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The value of long videos is undeniable, but it is not destined to be smooth
Written by Zou Shan
Editor/Lee Ha-lin
The price increase of long videos has become the focus of the industry in the past week.
After iQiyi's second round of price increases, Mango TV also announced an increase in the price of PC mobile film and television members. Different from the price increase of other platforms, Mango TV has added a number of member rights, including exclusive offers for Xiaomang e-commerce, MCITY vouchers, program recording priority visiting opportunities, etc., trying to increase the stickiness of members through multi-faceted services in addition to content.
Tens of billions of dollars are spent every year, more and more boutique productions are being produced, and membership prices have hardly increased with the quality of content. China's long-form video platforms face several times higher content input costs on the one hand, but on the other hand, they have long been trapped in difficult to change member prices, and they also have to deal with the challenge of new short videos cannibalizing user time.
In addition to Mango TV, which does not participate in the "burning money war" by relying on self-control, Aiyouteng has not yet reached the balance point of profitability.
It's always easier to criticize than to build. In the past ten years, the contribution of long video platforms to the content industry has been obvious to all, from super network roundups to super network dramas, from high-profile dramas such as "The Hidden Corner" and "The Silent Truth" launched by iQiyi, to high-quality variety shows such as "Brother With Thorns" and "Goodbye Lover" of Mango TV this year, long video platforms have long been innovating China's online content industry.
From pioneering advertising + membership, "free + pay" business model, to the long-term idea of adding self-made content, although difficult, long video platforms have been groping.
People still need long content. As of the third quarter of this year, iQIYI's total paid members were 103.6 million, and Tencent Video's paid members were 129 million. Mango TV's semi-annual report also showed that membership revenue rose by more than 23%.
Although long videos have chosen a more difficult path to challenge, in the long run, they may gain more barriers to long-term value. Tough but always moving forward, this is the path that long videos are destined to go.
Face the short video head-on
According to the "China Mobile Internet Autumn Report" released by QuestMobile, in September 2021, the overall monthly active user scale of short video APP reached 925 million, exceeding the 903 million online video APP. In addition, the average daily use of short videos has reached 125 minutes in 2021, exceeding the 98 minutes of online video.
Previously, short video platforms have been criticized for their vulgar content, high homogenization and algorithms. When the competition between long and short is becoming more and more intense, long videos are also constantly attacking.
Deep cultivation of long content is the foundation. In the list of 2022 dramas in Aiyou Tengmang, the reserves of multi-track variety shows and multi-genre dramas are still sufficient, iQiyi will produce a number of realist dramas such as "Heart Residence" and "Human World", Tencent Video continues to work on the sequels of the high-reputation IP "Qing Yu Nian" and "Ode to Joy" series; Mango TV's emotions, mysteries and other tracks also have a large number of works that have achieved long-term reputation to be broadcast.
Copyright is a big deal.
On December 15, the China Online Audiovisual Program Service Association issued the Detailed Rules for The Standards for the Review of Online Short Video Content (2021). The "Detailed Rules" stipulate: Short video programs, etc. must not cut or adapt all kinds of audio-visual programs and clips such as movies, TV series, and online film and television dramas without authorization. Just recently, Tencent Video filed a complaint demanding that Douyin pay 800 million yuan as compensation for the infringement of "Douluo Continent".
In addition, long videos are also further improving the industrial chain of self-made content. For example, Mango TV launched the "DaMang Plan 2.0", which has been continuously explored in short dramas and micro-variety shows, and has produced explosive works with more than 200 million hits on platforms such as "The Queen of Attack".
Still on par with Netflix
"When people want to watch a full episode or movie, the first thing that comes to mind is the long video platform, not TikTok Kuaishou. Therefore, users do not need a long video platform, but a better long video platform. An industry insider said.
Netflix's performance has fully demonstrated that the content value carried by long videos is still strong and difficult to replace. Benefiting from Squid Games, in Q3 2021, Netflix's new global paid subscribers reached 4.38 million, double the figure of 2.2 million in the same period last year.
The inability to continue to produce explosive models under high costs is the dilemma of Aiyouteng.
According to the financial report, in 2019, iQIYI's three major revenue sources of content distribution, online advertising and membership services totaled 25.25 billion yuan, and the content cost of that year was 22.25 billion yuan; in 2020, the total revenue of the three major revenues was 25.97 billion yuan, and the content cost of the year was 20.89 billion yuan; by 2021, iQIYI's revenue was 7.6 billion yuan, and the content cost expenditure was as high as 5.3 billion yuan.
