ByteDance's Entertainment Apps Expand Aggressively, AI Video Generation Shows Strong Growth

Overview

Nomura released its April 2026 China Internet & New Media App Tracker report. The report shows stable overall user scale and continued growth in total time spent. The core trend is ByteDance systematically capturing user time in multiple entertainment verticals like online video, music, and reading through its traffic ecosystem and low monetization strategy, significantly increasing its market share. Meanwhile, text-to-video AI apps gained strong global traction, but the online travel sector saw YoY engagement weakening due to domestic aviation fuel surcharge increases.

Core views

Overall market: China's smartphone MAUs (MAS) grew 1.5% YoY to 1.28 billion in April, while total monthly time spent (MTS) increased 10.3% YoY, maintaining March's growth rate. Top50 apps accounted for ~93% of total mobile time, with ByteDance's share rising from 32.3% to 38.3% YoY, surpassing Tencent's 30.8% for the first time. Entertainment: ByteDance performed strongly. In online video, long-form platforms generally saw 10-20% YoY MTS erosion, while ByteDance's free short drama platform Hongguo grew 145% YoY. In music streaming, ByteDance's Qishui and Tomato Music grew 131% and 77% in MTS respectively, while Tencent Music's three flagship apps saw 9%-14% declines. Qishui Music's DAU reached 57 million, surpassing QQ Music as #1. In online reading, ByteDance's Tomato Free Novel grew 15% in MTS, while China Literature's Qidian and QQ Reading declined 21% and 17%. AI & new businesses: Text-to-video apps Kling (Kuaishou) and Jimeng (ByteDance) saw revenue grow 10% and 12% QoQ, with Kling driven overseas and Jimeng domestically. Kling's May second-week revenue surged 3.6x YoY due to viral Korean baseball effects, but the report warns such trends may be temporary. ByteDance's new standalone group-buying app Douyin Shengsheng doubled MTS MoM with DAU up 115%, reaching 16% of Dianping's MTS. Other verticals: Online travel engagement weakened YoY, with Ctrip, Qunar, and Fliggy seeing DAU declines attributed to April's domestic fuel surcharge hike. In e-commerce, Pinduoduo, Taobao, and JD.com all saw DAU growth (Pinduoduo +10%, Taobao +6%). In O2O, Meituan and Dianping's MTS fell 3% and 1% YoY mainly due to reduced daily time spent.

Analysis framework

The report uses monthly app data tracking, with core metrics including MAU/MAS, DAU, MTS, and daily time spent per user (DTSD). By comparing time share changes among different camps (e.g., ByteDance vs. Tencent) in Top50 apps, it analyzes structural shifts in traffic patterns. Combining data from leading apps across verticals, it breaks down growth drivers between user expansion and time penetration, linking macro factors (e.g., fuel surcharges) to explain fluctuations.

Methodology notes

• Industry Analysis FrameworkIndustry Concentration Analysis

  Industry Concentration Analysis

  Measuring market concentration and competitive landscape changes among leading internet camps (e.g., ByteDance, Tencent) by tracking Top50 apps' share of total mobile time.

• Competition & Strategy FrameworkMoat / competitive advantage

  Moat/Competitive Advantage

  Analyzing how ByteDance leverages Douyin's traffic ecosystem and ad-based low monetization strategy to build competitive advantages and capture user time across multiple entertainment verticals.

• Company Fundamentals & Financial FrameworkEarnings Quality Analysis

  Earnings Quality Analysis

  Assessing the sustainability and quality of AI video apps' growth by breaking down revenue sources (e.g., overseas vs. domestic, mobile vs. web).

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• ByteDance (unlisted)

  Beneficiary

  Strengths

  Strong traffic ecosystem, low monetization strategy capturing share across video/music/reading, strong AI video and new group-buying growth

  Comparison

  Surpassed Tencent in entertainment time share

  Risks

  New business monetization unproven, AI viral trends may be temporary

• Tencent (700 HK)

  Structurally Differentiated

  Strengths

  WeChat's 19.3% time share remains #1, enterprise app WeCom grew

  Weaknesses

  Long-form video, music streaming, social (QQ) time declined YoY

  Comparison

  Entertainment time share surpassed by ByteDance

  Risks

  Core entertainment user time erosion

• Kuaishou (1024 HK)

  Structurally Differentiated

  Strengths

  Kling AI video app revenue grew strongly, especially overseas

  Weaknesses

  Kuaishou main app MTS fell 12% YoY

  Comparison

  AI tools outperforming main app

  Risks

  AI viral trend sustainability unknown

• Meituan (3690 HK)

  Under Pressure

  Strengths

  Dianping DAU grew 18% YoY

  Weaknesses

  Meituan and Dianping MTS fell YoY due to reduced daily time

  Comparison

  Facing competition from ByteDance's Douyin Shengsheng

  Risks

  Continued user time decline

• Trip.com (TCOM US)

  Under Pressure

  Weaknesses

  Ctrip and Qunar DAU fell YoY due to fuel surcharges

  Comparison

  Sector-wide weakening

  Risks

  Continued fuel surcharge impact on engagement

• Tencent Music (TME US)

  Under Pressure

  Weaknesses

  Three flagship apps' MTS fell 9%-14%

  Comparison

  Surpassed by ByteDance music apps

  Risks

  Market share loss

• China Literature (772 HK)

  Under Pressure

  Weaknesses

  Qidian and QQ Reading MTS fell 17%-21%

  Comparison

  Squeezed by free models

  Risks

  Paid reading user attrition

• Pinduoduo (PDD US)

  Beneficiary

  Strengths

  DAU grew 10% YoY, casual users up 35%

  Comparison

  Maintained growth alongside Taobao and JD.com

• Baidu (BIDU US)

  Under Pressure

  Strengths

  YY Live DAU slightly grew

  Weaknesses

  Baidu App MTS fell 18%, Baidu Maps time down 11%

  Comparison

  Search and maps businesses under pressure

  Risks

  Core business engagement decline

Key data

• Smartphone MAUs (MAS)1.28 billion1.5% YoY growth
• Total Monthly Time Spent (MTS)—10.3% YoY growth
• ByteDance's Top50 App Time Share38.3%April 2026, 32.3% YoY
• Tencent's Top50 App Time Share30.8%April 2026
• Kling Revenue Growth10%QoQ growth, 3.6x YoY in May second week
• Jimeng Revenue Growth12%QoQ growth
• Hongguo Free Short Drama MTS Growth145%YoY growth
• Qishui Music DAU57 million76% YoY growth, surpassing QQ Music
• Douyin Shengsheng MTS Ratio16%Reaching 16% of Dianping's level

Impact & implications

The report suggests ByteDance is systematically reshaping online entertainment, with its low monetization strategy pressuring subscription-based incumbents like Tencent Music and China Literature. While AI video apps show strong growth, revenue structures differ (overseas vs. domestic), and mobile trends may diverge from web, requiring sustainability monitoring. Online travel's weakening is expected to persist into May amid further fuel surcharge hikes. E-commerce maintains user growth resilience.

Risks

• AI video apps' viral trends (e.g., Kling's Korean baseball effect) may be temporary, with momentum sustainability unclear
• Text-to-video vertical competition is intense, making winner predictions premature
• AI video app revenue may mainly come from web or third-party API platforms, with mobile trends potentially differing
• Domestic aviation fuel surcharge hikes expected to continue impacting May online travel engagement

What to watch

• Sustainability of Kling's overseas viral growth momentum
• Whether May online travel engagement continues declining amid further fuel surcharge hikes
• Long-term market share erosion of Meituan/Dianping by ByteDance's Douyin Shengsheng