Station 3.74 Xi’an TV Station 3.09 Zhejiang Satellite 7 8.11 set 8.55 TV Zhengzhou TV 7 3.34 Wuhan TV Station 3.07 Southeast Station 8 7.94 8.17 Satellite TV TV Zhengzhou TV 8 Changsha TV Station 3.22 2.28 Guizhou Satellite Heilongjiang Station 9 7.87 8.06 Hangzhou TV TV Satellite TV 9 Taiyuan TV Station 2.34 1.96 Station 10 Satellite TV 6.53 Hunan Satellite TV 7.85 10 Hai’erbing TV Station 2.03 Nanning TV Station 1.92 Source:CSM Rating China TV market review 2015 © 2016 Beyond Summits 16

The number of hard-sell TV ads has declined, while the number of ads implanted in the content showed an increase of 30%, indicating the great potential of soft-sell TV ads.

The Number of Hard-sell and Soft-sell TV Ads in 2015 H1 and 2015 H2 2015H1 2015H2

6,000 5,196 4,928 5,000

4,000

3,000

2,000

1,000 380 493

0 Soft-sell Hard-sell

Source:Jirang © 2016 Beyond Summits 17

In 2015, the local satellite TV channels were preferred by advertisers to place ads.

CCTV vs Satellite TV in Ad Placements Ad Placements in Satellite TV Q1-Q4

Q4 403

CCTV, 79

Q3 315

Q2 244

Satellite TV, 636 Q1 252

Source:Jirang © 2016 Beyond Summits 18

In 2015,the TV programs were mainly about TV series, News and variety shows, accounting for 57.1% of all the programs.

Viewing Shares of Programs in 2015

TV series News TV series, 30.0% Variety Domestic services Topics Teens Movies Sports News, Legal 14.1% Music Finance Topics, 6.5% Drama Domestic Variety, 13.0% services, Education 8.2% Others

Source:CSM Rating China TV market review 2015 © 2016 Beyond Summits 19

In 2015, the provincial TVs relied more on TV series and variety shows to get a high rating. However, CCTV channels focused more on TV series and News. CCTV Provincial sat-TV Provincial non-sat TV Local channels TV Program broadcast viewing broadcast viewing broadcast viewing broadcast viewing proportion% proportion% proportion% proportion% proportion% proportion% proportion% proportion% TV series 13.8 16.5 31.9 39.5 26.9 32.5 26.8 34.9 News 12.1 16.8 8.7 6.6 9.4 16.8 12.4 24.4 Variety 8.8 13.3 7 17.9 6.8 8.8 4.9 5.1 Domestic 6.7 5.3 11.4 8.2 18.7 11.5 19 9 services Topics 20 10.5 14.3 4.6 7.3 4 8 5.6 Teens 3.4 5 8.3 6.6 3.4 2.4 2.9 1.8 Movies 4.9 8.9 1.9 1.8 4.9 3.5 1.7 1.3 Sports 10.1 6.2 0.8 0.4 3 2.9 1 0.6 Legal 2.5 2.8 0.6 0.4 1.7 2.4 2 2.4 Music 4.2 2.7 0.6 0.3 0.5 0.1 1.0. 0.2 Finance 2.8 1.7 1.1 0.5 0.8 1.2 0.8 0.4 Drama 1.7 0.7 0.4 0.1 0.8 0.3 0.3 0.5 Education 0.6 0.2 0.1 0 0.3 0 0.3 0 Foreign 0 0 0 0 0.1 0 0 0 其它 8.3 9.3 12.8 13 15.4 13.5 18.8 13.7

Source:CSM Rating China TV market review 2015 © 2016 Beyond Summits 20

In 2015, among all CCTV channels, CCTV-Comprehensive got the highest rating, followed by CCTV-Movie, CCTV-Variety Shows and CCTV-News(Chinese).