Tencent's financial report also shows that in 2020, Tencent's content cost is 58.2 billion yuan, and Tencent Video accounts for a relatively large proportion. Last year, Sun Zhonghuai, vice president of Tencent and CEO of Penguin Films, also revealed that the content cost invested by Tencent Video in the past three years has exceeded 50 billion yuan, and it will still invest more than 100 billion yuan in the next three years.
In order to find a new way out, for a long time last year, the news about the merger of iQiyi and Tencent Video was once very loud, and since August 2020, the news about iQIYI's secondary listing in Hong Kong stocks has also been frequently reported. Some media even speculated that iQiyi's recent large layoffs were also in exchange for the success of the second listing.
The special case is Mango TV. This year, Mango TV not only contributed to the high-heat and strong circle-breaking programs such as "Brother Who Cut through thorns" in the S-level project, but also the emotional "Goodbye Lover" and the "I'm Good in Other Places" launched by Monsoon Theatre, which also made it a rare platform in the market to continue to make explosive models. Mango TV is also the only long-form video company in the industry that has remained profitable since its listing.
Under the Hunan radio and television system, Mango TV did not participate in the "burning money war". In the early days, the exclusive copyright of high-quality content was obtained stably at a controllable cost, and then the self-made business was vigorously developed, and the three tracks of long video, short video and content e-commerce were built as the core business force points of the new media platform matrix, and the industrial chain layout and operation management model were improved.
QuestMobile's data shows that in July and August this year, due to the broadcast of blockbuster variety shows and blockbuster dramas, Mango TV's monthly active activities stabilized in the top three in the industry. The financial report shows that Mango TV achieved a net profit of 1.980 billion yuan in the first three quarters of this year, exceeding the level of the whole year of 2020.
A number of securities companies have issued research reports to maintain the "buy" rating of Mango Super Media. In the capital market, Mango Super Media has been called "media Mao", and its stock price has been good for a long time. On the day Mango TV announced the membership price increase, Mango Super Media's stock price rose 8%.
Therefore, users are not unwilling to pay for good content, but the content of most domestic long video platforms has been trapped by high costs and vicious competition, which was once difficult to sustain. In fact, as long as there is high-quality content, users are still willing to pay for the Chinese version of "Netflix".
Slightly more expensive, a little better
In fact, referring to the path of foreign head streaming media, China's long videos still have opportunities.
Netflix Premium membership is $17.99 per month, Hulu is $5.99 per month, and Disney+ is $8 per month, which is not in the same order of magnitude as IYotengman.
Looking back at Netflix's previous four price increases, the increases were 12.5%, 11.1%, 10% (basic package) / 16.7% (standard package) and 12.5% (basic package) / 18.2% (standard package) / 14.3% (premium package). Industry insiders concluded that the law after Netflix's price increase is: short-term fluctuations do not change the long-term growth trend.
Gong Yu also said, "The price increase of long video members is an inevitable trend. ”
China's Aiyouteng also needs more premium content to boost consumer confidence – positive examples are that Tencent Video's paid memberships in the third quarter increased by 8% year-on-year, boosted by episodes such as "Sweeping The Black Storm" and "You Are My Glory"; the negative effect is that iQiyi lost 3.1 million paid users in one quarter after first proposing price increases in 2020.
Players are also looking for better, healthier ways to create content.
iQIYI's latest achievement of "one fish to eat more" is the "Huaxia Ancient City Universe" represented by "Wind Rises Luoyang"; Mango TV has gradually shifted from the original differentiated operation to providing all-category content. In the 2022 film list, the longboard is strengthened, and the variety shows go hand in hand; to make up for the shortcomings, the series has made multi-genre attempts such as urban and historical.
In addition, the service becomes an increment. In this membership price increase, Mango TV has increased a variety of member rights and interests such as e-commerce shopping, offline interaction, identity privileges, and movie-watching privileges to increase membership stickiness.
After the phenomenon of hot money withdrawal in the film and television industry and strict policy control of high film remuneration, whether it is competition to supplement ammunition or form its own small ecology, the content innovation ability on top of the healthy cost model has become the core competitiveness of long-term video players at this stage.
At the end of the day, the value of long videos as the "crown" of content is undeniable, but it's not meant to be a smooth road. How to continuously attract and retain users through content, so as to open up the path of normal increase in membership subscription fees, is the key to determining the outcome of future events.
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