[2014] 10 Things From the Past Year That Will Shape What You Watch on Friday Nights

It is safe to say that 2014 and 2015 will be two extremely important years for Chinese variety shows.

Regular article

The last variety show that could fairly be called "disruptive" was probably Hunan Satellite TV's Super Girl (《超级女声》) in 2005. Thanks to regulations from the State Administration of Radio, Film and Television (SARFT), a live broadcast on that scale, with the whole country taking part, has never been repeated. In 2014 the word "disruption" fit again, but this time no single program carried it. It came from an explosion in the number and kinds of shows, and from changes to the business model.

This year nearly 100 variety shows of all kinds aired on satellite channels, and more than 30 reality shows appeared in the fourth quarter alone. You used to watch on weekends, but shows competing for your attention now start rolling out on Wednesday. You surely also know that more and more people no longer sit in front of the TV: set-top boxes, phones, tablets and the apps on them are the real way in.

Here are this year's major events in the industry:

On November 19, Xiaomi took a strategic stake in iQiyi for US$300 million (about 1.8 billion yuan);

On November 12, Youku Tudou Group announced in Shanghai a strategic partnership with Xiaomi covering capital and business;

On October 30, at a joint strategy launch by Alibaba and Youku Tudou, Alimama, Alibaba's marketing platform, announced that it would use data and technology to support new video marketing models such as Youku's "shop while you watch" and Tudou's "Wanhuo";

In September, LeTV Pictures, founded in 2011, announced that it had closed a Series B round of 340 million yuan at a valuation of 4.8 billion yuan;

In August, iQiyi and Huace Film & TV announced that they would jointly fund a new company, Huace iQiyi Film & TV;

On April 28, Alibaba bought into Youku Tudou as a strategic investor and partner, taking a 16.5% stake and appointing its CEO, Lu Zhaoxi, to Youku Tudou's board.

The most discussed television news of 2014 was the Mango TV affair. In May 2014, Hunan Broadcasting System announced that self-produced programs to which Hunan Satellite TV held full intellectual property rights would from then on stream exclusively on Mango TV, and that it would stop selling internet rights to other video sites.

Whether in media commentary or in the analyses and arguments of anonymous insiders on Zhihu, the debate kept coming back to one question: Hunan Satellite TV has such strong content, so why let video sites make the money from it?

How much money is at stake? Some context: less than a month after Where Are We Going, Dad? (《爸爸去哪儿》) began airing, iQiyi announced that it had paid as much as 200 million yuan for the exclusive 2014 streaming rights to five variety shows, including Where Are We Going, Dad?, Kangxi Coming (《康熙来了》) and Happy Camp (《快乐大本营》). Soon afterward, Yinlu paid a steep 66 million yuan for the exclusive online title sponsorship of Season 2 of Where Are We Going, Dad?, and Blue Moon grabbed the co-sponsorship for 30 million yuan.

Leave aside for now whether Mango TV can succeed. If Hunan Satellite TV does not want to be reduced to a content supplier for video sites, it has to build its own channel. Platforms like Youku and iQiyi attract not only traffic but also the most important thing in this industry: talent.

Television is a traditional medium bound by a 24-hour broadcast schedule. Prime time is limited, and dead hours (3 p.m., say) are worthless to both target viewers and advertisers. Video sites are not bound by that rule, so they can produce far more flexibly. All they lack is experience. Their advantages are many: capital, distribution, audience data and much more flexible marketing. All of this will draw talent that once belonged to television, along with plenty of new blood.

Here is what we observed in television and the variety and entertainment business over the past year:

1. How audiences reach variety shows has changed

As the internet has worked its way deeper into viewers' lives, watching variety shows has gone from sitting by the TV at a fixed hour to something far more flexible.

Satellite channels now fight so hard for variety ratings that almost every weekday has a show to watch. But at 9 or 10 p.m. many young people are still on their way home, and satellite scheduling no longer fits the rhythm of their lives. So when "mom and dad" finish watching live TV and go to bed, more viewers are switching on all sorts of "boxes," "super TVs," video sites and apps, and starting their own leisure hours.

Most satellite variety shows are not streamed live on video sites, but they generally go up online by midnight the same night. For young people who live by the motto "real life begins after midnight," the timing seems just right.

So many ways to watch also mean viewers no longer have to choose so "carefully." In "prime time" slots such as Friday and Saturday night, almost every channel, from CCTV to the regional satellite channels, puts its most competitive variety show in the same time slot. Viewers can of course pick only one, so "ratings" remain the ground every channel fights over.

Which premiere viewers choose does reflect their tastes to some degree. But away from the TV, anywhere at all, they open a video app and watch many other shows. That is why online views are becoming an important measure of a show's popularity.