2015 CCTV Channels’ Ratings

CCTV-Comprehensive CCTV-Finance CCTV-Comprehensive, CCTV-Variety Shows 17.6% CCTV-International News CCTV-Children, 6.0% CCTV-Sports CCTV-Movie CCTV-Variety Shows, 10.0% CCTV-Millitary & Agriculture CCTV-Series CCTV-News(Chinese), 10.1% CCTV-Documentary CCTV-International News, CCTV-Science & Education 9.0% CCTV-Drama CCTV-Society & Law CCTV-News(Chinese) CCTV-Sports, 7.0% CCTV-Children CCTV-Series, 8.6% CCTV-Music CCTV-Movie, 10.4% CCTV-News(English) CCTV-Sports Events

Source:CSM Rating China TV market review 2015 © 2016 Beyond Summits 21

The watching length of TV variety show had a significant increase in 2015.

Variety Shows Watching Length per Capita and Growth Rate from 2011 to 2015 Watching length(mins)per capita Growth rate 6,980 7,000 11% 10.1%

9% 9.3% 6,800 7% 6,630 6,587 5% 6,600

3.9% 3% 6,386 6,400 6,340 1%

-1% 6,200 -3% -4.4% -3.1% 6,000 -5% 2011 2012 2013 2014 2015

Source:Analysis on the Rating of Variety Shows in 2015 © 2016 Beyond Summits 22

Due to the fierce competition of TV variety shows in the weekend, some TV channels were forced to broadcast their shows on the weekday, resulting in a substantial increase of ratings on Wednesday.

Weekly Watching Length of Variety Shows per Capita and Growth Rate 2011-2015 2013 2014 2015 growth rate

30 30% 25.0% 25 20%

20 10%

15 0%

10 -10%

5 -20%

0 -30% Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Source:Analysis on the Rating of Variety Shows in 2015 © 2016 Beyond Summits 23

Audience of different ages preferred different variety shows. Audiences aged under 54 preferred variety shows in provincial TVs, while those aged over 54 year old preferred variety shows in CCTV.

Watching Length(mins)of Variety Shows Age CCTV Provincial TV Ground Channels Other Channels

4-14 1,128 3,482 659 14

15-24 1,014 2,988 733 27

25-34 1,179 2,886 861 34

35-44 1,775 3,229 1,054 25

45-54 2,894 3,889 1,971 39

55-64 4,383 3,894 2,678 33

Over 65 5,573 3,393 2,352 28

Source:Analysis on the Rating of Variety Shows in 2015 © 2016 Beyond Summits 24

Affected by related policy, the rating of variety shows in the provincial satellite channels has increased significantly in 2015.

The Proportion of Variety Shows in All Programs 2014-2015 2014 broadcast proportion 2015 broadcast proportion 2014 ratings 2015 ratings

20% 20%

17.9% 18% 16% 16%

14% 13.3% 12% 12%

8.8% 10% 8.8% 8% 7.0% 6.8% 8% 4.9% 6% 5.1% 4% 4%

2%

0% 0% CCTV provincial sat-TV provincial non-sat TV local channels

Source:Analysis on the Rating of Variety Shows in 2015 © 2016 Beyond Summits 25

The variety shows of provincial satellite channels had got the highest ratings in 2015.

The Ratings of Variety Shows Broadcasting in Different Channels 2014-2015 2014 ratings 2015 ratings

50% 47.8%

40%

32.3% 30%

20%

10%

0% CCTV provincial sat-TV provincial non-sat TV local channels other channels

Source:Analysis on the Rating of Variety Shows in 2015 © 2016 Beyond Summits 26

Hunan Sat-TV variety shows had the highest average rating in 2015.

Variety Shows' Average Ratings in the Evening in 2015

1.5 1.304

1 0.891

0.655 0.605

0.5 0.461

0 Hunan Satellite TV Zhejiang Satellite TV Jiangsu Satellite TV Dragon TV Satellite TV

Source:CSM50 4+ © 2016 Beyond Summits 27

The variety shows competed fiercely with each other during the golden time of Friday and Saturday, forcing the TV shows to arrange their broadcasting schedule on Wednesday and Sunday.

Viewing Trends Of TV Variety Shows Per Week

1.5

1.181 1.040 1

0.696

0.512 0.440 0.5 0.378 0.393

0 Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Source:CSM50 4+ © 2016 Beyond Summits 28

In 2015, the number of first-tier sat-TV programs rose to 42, accounting for 84%. The proportion of Zhejiang satellite TV and Hunan satellite TV programs remained unchanged, but Zhejiang satellite TV programs got a higher program ranking.

