Industry Insights | Upholding Value First, Deepening Content Innovation, and the 2023 Variety Show Market Booming

Variety shows originated from news and music programs. They fully utilize electronic technology means and unique TV presentation techniques such as sound and light effects, free transformation of time and space, and unique visual shapes. They widely integrate art forms or non-art forms such as music, dance, drama performance, skits, quyi (a form of storytelling), acrobatics, games, competitions, quizzes, etc., into a whole and create a second creation of various literary and artistic forms. Therefore, variety shows can not only retain the artistic value of the original literary and artistic forms but also give full play to the special artistic functions of electronic creation to fully meet the diverse artistic aesthetics and leisure entertainment needs of the vast number of audiences, providing viewers with a TV program form that offers cultural entertainment aesthetic enjoyment.

Classification by Broadcasting ChannelsDue to the different types of premiere channels, TV channels, or online video platforms for variety shows, they can be specifically divided into TV variety shows and online variety shows;Classification by Theme ContentVariety shows can be divided into variety evenings, game entertainment, puzzle-solving, talent shows, outdoor reality shows, emotional love shows, talk shows, career experience programs, food shows, etc. Due to the improvement of residents' consumption levels and the richness of spiritual culture, viewers' content preferences are becoming more and more diverse, and the theme types of variety shows are also constantly expanding.

The main participants in China's variety show market include producers with different backgrounds and abilities, advertisers and their agencies, copyright owners, post-production companies, marketing and distribution companies, and broadcasting channels.

Upstream of the Industrial ChainIncluding copyright owners and investors, generally, their investment and licensing methods do not have a significant impact on midstream content production;Midstream of the Industrial ChainIs the core production link. Market participants include advertisers, independent video content producers, TV stations, online video platforms, post-production companies, marketing companies, and talent management companies. They can determine the creative cultivation and content quality of the final program;Downstream of the Industrial ChainIs the final distribution and broadcasting link of variety shows. Market participants mainly include online media platforms and TV stations.

Source: Frost & Sullivan analysis

China's variety show industry started in the early days of reform and opening up in the 1980s. With the significant improvement in people's material living quality, the spiritual and cultural needs of audiences have also been increasing day by day. After 40 years of development, China's variety shows have evolved from single TV variety shows to today's online variety shows that are booming and outputting content to satellite TV stations in reverse. The program themes have also developed from the initial performance talent shows to the current diverse and innovative creative models. The maturity of the industrial chain and policy regulations have continuously standardized and normalized the business model of the variety show industry, promoting variety production towards the trend of diversification and value orientation. At the same time, the variety derivative industry has also become an important way to maximize the realization of variety value. Popular variety derivative shows can also achieve high ratings, and several variety blockbusters have had box office revenues exceeding 1000 million yuan. Models such as "variety + artist agency", "variety + e-commerce", and "variety + game" have continuously created new revenue sources for the variety industry.

• 1980 - 2000: The start of national TV variety shows led the industry to germinate and break through

In 1983, the Spring Festival Gala, as the beginning of local variety shows, became the first phenomenon-level TV variety show that attracted thousands of people. In 1990, "Variety Grand View" and "Zhengda Variety" integrated the characteristics of various film and television forms, creating a precedent for national variety shows and variety show titles. At the same time, with the development of the market economy, public cultural life has become increasingly rich and diversified, and cultural entertainment consumption has been continuously rising. Variety shows produced by local TV stations have gradually come into public view. During this stage, Hunan Satellite TV launched variety shows such as "Happy Camp" and "Rose Appointment", which caused a national variety show craze on the basis of content innovation and created the "news + TV drama + variety" three-pillar model.

• 2000 - 2010: Introducing overseas copyrights ignited blockbusters, and TV variety shows set off a wave

Entering the 2000s, the rapid economic development and the rise of the younger generation expanded the audience base of variety shows, and variety shows further developed towards content diversification. On the basis of local originality, as a "soft" industry, producers began to introduce foreign variety shows and learn from their successful experiences. Some programs derived from foreign variety shows reshaped the pattern of the local variety show industry. For example, by drawing on "Super Boy" and "Super Girl" from American Idol, they initiated a variety trend involving the whole nation and became the founders of contemporary fan traffic culture. At the same time, online variety shows had not yet emerged and were still in the stage of low cost and small scale, failing to form a brand effect.

• 2010 - 2015: TV variety shows matured, and online variety shows witnessed a boom

Around 2010, the entertainmentization of overseas copyrights in China gradually matured. Dongfang Satellite TV was the first to buy copyrights from the UK and produced and broadcasted "China's Got Talent". Once the program was broadcast, it set a local variety show viewing record and received quite a lot of attention nationwide. During this stage, local TV stations followed the trend and introduced overseas copyrights in large numbers, launching a series of brilliant classic variety shows such as "Let's Date", "The Voice of China", "All in One", "Where Are We Going?" etc. 2014 also became the first year of online variety show self-production. Led by programs such as "Stranger Things", the number of variety shows increased sharply, and production also made a qualitative leap.

• 2016 - Present: The variety industry is stabilizing amidst fluctuations, and content quality continues to improve

After 2016, with the development of the Internet industry, which drove the rise of video platforms, online variety hits emerged frequently. With their high maturity and strong interactivity, they can even feed back into satellite TV content. During this stage, the variety industry has seen high-cost, well-produced, and diverse-themed programs such as "China Hip-hop" and " about Assembly". Against the backdrop of the development of mobile Internet, online media has given rise to online self-produced variety shows that "go viral". Although it has improved the profit efficiency of funders, it has also squeezed the market share of TV variety shows. The operation models of "traffic + topic" and "variety N-generation" have become the "wealth code" for the success of variety shows, but they also bring problems such as fast iteration speed, content homogenization, and low production quality, causing the industry development to cool down. During this stage, variety producers have begun to pay attention to content innovation, looking for new force points in experimental variety shows. In the future, variety programs will continue to deeply cultivate content creation, endow programs with a value core, and develop towards diversification, verticalization.

In recent years, the spiritual and cultural needs of Chinese residents have been continuously increasing, driving the development of the entertainment industry towards prosperity. From 2017 to 2019, the per capita annual consumption expenditure on entertainment by urban residents increased from 2,097.0 yuan to 2,429.0 yuan, with a compound annual growth rate of 7.6%. In 2020, affected by factors such as the global pandemic, the per capita annual consumption expenditure on entertainment by urban residents decreased slightly to 1,613.0 yuan. However, with the recovery of consumption and the continuous improvement of residents' disposable income levels, it is expected that by 2026, the per capita annual consumption expenditure on entertainment by urban residents will reach about 3,390.6 yuan, with a compound annual growth rate of 10.0%.

Source: Frost & Sullivan analysis

From 2017 to 2020, affected by the rise of online self-produced variety shows and Internet media, the advertising revenue of TV stations and the number of TV variety show broadcasts both declined slightly, and the variety show market size showed a downward trend during the same period. At the same time, due to the outbreak of the pandemic, a series of isolation policies led to delays in the shooting progress and distribution of variety shows, as well as reduced marketing budgets of sponsored brands, resulting in a further shrinkage of the variety show market size in 2020.

Source: Frost & Sullivan analysis

With the recovery of consumption and the warming of the entertainment market, China's variety show market size is expected to enter a mature development stage after 2022. In the future, the annual broadcast volume of TV variety shows will remain stable, and the annual broadcast volume of online variety shows is expected to show a slight increase. China's variety show market size will grow steadily in a moderate manner.

In recent years, the revenue of the variety market has shown a trend of diversification and multi-channel development. The further development of content operation centered on IPs, including the development of derivative products such as joint consumer goods, the organization of offline commercial activities, and cooperation with overseas streaming media platforms, will bring new growth potential to this market. Therefore, it is expected that China's variety show market size will remain stable, reaching about 633 billion yuan by 2026, with a compound annual growth rate of about 2.3% from 2021 to 2026. Among them, the TV variety show market size will increase to 407 billion yuan, and the online variety show market will increase to 226 billion yuan by 2026.

Source: Frost & Sullivan analysis

At the beginning of 2023, major provincial TV stations such as Hunan Satellite TV, Dongfang Satellite TV, and Beijing Satellite TV, as well as major online audio-visual platforms such as Youku, iQiyi, Mango TV, and Tencent Video, have successively released variety show schedules. In addition to long-standing variety themes such as music competitions, emotions, workplace observations, and comedy, major platforms are also competing to innovate, catering to the preferences of different circle users, exploring new content tracks, and discovering potential blockbuster opportunities. The variety market will grow vigorously towards diversification, value orientation, and multiple channels. Although the form and content of programs are constantly iterating into new models and logics, the quality of high-quality content remains an unchanging trend within the industry.

The Generation Z, mainly born after 1995, is becoming the main viewing audience for variety shows. Their Internet usage habits have promoted the rapid development of online variety shows, and their subculture and niche preferences also prompt variety content to continuously explore diversified vertical fields. The Generation Z growing up in the Internet era has relatively strict requirements for the content quality of programs. When watching variety shows, they not only consider the breadth and depth of the circle but also pay more attention to the trendy expression of content forms. On the one hand, this injects vitality into the development of programs, and on the other hand, it also drives society to deepen its understanding of some subcultures. In the future, the Generation Z will not only continue to provide a broad audience base for variety shows but also their life concepts and social ways will become the material sources for variety show content. The variety market will continue to innovate with the growth of the Generation Z, continuously exerting efforts on "new concepts" and "good content"

With the further penetration of online video platforms and the development platform period of traditional TV variety shows, variety has also broken out of the shackles of long video platforms and revived with lightweight short videos as carriers. Since short videos have put forward relatively high requirements for the content of variety shows in terms of attention-grabbing efficiency and entertainment - they need to capture the eye within a few seconds - short video platforms are not only the entrance for long video platforms but also the "testing ground" for variety, giving users a chance to screen and finally allowing high-quality content to be refined through the process of selection.

In the field of variety production, the guests invited can largely determine the final effect and program quality of variety shows. Therefore, a high-quality variety not only needs to attach importance to interactive links and mechanism design but more importantly, it needs to maximize the "value of people" in the viewing experience, showing sincere emotions and rich character images. With the trend that Generation Z becomes the mainstream audience, uniform imitation and replication, variety shows supported by traffic stars will not be able to meet the continuously improving content aesthetics of the audience. To achieve "breaking out of the circle", high-quality content, in-depth thinking, and sincere emotions are required to cater to the audience's value orientation and emotional needs. In the future, variety videos will develop in the direction of highlighting emotional value and social value, "healing" audiences with high-quality audio-visual content, allowing viewers to find an outlet for emotional release during their busy lives.