The sharpest video sites tend to win first. Tencent Video took the exclusive streaming rights to Season 3 of The Voice of China (《中国好声音》), and iQiyi signed exclusive deals for Where Are We Going, Dad?, Happy Camp and Day Day Up (《天天向上》). Hit shows plus exclusivity mean viewers who want a particular show must download a particular video app. As views and influence soar, advertising sponsors flood in.

Beyond the freedom of timing, young viewers prefer video sites because they strongly want to interact. Cut off from family conversation, or often alone, they love finding company, and the fun of mocking a show, in the scrolling "danmu" comments. What to watch depends on each person's own standards, such as a favorite star or genre, but they are inevitably swayed by opinion on social networks. The more a show is discussed on Weibo, the further its influence spreads. In fact most popular variety shows have their own new-media teams, constantly creating topics on Weibo and WeChat to draw attention. Successful shows such as Running Man (《奔跑吧兄弟》) and Where Are We Going, Dad? have indeed done just as well in online interaction. Each feeds the other.

2. The traditional business model has changed

With more capital flowing through video sites over the past year, quite a few TV stations have been building their own new media "by a roundabout route." Dragon TV gave exclusive rights to some of its variety shows to Funshion, which is backed by SMG's BesTV. PPTV, backed by Suning, used Suning's close ties with Jiangsu Satellite TV to win exclusive rights to several of that channel's variety shows.

But Hunan Satellite TV's model, streaming exclusively on its own platform, will not become the dominant trend, at least not next year. Zhejiang Satellite TV's The Voice of China Season 4 will again stream exclusively on Tencent, Jiangsu Satellite TV has sold Super Brain (《最强大脑》) Season 2 exclusively to Youku, and the nearly 200 other variety shows said to be debuting in 2015 will all be available on mainstream video sites such as Tencent, Youku Tudou, iQiyi, Sohu and LeTV.

This will continue because what video sites can do for a variety show is impossible for television, in its current form and at its current scale.

Tencent Video, the exclusive online platform for The Voice of China Season 3, ran a dedicated Voice section on the Tencent homepage and in its video app for the show's entire run of more than three months. It also launched several companion programs, such as Voice Insider (《有料好声音》) and Voice Spoilers (《剧透好声音》), keeping a once-a-week reality show fresh every day. On the social side, Tencent's own QQ Zone and Moments are natural hubs for word of mouth, and a partnership with Sina Weibo pushed the #TheVoiceOfChina# hashtag past 3 billion reads. On top of that, the danmu comments, the WeChat "shake" prize games, and an online "turn-around" that let eliminated contestants return to the stage all put into practice the newly fashionable idea of "TV-web synergy."

The same goes for LeTV, which bought the exclusive rights to Dragon TV's Voice of the Chinese Dream (《中国梦之声》). The celebrity interview show Big Names (《大牌》), the contestant interview show Speak for Your Dream (《为梦想发声》), the gossip show Variety Scoop (《综艺最有料》) and Dreamers (《做梦者》), which reveals how the competition works, are all spin-offs LeTV launched for Voice of the Chinese Dream. A satellite channel would be very unlikely to make four companion shows for a single variety show.

A show's influence is no longer judged by ratings alone. It is now judged on ratings, online views, Weibo topic engagement and other data taken together.

3. Production is still concentrated in the satellite channels, and their shows earned large advertising revenue

The charts below show that most of the audience's attention still goes to professional productions from TV stations.

Baidu searches show a similar ranking:

The title sponsorship price for The Voice of China rose from 60 million yuan to 200 million, then to 250 million, and the sponsor was always Jiaduobao.

Yili is another example. For Season 2 of Where Are We Going, Dad?, Yili paid a title sponsorship fee of 310 million yuan, breaking the 250-million-yuan record for TV title sponsorship set by The Voice of China Season 3. Yili soon broke its own record: in 2014 it put 500 million yuan into the title sponsorship for Season 3 of Where Are We Going, Dad?.

After Where Are We Going, Dad? Season 2 and The Voice of China Season 3 came If You Are the One (《非诚勿扰》), for which the cosmetics brand Hanshu paid 240 million yuan. Fourth and fifth were Season 2 of I Am a Singer (《我是歌手》), sponsored by Liby laundry detergent for 235 million yuan, and Happy Camp, sponsored by vivo smartphones for 193 million yuan.