Shares of Top Variety Shows Of Different Sat-TVs

24% Zhejiang Satellite 24% TV 16% Dragon TV

12% 32% Hunan Satellite TV 22%

Jiangsu Satellite TV 18% 20% 10% Other TV

20%

Source:CSM50 4+,Outer Ring is 2015,Inner Ring is 2014 © 2016 Beyond Summits 29

In recent years, Matthew Effect was obviously seen in variety shows. Among the Top 200 Sat-TV variety shows, Top 20 of them have contributed to 65% of the total views.

The Proportion of Views of TOP 200 Sat-TV Variety Shows in 2015

Others, 6%

Top 41-60, 9%

Top 1-20, 65%

Top 21-40, 20%

Source:Provincial TV variety shows list © 2016 Beyond Summits 30

In recent years, seasonal variety shows are becoming more popular. Among Top 100 sat-TV variety shows, almost 75% of the total views were brought by seasonal variety

shows. Daily Broadcast 2.2%

Provincial Variety Show TOP100

Weekly Broadcast 25.6%

Seasonal Broadcast 72.2%

Source:Provincial TV variety shows list © 2016 Beyond Summits 31

In 2015, there were still diversified kinds of TV variety shows, but the number of outdoor shows have increased significantly.

The Number of Top 50 Sat-TV Variety Shows by Category 2014-2015 2014 2015

10

8 8 8 7 6 6 6 5 4 4 4 4 4 4 4 3 3 3 3 3 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0

Source:CSM50 4+ © 2016 Beyond Summits 32

In 2015, almost all the TOP20 evening variety shows were broadcasted by Zhejiang TV, Hunan TV, Dragon TV and Jiangsu TV.

TOP 20 Sat-TV Evening Variety Shows in 2015(CSM50 4+)

Program Channel Ratings(%) Market Share(%)

The Voice of China 4 Zhejiang Satellite TV 4.865 16.01 Running Man 2 Zhejiang Satellite TV 4.756 15.55 Running Man 3 Zhejiang Satellite TV 4.310 14.43 Running Man 1 Zhejiang Satellite TV 3.763 11.39 I am A Singer 3 Hunan Satellite TV 2.723 12.53 Xiao Ao Jiang Hu 2 Dragon TV 2.320 7.66 Where Are You Going Dad 3 Hunan Satellite TV 2.262 10.75 Happy Camp Hunan Satellite TV 2.195 6.11 Go Fighting Dragon TV 2.151 7.02 Challenger Alliance Zhejiang Satellite TV 2.118 6.00 Super Brain 2 Jiangsu Satellite TV 2.102 6.85 Hunan Satellite TV 2.026 9.76 You Are the One Jiangsu Satellite TV 1.770 5.83 Wonderful Friends Hunan Satellite TV 1.699 7.58 Hunan Satellite TV 1.544 4.28 Successor Beijing Satellite TV 1.477 4.51 Hidden Energy Zhejiang Satellite TV 1.432 4.48 Dad came back Zhejiang Satellite TV 1.430 4.13 Fight For Her Jiangsu Satellite TV 1.356 3.95 I Like the Challenge Dragon TV 1.306 6.23 Source:CSM50 4+ © 2016 Beyond Summits 33

The title sponsorship for those popular variety shows are becoming more expensive, and are mainly sponsored by advertisers from FMCG industry.

2013-2015 Variety Show Title Sponsorship

Channel Program Quarter Year Fees Title Sponsorship

Hunan Satellite TV I am A Singer S1 2013 60million Liby Laundry Liquid S2 2014 0.235billion Liby Laundry Liquid S3 2015 0.3billion Liby Soap Hunan Satellite TV Where Are You Going Dad S1 2013 60million 999 S2 2014 0.312billion Yili QQ Star S3 2015 0.5billion Yili QQ Star Zhejiang Satellite TV The Voice of China S1 2012 60million JiaDuoBao S2 2013 0.2billion JiaDuoBao S3 2014 0.25billion JiaDuoBao S4 2015 0.3billion JiaDuoBao Zhejiang Satellite TV Running Man S1 2014 0.13billion Lamando S2 2015 0.216billion Ambrosial S3 2015 0.338billion Meilishuo Jiangsu Satellite TV Super Brain S1 2014 60million Gionee S2 2015 0.25billion SATINE Dragon TV Go fighting! S1 2015 0.12billion TMALL Source:CSM50 4+ © 2016 Beyond Summits 34

