MEDIA: Mobile Data, Box Office Boom In Lunar New Year
Bottom line: Mobile data usage will grow by triple-digit amounts this year as telcos boost 4G promotions, while box office growth will start to slow and the ongoing decline in traditional SMS text messaging will accelerate.
The usual rush of Lunar New Year-related data is coming in, painting a mixed picture for traditional and new media. The clear winner in the mix is new media, whose surging popularity helped to fuel a 70 percent jump in mobile data traffic over the holiday period. Traditional movies also performed well, with China’s box office rising 36 percent during the period. It will also come as no surprise that the big loser over the holiday was traditional SMS text messages, whose volume plunged by 25 percent.
Just yesterday I wrote about the huge surge in popularity for virtual red envelopes or hongbao, which were being distributed in huge numbers this year over mobile services operated Tencent’s (HKEx: 700) WeChat and Alibaba’s (NYSE: BABA) Alipay. (previous post) The numbers released by private companies like Alibaba and Tencent are always just slightly suspicious, since such firms often exaggerate to make the numbers look as big and impressive as possible.
But the Ministry of Industry and Information Technology (MIIT) is a bit more neutral in its data, since it’s not really trying to impress anyone but instead wants to highlight the latest industry trends. The telecoms regulator reported that mobile data use surged by 69.5 percent to 7.26 gigabytes on the day before the Lunar New Year, when many people spent hours on their mobile phones engaged in various hongbao “grabbing” promotions. (Chinese article)
At the same time, the MIIT announced the volume of traditional SMS text messages sent on that day dropped 25 percent to about 8.3 billion. Over the 7 day Lunar New Year period mobile users sent around 20 billion traditional text messages, though no comparative figure was given for last year. The report also adds that the average mobile subscriber increased his data usage by more than 50 percent over the 7 day period, consuming 54.8 megabytes of data per day.
These numbers are interesting but not really that surprising, as both trends have been happening for quite some time. Data for the first 9 months of the year from China Mobile (HKEx: 941; NYSE: CHL), the nation’s leading telco, shows that the company’s traditional SMS text messaging volume fell by 20 percent during that period. At the same time, its mobile data traffic nearly doubled.
Against that backdrop, the Lunar New Year data appears to show the SMS decline is accelerating, while the rise in mobile data use is also showing signs of slowing. Of course the big new element in the equation is a surge in 4G services that began towards the end of last year, which will probably rekindle rapid growth in data use and drive it back into the triple-digit percentage range this year.
We’ll close out this Lunar New Year data round-up with figures from the traditional movie industry, which posted a 36 percent jump in box office revenue to 1.73 billion yuan ($280 million) over the 7 day holiday period. (Chinese article) While that figure may sound strong, it’s actually identical to China’s overall box office growth rate for all of 2014, when the figure rose to $4.7 billion yuan.
One report on the latest data points out that at least some analysts were slightly worried about the latest holiday box office growth because it represented a sharp slowdown from last year. Over the 2014 holiday period, China’s box office actually soared by a massive 85 percent from a year earlier, though it wasn’t really clear why it posted such a big gain. From my perspective this year’s 36 percent growth rate looks quite respectable, though I do expect the overall market will show signs of losing some momentum this year as China’s economy slows and the film market also starts to mature.
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