4. But exclusive deals also let video sites reap the rewards

On iQiyi, Season 2 of Where Are We Going, Dad? drew nearly 2 billion views. iQiyi paid 200 million yuan for a package of 2014 exclusive streaming rights to five hit Hunan Satellite TV variety shows, including Season 2 of Where Are We Going, Dad?, Happy Camp and Day Day Up. Where Are We Going, Dad? alone brought in 66 million yuan in exclusive online title sponsorship from Yinlu and 30 million yuan in online co-sponsorship from Blue Moon laundry detergent. Add ad spending from more than 20 consumer goods and mother-and-baby advertisers, including Safeguard, Infiniti, Mengniu and L'Oreal, and that one show recovered well over half of the licensing cost.

Or take Tencent Video, which paid 250 million yuan for the exclusive online rights to The Voice of China Season 3. Within 24 hours of the TV premiere, online views passed 120 million. After the finale on October 7, Season 3 had drawn nearly 4 billion views on Tencent Video and nearly 2 million comments. The online title sponsorship for Season 3 on Tencent Video went to Ambrosial (Anmuxi), Yili's new yogurt brand. By one estimate, that sponsorship alone was worth at least 100 million yuan, not counting other pre-roll ads.

5. Video sites are making more of their own shows and will gradually build up greater production capacity

When Tencent spent 250 million yuan on the exclusive online rights to The Voice of China, quite a few people said it would do better to make its own show than to spend so much on streaming rights. Producers rarely disclose their budgets, but by industry estimates a fourth-quarter "phenomenon" like Running Man cost around 150 million yuan, so 250 million yuan was indeed enough to make one or two large-scale variety shows.

Yet the top self-produced variety shows on video sites, such as Hi Song (《Hi 歌》) and Qipa Shuo (《奇葩说》), probably cost around 100 million yuan each, and their influence and commercial value still lag far behind the hits on top-tier satellite channels.

Hi Song, produced by Tencent Video, set the advertising record for an internet show, yet its total ad sponsorship came to only about 60 million yuan, nothing like the several hundred million that top-tier satellite channels routinely command. By the end of its run it had nearly 400 million views. Against the 4 billion for Season 3 of The Voice of China, also on Tencent Video, its reach always fell short.

6. Competition has intensified, and washed-up stars are popular again

Judging by the quarterly ratings rankings, long-running shows such as If You Are the One, Happy Camp and Day Day Up have always held a place in the top ten, while seasonal shows such as I Am a Singer, The Voice of China and Running Man hold a clear ratings advantage that matches their reputation.

The fiercest competition was clearly in the fourth quarter, when variety shows fell into a free-for-all. Not one of the top ten had ratings below 1%.

Overall, the competition is still concentrated among the four leading satellite channels: Hunan, Zhejiang, Jiangsu and Dragon TV. Zhejiang Satellite TV is rising fast on the strength of The Voice of China and Running Man. Hunan Satellite TV has many shows on the charts but none that topped the ratings, while Jiangsu and Dragon TV cannot match Hunan and Zhejiang in either the number or the strength of their shows.

Without I Am a Singer, who knows how many more years G.E.M. (Deng Ziqi) would have needed to reach her present status? In 2014 she gave more than 30 concerts on her tour alone. Impersonator Show (《百变大咖秀》) made Jia Ling a front-rank comedienne. Zheng Kai's rise to fame on "one fart" could probably only have happened on Running Man. Even a baffling show like Stars Come to My Home (《明星到我家》) can put Cecilia Cheung back in the spotlight.

7. Is there anything that can't be turned into entertainment?

Grade One (《一年级》) may make viewers realize that now variety entertainment has reached into education, nothing is off limits.

Tired of watching stars dress up, we began to enjoy shows that make them look foolish. We watch them eat, drink, go to the toilet and sleep; we watch them dive, race cars, run and play billiards. When there seemed to be nothing left to watch, we started watching ordinary people sing and dance, and even watching their lives around the clock (for example A Million Fans (《百万粉丝》), and Tencent's The 15 of Us (《我们 15 个》) next year).

This seems a little frightening. It also seems to suggest that our own lives are rather dull.

In 2015 variety shows will cover still more ground. Hunan Satellite TV will launch Zoo Adventures (《动物园奇遇记》), a reality show pairing stars with animals, and Real Men (《真正的男子汉》), in which celebrities try military life. CCTV will air I Am SWAT (《我是特警》), and there will be a celebrity Chinese-opera reality show, Ding Ge Long Dong Qiang (《叮咯咙咚呛》), among others. Between them they touch every trade and every corner of people's lives.

8. How has SARFT, the satellite channels' protector, tilted its policies?

Starting next year, SARFT's "one drama, two channels" policy takes effect. It includes a rule that prime-time TV dramas may air only two episodes a night, and that non-prime-time variety shows may air only after 10 p.m. The 40 minutes in between, from 9:20 to 10:00 p.m., become a slot that "small but beautiful" variety shows will fight over.