With the development of Internet TV, the users return to the living room. On one hand, users can enjoy Internet content through a large screen in the living room; on the other hand, promoted by the Internet TV industry, a large number of users have begun to try some new entertainment in the living room. The trend of Chinese audience returning to the living room in 2016

Intelligent TV, with more features, more intelligent With Interactive TV, the user and controllable. does not have to accept the television program passively. Users have got used to the internet services, and are Habits of using mobile more demanding for large electronic products screens accelerate the upgrade of electronic devices.

Source:2016 China’s Internet TV Industry Research Report © 2016 Beyond Summits 35

Users who watch both TV and online videos have exceeded 50%,while TV-only audience was less than 45%. TV-only audience will keep decreasing in the future, and there will be more audience who enjoy both media.

TV audience Online video (98%) audience(59%)

Both TV and online video viewers(54%)

TV-only audience(44%) Online video only audience(5%)

Source:2015 TV and Video Dual-Screen Report © 2016 Beyond Summits 36

In 2015, although lots of audience still consumed quite an amount of time on TV, but the time spent on the online videos were rising for users of different ages.

Time Spend on Television and Online Videos in 2015 OTV TV

100%

80% 57% 55% 54% 55% 57% 59% 62% 60%

40%

43% 45% 46% 45% 43% 20% 41% 38% +1% +1% +1% +1% +2% +2% +2%

0% ALL 15-19 20-24 25-29 30-34 34-39 40+

Source:2015 TV and Video Dual-Screen Report © 2016 Beyond Summits 37

In the coming few years, the smart TV will become more popular in China. In 2016, smart TV’s penetration will reach 85%.

Smart TV Sales in China from 2012 to 2018 Flat-panel TV sales(million) Smart TV sales(million) permeability

80 100% 93.0% 90.2% 90% 85.0% 80% 60 76.4% 56.2 52.5 52.3 70% 49.1 46.6 47.4 44.5 45.8 61.7% 60% 41.8 41.7 40 53.8% 35.6 50%

38.5% 28.3 40% 24.0 30% 20 16.1 20%

10%

0 0% 2012 2013 2014 2014 2016E 2017E 2018E

Source:2016 China’s Internet TV Industry Research Report © 2016 Beyond Summits 38

Smart TV users accounted for 70% of all the pre-order consumers. Smart TV users increased rapidly with a 27.8% growth rate.

Smart TV Users and Pre-order Consumers User Growth Year on Year

smart TV other TV 100% 30% 27.8%

30.3% 80%

20% 60% 75.1%

40% 69.7% 10%

20% 24.9% 2.4%

0% 0% Current User Group Pre-order Group all smart TV

Source:China 's smart TV market research report © 2016 Beyond Summits 39

People aged 19-40 are the most important audience for Internet TV, and most purchasing decisions were made by them.

China Internet TV Users in 2016 All users Users with the longest watching time Buying decision makers

19-40 76.2% 48.7% 67.2%

over 40 75.2% 37.7% 26.0%

8-18 44.9% 9.0% 5.2%

0-7 35.2% 4.6% 1.7%

Source:2016 China’s Internet TV Industry Research Report © 2016 Beyond Summits 40

In 2015,netizens preferred to spend about 3 hours on TV. And evening prime time (8 p.m.-10 p.m.) was the peak watching time.

Time Internet Users Spent on TV in 2015 Time Period that the Internet Users Watch TV

over 7.74% 22:00-24:00 15.0% 5hours

4-5hours 8.69% 20:00-22:00 62.2%

3-4hours 14.98% 18:00-20:00 56.5%

2-3hours 25.50% 12:00-18:00 16.5%

1-2hours 31.67% 6:00-12:00 11.2%

under 1 11.43% 0:00-6:00 2.4% hour

Source:Iresearch © 2016 Beyond Summits 41

On weekdays, Internet users watch TV mainly at the prime time of the evening, while in the weekends, any time was comfortable for them to watch TV.

Time that Users Watch Internet TV in 2016 weekend workday

80% 71.1% 71.3%

60% 65.9% 67.1%

46.4% 46.5% 43.5% 43.9%

40% 31.5%

21.3% 27.3% 20% 21.8% 8.4% 18.5% 13.1% 10.8% 8.0% 9.9% 0% 0:01-7:00 7:01-9:00 9:01-12:00 12:01-14:00 14:01-17:00 17:01-19:00 19:01-20:00 20:01-22:00 22:01-24:00

Source:CSM Rating China TV market review 2015 © 2016 Beyond Summits 42

Those who watch TV everyday accounted for 57.4%. Accompanying with family members was the most important reason for Internet users to watch TV. Watching TV becomes an emotional communication.

TV Watching Frequency of Internet Users Why Internet Users Watch TV in 2014-2015 in 2014-2015 2015 2014 2015 2014 52.7% 57.4% Family companion Everyday 49.2% 53.8% Entertainment 47.1% 48.9% 19.1% 1-3 days a week 21.7% Obtaining Info 44.2% 43.5%

43.9% 18.5% Time-killing 4-6 days a week 42.2% 16.8% See particular 37.0% program 31.8% Less than 3 days a 5.1% month 7.7% Learning 23.3% 23.7%

Source:Iresearch © 2016 Beyond Summits 43

What internet users watch on TV are quite similar with what they watch online. TV series, variety shows, movies and news were Internet users’ favorites.

What Internet Users Watch on TV in 2015 What Internet Users Watch Online in 2015

TV Series 51.9% TV Series 52.1%

News 49.7% Movie 50.8%

Variety Show 45.7% Variety Show 38.9%

Movie 40.1% News 34.9%

Finance 28.2% Funny video 27.4%

Life 26.9% Finance 23.7%

Sports 25.8% Sports 20.9%

Music 20.4% Life 20.7%

Social survey 20.1% Documentary 20.3%

Military 19.7% Music 19.6%

Source:Iresearch © 2016 Beyond Summits 44

Smart phones were the most commonly used devices when Internet users were watching TV. The major reason is that they need to discuss and comment on programs with the others .

Devices Used by Internet Users While Why Internet Users Use Other Devices Watching TV in 2015 While Watching TV in 2015 2015 2014

Habit of using 52.2% Smartphone 69.8% smart-phone 48.3%

40.8% Avoid TV ads Desktop Computer 41.2% 32.3% or Notebook Selective TV 39.0% watching 40.2% Tablet 30.3% Discuss with 33.1% friends 27.8%

Don't Use 13.9% Interact with 28.9% friends 26.5%

Source:Iresearch © 2016 Beyond Summits 45

Social media has been one of the main channels for Internet users to interact with others when watching TV.

How Internet Users Interact with the Others when Watching TV in 2015 2015 2014

59.4% By Weibo/WeChat 55.1%

53.9% By QR code 42.0%

24.1% By SMS 26.0%

18.6% By TV app 13.3%

18.5% By phone 13.1%

Source:Iresearch © 2016 Beyond Summits 46

Most Internet TV users have positive attitudes towards ads to different extent. And most of the users can accept ads of no more than 30 seconds.

Internet TV Users' Attitudes Towards Ads The Length of the Ads That Internet TV in 2016 Users Can Accept in 2016

40% Interested to have 45.7% a closer look

30% 28.2% 26.0% just have a quick 35.4% glance 21.3% 20%

don't watch 12.8% 11.0% 9.2% 10%

Focus all attention 5.7% 2.1% 2.2% 0% 5s 10s 15s 30s 60s 90s 120s

Source:2016 China’s Internet TV Industry Research Report © 2016 Beyond Summits 47

Not so many Internet TV audience will frequently use mobile apps, and only 37.2% of them will use mobile apps every day.

Frequency of App Using for Internet TV Audience in 2016

Once every 2-3 days 19.5%

Several times everyday 19.1%

Once everyday 18.1%

Once every 4-6 days 13.0%

Once a week 11.6%

2-3 a month 9.9%

Once a month 4.9%

Not clear 3.9%

Source:2016 China’s Internet TV Industry Research Report © 2016 Beyond Summits Your Global All-media Marketer

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