In the past 2021, due to the large-scale shortage of global content supply, the domestic head video websites are almost all deeply involved in various "internal and external troubles". Whether it is the suspected bundling of advanced on-demand sales being questioned by the Consumer Protection Commission, the subscription price of members ushering in a general increase, or the suspension of talent shows, the industry can be described as experiencing a rather "high-profile" year.
Looking back at 2021, the topic around the video website industry is obviously inseparable from the keywords of "price increase", "advanced on-demand", "member advertising", and "content". So before imagining what changes video sites will usher in in 2022, we will focus on these keywords to see what events the industry has experienced in 2021 that have attracted a lot of attention.
Price increases: Can the existing model solve the urgent needs of video websites?
In fact, video sites have repeatedly released the signal of "price increases" many years ago. At the financial analysis meeting in the third quarter of 2020, Tencent said, "We believe that the price of video subscriptions is actually low in China, and in some structures or certain scenarios, we hope to have the opportunity to adjust the price of video subscription services."
The first to land the price increase is iQiyi, which has twice adjusted the price of its paid subscriptions since November 2020. Taking the continuous monthly subscription as an example, its first increase was at the end of 2020, when the monthly fee of gold VIP members was raised from 15 yuan to 19 yuan, and the second time was at the end of 2021, from 19 yuan to 22 yuan. Even in addition to increasing the price of subscription members, not long ago, iQiyi CEO Gong Yu also made a statement that the ticket price of online movies was too low.
On the side of Tencent Video, in April 2021, it has also announced that its VIP members have increased their prices across the board, and the price of consecutive monthly subscriptions has risen from the previous 15 yuan to 20 yuan. Although mainstream video websites such as Youku Video, Mango TV, and Migu Video have not yet raised prices in 2021, at the beginning of 2022, Mango TV and Migu Video have successively announced that they will increase the price of subscription members. It is not difficult to find that after 2021, "price increase" has also become an unavoidable keyword for head video websites.
Previously, in the earnings conference call in the second quarter of 2020, Gong Yu had said, "Monthly subscription fees are iQiyi's main income in the future, and the current monthly fee income cannot cover the cost of content." iQIYI provides users with quality content, but membership pricing is too low." This actually points out the reasons for the increase in the price of subscription members on video websites, that is, the high cost of content and the relative stagnation of the number of paid users, resulting in revenue problems.
Throughout the first three quarters of 2021, according to the financial report data released by iQiyi, its revenue per quarter was stable at 7-8 billion yuan, of which the revenue of subscription services was basically 4-4.3 billion yuan. However, correspondingly, from the first quarter to the third quarter, the company's net loss was 1.3 billion yuan, 1.4 billion yuan and 1.7 billion yuan, respectively. In fact, since iQIYI's listing in 2018, its cumulative net loss has exceeded 30 billion yuan, and the current stock price is less than 1/3 of the current price.
In addition to iQiyi, in fact, from the financial report information released by Alibaba and Tencent, it is not difficult to find that whether it is Youku or Tencent Video, the probability is still not profitable.
While the price increase may be able to boost revenue from subscription services, iQiyi's paid memberships in the third quarter of 2021 were 103.6 million, down 1.15% year-on-year and down 2.4% sequentially. It is not difficult to find that while video sites increase short-term revenue by raising prices, they may also face the loss of more paid users.
Professor Pan and Lin, executive dean of the Digital Economy Research Institute of Zhongnan University of Economics and Law, have previously pointed out in interviews with relevant media that "there is a relationship between the price of membership fees and the purchase volume of members." Price increases may be optimization, but they may also end up worsening the operation due to excessive prices. The key depends on the user's willingness to pay and purchasing power, whether it matches the company's price increase expectations, if not matched, it is tantamount to cutting flesh and filling sores. ”
According to the calculations of third-party institutions, as of the third quarter of 2020, the payment rates of Tencent Video, iQiyi, Mango TV and Bilibili were 23.33%, 18.03%, 15% and 7.61% respectively. From this data, it is not difficult to find that at present, for video websites, the payment rate obviously has some room to rise, but this undoubtedly has higher requirements for its content quality and user experience.
Advance ON DEMAND: How the video site will change after the wave
To say that the most "hi big pu ben" event in the Internet industry in 2021, then the video website "canceling advanced on-demand" will almost certainly be at the top of the list. Following the august 2021 Shanghai Consumer Protection Commission and the China Consumers Association, which successively issued articles saying that the advanced voicing of video websites was suspected of bundling sales, ignoring consumers' right to choose, and harming consumers' rights and interests. Subsequently, since October 4, IYoteng has also announced the cancellation of this service.
This service, which was launched by Tencent Video's online "Chen Qing Ling" and carried forward by iQiyi's blockbuster "Qing Yu Nian", has become an "essential tool" for various head video websites after 2 years of development.
In response to the Shanghai Municipal Consumer Protection Commission's point of view that the rule of "3 yuan per episode and must be unlocked episode by episode" ignores consumers' right to choose, iQiyi and Tencent Video responded that "advanced on-demand" is actually to meet the needs of users with more diversity. And iQiyi has also said that "the cancellation of advanced on-demand is not subject to regulatory pressure, but more consideration of the consumer psychology of members."