Hunan Satellite TV has planned for this slot most clearly. It has designed and produced several new shows of its own: The Beauty of Chinese Civilization (《中华文明之美》); Let's Eat Together (《一起吃饭吧》), in which Wang Han cooks for guests and talks about health and food; Mom's Flavor (《妈妈的味道》); Pit-a-Pat Conscience (《扑通扑通的良心》), a social-experiment show that cheers on good deeds; and Health Comes Knocking (《健康来敲门》), a show of heartfelt stories about women's health. Other satellite channels can be expected to follow.

Going by the plans the channels have announced, about 200 variety shows will launch next year. The number is padded to attract more advertisers, but the real total should be no lower than this year's. Gao Changli, director of the Publicity Department of the State Administration of Press, Publication, Radio, Film and Television, came out to "dispel rumors," saying the "entertainment restriction order" will stay in force next year and only about 40 general entertainment shows will air. But the satellite channels always find a way.

9. Everyone knows IP matters, but how do you actually use it?

IP is another term now coming into fashion. It stands for intellectual property. Turning the original formats of shows like The Voice of China, I Am a Singer and Running Man into "manuals" that are sold again and again is one way to make money from IP. Another is to spin off from these shows and sell merchandise. But merchandise in the form of toy figures and key rings is rather passé. Mobile games and feature films are the IP products variety shows love most.

I Am a Singer did in fact "attempt" a mobile game. Hunan Satellite TV licensed the mobile game rights to Liby Group, which announced with great fanfare that it would "invest 50 million yuan for Shenzhen Bozhong Technology Co., Ltd. to develop, operate and promote the game." In the end, after a few character designs were released, nothing more was heard of it.

That is a cautionary example, and it shows the setbacks variety shows keep running into on their first attempts at mobile games. There are successes, of course. Jiangsu Satellite TV's Super Brain launched a puzzle app of the same name that combines spot-the-difference, mental arithmetic, stroke counting and popular science. The game types come straight from the skills the show's "super brains" display, so viewers can take on the contestants in a competitive spirit.

Where Are We Going, Dad? The Movie (《爸爸去哪儿大电影》), released in this year's Spring Festival slot, earned nearly 700 million yuan at the box office from a four-day shoot, nothing short of a miracle. So next Spring Festival the sequel will arrive on schedule. The first season's dads also want to keep cashing in on the show's popularity: Dad's Holiday (《爸爸的假期》), directed by Wang Yuelun, will go up against the second season's dads for box office in the same slot.

A Running Man movie is already being shot while the show is still airing on Zhejiang Satellite TV. Making money on the small screen and then moving on to the big screen may become standard practice for celebrity reality shows.

Meanwhile, after the huge success of The Voice of China, its producer Canxing went on to export shows such as Sing My Song (《中国好歌曲》) and Dance China (《中国好舞蹈》). Blue Fire, which made its name with Goddess's New Clothes (《女神的新衣》), has since had new shows such as Brave Hearts (《勇敢的心》) and Dream Makers (《造梦者》) picked up by TV stations. And Hunan Satellite TV is already selling the format rights to Grade One abroad.

10. The competition is far from over, and Tencent, iQiyi and Youku will invest more

Self-produced variety shows on video sites will not come close to TV variety in influence any time soon, but the battle has already begun in earnest. Tencent Video's Hi Song drew more than 60 million yuan in ad sponsorship. iQiyi's Qipa Shuo sold its title sponsorship to Metersbonwe for 50 million yuan, and as its views and reputation kept rising, it added more sponsors during its run, including Bright Dairy's Mosilian yogurt, Jeep Cherokee, Pepsi, Chacha sunflower seeds and Volkswagen. Advertisers clearly see promise in video sites and are starting to spread their spending more widely.

Next year Tencent Video will follow up with Season 2 of Hi Song, along with Sexy Beasts (《性感野兽》), a dating reality show with special-effects makeup, and The 15 of Us, a life-experiment show somewhat like The Truman Show that will run for a full year.

After Qipa Shuo, iQiyi will launch more than ten custom-made variety shows in 2015, including Love the Supermodel (《爱上超模》), Love at First Sight (《一见钟情》), Dad's Brave Love (《老爸勇敢爱》), Celebrity Sports Day (《明星运动会》), Love Confession (《爱的表白》) and King of Pop (《流行之王》).

Youku will produce a Chinese version of Big Brother (《老大哥》) and The Voice of China Kids Edition (《中国好声音少年版》). Tudou will focus on music, saying it will launch several shows that link online and offline, including Tudou Most Music (《土豆最音乐》), Tudou Most LIVE (《土豆最 LIVE》), Tudou America's Got Talent (《土豆全美达人》) and The Show Korean Chart (《The Show 韩秀榜》).

Finally, here are the variety show rankings for the past year: