Tencent Holdings said it will reposition its Weishi app to focus on film and TV content, as the short-video platform struggles to win users in an increasingly saturated domestic market dominated by Douyin and Kuaishou.
Weishi will pivot away from sharing user videos and instead offer TV and movie clips, help distribute Tencent's licensed content, and build a system to redistribute works by other creators, Vice President Sun Zhonghuai said during a Monday news conference in Shanghai.
The announcement comes after the Hong Kong-listed company integrated Weishi and several other platform and content offerings into a new online video business unit headed by Sun, in an effort to enhance profitability and quality.
Sun lambasted China's short-video culture at an industry forum last week, calling the clips "increasingly low-intellect and vulgar" and comparing them to "pig feed." People who watch the videos are "like idiots," he said, adding that the way such apps use algorithms to recommend similar clips was similar to "brainwashing" and was coming under pressure from industry regulators and auditors.
Tencent's internal shake-up is taking place as investors grow increasingly jittery over potential government clampdowns in China's technology sector. Tencent, which also operates the messaging app WeChat, has seen its share price drop more than 20% since hitting a record high in February.
Weishi has struggled to carve out a space in China's huge short-video market amid pressure from ByteDance's Douyin -- known as TikTok outside the country -- and Kuaishou Technology's app.
According to Chinese research company Quest Mobile, Weishi had fewer than 100 million monthly active users (MAUs) at the end of the first quarter. By comparison, industry leader Douyin said last year it had around 600 million MAUs, and Kuaishou 520 million, according to its most recent earnings report.
Speaking at an event to mark the 10th anniversary of Tencent Video, Sun said the formation of the company's online video unit was based on management considerations around resource allocation and changes in user behavior.
"In the last two years, it's been difficult to please users with all the long videos or all the short videos in a single app," he said, adding that users increasingly expect to be able to see their favorite content on one platform.
"In terms of TV and film, they not only want to watch features but also want extra content derived from those series, and discuss and communicate with other fans," Sun said.
Tencent set up the unit in December, Sun said. In addition to Weishi, it includes streaming service Tencent Video and its overseas twin WeTV, mobile app hosting service Yingyongbao, and Tencent Sports.
Sun is the unit's CEO with Lin Songtao as chairman. Both report to Ren Yuxin, Tencent's chief operating officer and the chief of its platform and content group, as well as its interactive entertainment group.
Since April, Tencent and other Chinese streaming giants like Youku Tudou and iQiyi have committed to tackling piracy on the country's short-video platforms, which have come under fire for hosting users that illegally clip or broadcast copyrighted material.
Online platforms that host longer videos typically struggle to guarantee long-term returns on investment and high-quality content. Tencent Video lost around 3 billion yuan ($470 million) in 2019, according to company financial reports. Rival iQiyi lost 10.3 billion yuan that year.
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