Despite the divergence of views on the service between video sites and consumers, the cancellation of the advanced on-demand service has become a fact. And in order to improve the user experience, iQIYI officially announced in October 2021 that it would cancel the content promotional patches visible to members. The so-called content promotion patch is actually a common advertising method used by domestic head video websites, and in addition to non-member advertising, there are various types such as "exclusive" advertising for paying users, as well as in-film advertising.
But the reason for this kind of "exclusive" advertising for paid users is not difficult to understand, after all, as another important source of revenue for video websites, the advertising business also has an indispensable position. Taking iQIYI's financial report data as an example, in the third quarter of 2021, its membership service revenue accounted for 56.6% of total revenue, and advertising revenue accounted for 22.4%. Therefore, whether it is to cancel the advanced on-demand service or reduce the content promotion patch, it may have a certain impact on its revenue.
However, is the reduction in paid services and "exclusive" advertising the only reason why video sites have been mired in losses? Apparently not. From the financial report, it is not difficult to find that iQIYI's revenue is mainly for membership services and online advertising, while in the third quarter of last year, its content distribution revenue and other revenue accounted for only 21%, even less than advertising revenue. It is not difficult to see from these data that in fact, the current revenue source of video websites is indeed relatively single.
As some industry insiders have said, "Video sites are essentially a content display platform, so users' intentions to pay will obviously be oriented to content quality." In the past few years, whether it is the pursuit of traffic stars or the smashing of money to grab copyrights, the final result is only a frequent "bad drama", so the future trend is bound to return to the content quality itself.
Content: The spring of premium content may be coming
When it comes to the content of video websites, the performance of Netflix and Disney is also unavoidable. But to say that they are all high-quality content, in fact, it is not the case, after all, the series produced by Netflix are not all "good products". According to relevant data, the company spent about $17 billion on content costs in the first three quarters of last year, and some analysts expect Netflix to spend more than $17 billion on content in 2022, up 57% from $10.8 billion in 2020.
In 2021, however, Netflix's nascent global blockbuster content is almost only "Squid Games", although it became the highest-grossing series of all time and was watched by nearly 142 million home users in the month after its broadcast. In terms of revenue, "Squid Games" generated nearly $900 million in revenue for Netflix with more than $20 million. But the crux of the matter is that blockbuster content actually has uncontrollable contingencies, even for Netflix.
Even in the case of a high level of content and occasional hits, Netflix is also facing the problem of slowing down the growth rate of paid subscribers. In the company's financial report for the second quarter of 2021, its paid users have reached 209.18 million, an increase of 8.4% year-on-year, but in the North American market, it has reduced its paying users by 400,000. And correspondingly, in addition to the Indian market, Netflix also adjusted the price of subscription memberships last year. Not long ago, Netflix made a comprehensive increase in its streaming subscription service in the US market, and various packages rose by $1-2.
Similar to Netflix, Disney's video streaming service Disney+, which holds a large number of mature IPs, is actually not too eye-catching in 2021. Previously, in September last year, Disney CEO Bob Chapek had said that "the growth of the company's streaming division has encountered some resistance and is expected to add a few million users in the fourth quarter."
However, it is not difficult to find from the layout of Netflix and Disney in the Asia-Pacific market in recent years that this region may become the key to its new user increment in the future. Among them, Netflix chose to cooperate with the Korean local production team, starting from the investment in Bong Joon-ho's "Tamako" in 2017, it has successively launched "Kingdom", "Itaewon Class", "Squid Game" and other masterpieces, and the recently released romantic comedy "That Year We", which also entered the TOP10 of Netflix's global list.
At the same time, Disney+ has gradually developed related business in Asia, and since October last year, it has released a series of movies and dramas for this region, such as the Korean TV series "Snowdrop Flower" and "Blackpink: The Movie". In the Chinese market, there are also "Mei Yanfang (Director's Cut Version)", "The World" and other content, which will be launched this year. A few days ago, Disney also announced the establishment of a new international content department, mainly focusing on regional original content.
However, in the domestic market, iQiyi did not continue high-quality dramas such as "The Hidden Corner" and "The Silent Truth" in 2021, and Tencent Video only received some attention such as "Sweeping Black Storm" and "You Are My Glory". And after the outbreak of the "pour milk" incident in iQiyi, the relevant supervision has also begun to rectify some chaos in the film and television industry, which makes the investment in the film and television industry gradually move towards rationality, rather than the previous "traffic first".
However, it is worth noting that in 2021, iQIYI has also stepped up the launch of original content for overseas markets, such as the first original Korean drama "The Frightened Cohabitation", the first Southeast Asian self-made drama "Soul Ferry • Nanyang Legend", etc., but these contents are not currently open to domestic users. According to the financial report information released by iQIYI, the number of its overseas users is increasing significantly, and Gong Yu also pointed out that "we see a promising growth trajectory for new initiatives, such as iQIYI Express Edition and overseas business."
In fact, since December last year, iQiyi and Youku have also changed the account sharing model. Among them, iQIYI announced that it will convert the member's viewing time based on the member's click distribution, and increase the incentive fund and subsidies. Youku has also recently launched a new "post-broadcast rating" model, which also aims to return the decision power of content revenue to the C-side. This may also mean that in the future, high-quality content will be able to obtain sub-accounts and incentives that match its quality based on the user's liking.
Therefore, returning to the quality of the content itself is likely to become the keyword of major video websites in 2022. Perhaps everyone can also expect that with the passing of the "traffic first" era and the fact that video sites must pay more attention to user experience, the spring of quality content may not be far away.
【The picture of this article comes from the network】