July 07, 2017

Big Video Global Summit - 5G Development Expected to Expand OTT in China

000063 CH, 700 HK, BABA, BIDU, TCEHY
By Wei Ying
Widening deployment of 4G and 5G services in China is expected to speed consumer adoption of mobile and over-the-top (OTT) video during the next one to two years, opening up opportunities for OTT advertising, according to speakers at the Big Video Global Summit last week.

The Big Video Global Summit, held during Mobile World Congress in Shanghai last week, brought together hundreds of participants from carriers, like China Telecom Corp. (728 HK) and China Mobile Ltd. (941 HK), as well as video technology firms, and a key topic of discussion was how the development of 4G and 5G services in China could affect over-the-top (OTT) video spending momentum in the near future.

Hua Haixin, vice president of ZTE Corp.'s (000063 CH) Shanghai office, said high-resolution 4K video services have been the foundation of his company’s strategic development since 2016. According to Hua, China’s three leading service operators, China Mobile, China Telecom and China Unicom Hong Kong Ltd. (762 HK), together had 50 million video users during 2006-2016; the number of video users is expected to expand by another 50 million in 2017, and the total number of Chinese video users could be 200 million in 2018. “Video service based on 4K resolution technology is accelerating in 2017,” he said.

4K video services, according to Hua, could provide a one-stop advertising spending solution to advertisers through precision targeting of consumers based on big data. “The interaction between users and OTT content across the big television screen, as well as video mobile devices, can be tracked and measured, enabling more accurate ad targeting and efficient spending,” Hua said.

Mary Zhang, an executive from China Telecom, Jiangsu Province, spoke about how China Telecom is opening more video traffic to consumers to meet burgeoning demand. “We are offering a package of 199 [yuan] per month for 40G of mobile data,” she said.

OTR Global’s April video note discussed how China’s leading video sites, Alibaba Group Holding Ltd.’s Youku, Tencent Holdings Ltd. and Baidu Inc.’s iQiyi, have collaborated with TV set manufacturers to develop OTT content ecosystems, with OTR Global sources expecting advertisers to increase spending on video connected to OTT once a trusted third-party monitoring company steps in.

Zhang expressed similar optimism about the monetization opportunities of OTT. “The big OTT connected family screen will help ecommerce companies grow their revenues through family consumption,” Zhang said.

Reflecting the rapid emergence of OTT, the conference's exhibition area highlighted 5G technology and products designed to connect end users to rich OTT video, including 360-degree live-streaming, VR-enabled cinema, fitness and interior design, intelligent family devices and no-cashier supermarket payment systems.