Cutting into the long video track, Douyin and Kuaishou began to play high frequencies and play low frequencies, while long video companies had almost no ability to fight back.
In 2010, Gong Yu, who was not confused, decided to start his own business and founded iQiyi (IQ.US), at that time, Baidu also wanted to make a big video business, so Baidu became its largest investor.
At that time, everyone knew that the video website burned money, but no one expected to burn for so long, from the establishment of iQiyi, it burned for 12 years.
In March 2018, iQiyi went public with a market capitalization of $11 billion, and in the months after listing, it rose 1.5 times. As of press time, iQiyi's market value is still hovering at $3.8 billion. If an investor bets on a long video site from the day of listing, he will not only lose 70% of the principal, but also wait 4 years in vain.
Four years later, on March 1, iQiyi's cost reduction and efficiency increase strategy was remarkable, with operating losses in the fourth quarter down 25% year-on-year and 29% month-on-month. And iQiyi said that it will break even the non-GAAP operation in 2022.
After 12 years, the 54-year-old Gong Yu finally realized iQiyi's dream of not burning money. Gong Yu believes that China's long video industry has entered a new stage, from the original pursuit of share and rapid growth, to the pursuit of efficiency, the pursuit of loss reduction, and the ultimate pursuit of profitability.
Subsequently, Station B also announced the goal of achieving operational breakeven in 2024, which also verified this.
However, the "battle" between Gong Yu and his long video website did not end with the truce of the opponent, and the short video platform broke into the territory of the long video as a "barbarian".
In the past two years, short videos have been testing the waters of long videos one after another, and have also robbed the copyright, but this time, the short videos have come more violently. On March 1, TikTok announced that it would launch a 10-minute long video product, longer than the previous three minutes.
This means that the short video platform represented by TikTok will officially start a war with long video giants such as YouTube and Instagram. One side wants a long video to truce, and the other side wants to attack the long video with a short video.
Why do short videos make long videos? Where is the video industry headed in the future? This article will focus on these aspects.
01 Short video platform comprehensively kills long videos
Relying on the ultra-high penetration rate of short video of more than 70%, the short video platform has obtained a huge user base.
According to the latest data, the monthly active users of short videos are as high as 920 million, while the number of mobile Internet users is only 1.174 billion. Douyin already has 1 billion users, and TikTok's success has surpassed Google to become the world's largest app.
Traffic is the biggest moat of Internet companies, when the growth of short video users reaches the limit, short video platforms will inevitably work on the indicator of user duration.
QuestMobile released data showing that the growth rate of active users in the short video industry has slowed down, while the length of user time has shown an accelerated growth trend, which is a new change in the short video industry.
The growth of the number of short video users tends to slow down, and the length of users has increased significantly
Improving user stickiness is the easiest way for short video platforms to increase user time. Short video has fragmentation and homogenization characteristics, this feature is not conducive to the production of long-term user stickiness, short video platform can only continue to enrich the content of video, which will inevitably expand to the long video basin.
The field of long video has long become the Red Sea, since 2012 Youku and Tudou, Aiyouteng has been fighting around copyright and scarce resources for 10 years, greatly increasing the price of content copyright, so that the long video platform loses money year after year.
Continuing the copyright tug-of-war is not something that short video platforms can afford. Although the users and revenue of the short video platform are high, their financial pressure is also relatively large, taking Kuaishou's third quarter report in 2021 as an example, its third quarter loss was 7.09 billion yuan.
Short video platforms have chosen to focus on attacking the core areas of long videos. These core areas are short dramas, variety shows, online dramas and self-made dramas, and the relevance of these areas to short video platforms is also quite high.
Self-made dramas and short dramas have low cost, low threshold, high return, and the "seductive" characteristics of small and large.
Sun Guangyang, CEO of Shanghai Jiying Pictures, the producer of "You Are My Exclusive Favorite", once said in an interview with the media, "The current short drama, like the net university (network movie) from 2015 to 2018, can use hundreds of thousands of investment to obtain millions or even tens of millions of accounts", in this regard, short videos can greatly use their platform advantages.
Kuaishou's layout for short dramas has begun in 2019, focusing on both channels and content.
In terms of channels, the "Kuaishou Small Theater" was launched in 2019, and users can watch short dramas on the platform, which also makes the short drama content products realize centralized operation. After that, the "Chasing Duck" APP was launched, which enabled Kuaishou to realize the branding and platformization of short drama videos.
In terms of content, Kuaishou has adopted a support method that is good at it, and has successively launched the "Xinghai Plan" and the "Kuaishou Xingmang Plan" to encourage content providers to provide more short drama content through traffic incentives and collection competitions.
Compared with Kuaishou's grassroots route, Douyin adopts self-made and IP models to create a boutique route. In January 2021, Douyin launched the first self-made boutique vertical screen micro-short drama "Dream! Jingjing", the drama is starred by Jin Jing with twenty male artists.
The Douyin platform has successively created a hot IP in terms of short dramas, such as "Dragon King's Son-in-law" and "Long Live the Friendship of the Black Egg Brother and Black Egg Alliance".
Similarly, Douyin has also carried out a support program, and in April 2021, the "Short Drama New Fan Plan" was launched in the development of short dramas, and high-quality short dramas produced by MCN institutions or individual authors can obtain traffic support and cash rewards by participating in the program.
Variety show is the traffic "cow" discovered by the long video platform.
Aiyouteng's head variety show mainly relies on its self-made studios to create, while Douyin, Kuaishou (01024. HK) is mainly responsible for the production of variety shows, and the specific content production is handed over to the partners, and this cooperation model short video also has platform advantages.
Taking the talk show "Super Nice Conference" produced by Kuaishou and produced by Xiaoguo Culture as an example, after the first live broadcast of the main film was launched, the number of views in less than a week has reached nearly 80 million, which is almost equal to the results of the first week of the broadcast of "Sister Riding the Wind and Waves 2".
Douyin's "To You, My New Business Card" also began broadcasting at the end of 2021, which is a celebrity customized variety show that has achieved 160 million plays.
Not only online dramas, self-made dramas, short dramas and variety shows, but also the traditional film field, short video platforms have also launched an attack.
This year's Spring Festival Kuaishou launched the "Kuaishou Screening Hall Spring Festival Free Watch" activity, which has become the highlight of the Spring Festival activities.
According to the data released by Kuaishou, after the Kuaishou Screening Hall was launched, users searched for more than 40 million searches related to film and television content in Kuaishou every day, which was directly doubled compared with the increase before the launch of the screening hall.
Kuaishou insiders said that the content of the Kuaishou Screening Hall comes from the in-depth cooperation between Kuaishou and the film and television copyright holders on the one hand, and partly based on the open ecology, and the in-depth cooperation with the popular and LeTV in the access station. This is not the same as the model of high-priced snapping up copyrights on long-form video platforms.
The boundaries of long videos are broken by short videos one by one, and 10-minute videos are the next field. Tictok has also launched a challenge, in fact, Kuaishou and Douyin have also tested long video applications, but they have not been expanded on a large scale, and once the conditions are ripe, it is expected that the short video platform will fully kill long videos.
Is there a higher goal for short videos to kill long videos on such a large scale than to increase user stickiness?
02 The combination of long video and short video is the mainstream
The business model of long video is simple, trying to build its moat by acquiring the copyright to own enough quality content. This model has a fatal problem, the cost of copyright and broadband is too expensive, resulting in long-term loss-making for businesses.
On March 1, iQIYI's stock price rose sharply after releasing its 2021 financial report, not because the spring of long videos has come, but because iQIYI promised to turn around its operations in 2022. The way to get rid of losses is to reduce costs, and perhaps the market has seen the future of the long video industry and does not want to let it continue to burn money.
Compared with short videos, long videos have two major disadvantages, the first of which is a weak platform.
Videos are divided into three categories according to length, short videos within 1 minute, medium videos of 1-30 minutes, and long videos of more than 30 minutes.
Short video is dominated by the UGC production model, in which the production and consumption of content comes from users. The focus of the short video platform is on platform construction and traffic acquisition, coupled with the emergence of algorithms, short video platforms have natural platform advantages.
The situation is the opposite of long video, because the content production of long video is more specialized, requiring professional individual and institutional production.
Long video platforms tend to purchase large amounts of content, and long video platforms are slowly evolving into "content-like" producers. His advantage is also to have more content, which directly leads to the weakening of the long video platform effect.
The second disadvantage of long video has been proven, and the penetration rate of long video users is not as good as that of short videos. The model of short video is fragmented, and everyone's participation is very high, resulting in a high penetration rate of users on short video platforms, reaching an average of more than 70%.
The long video content is mainly purchased by the platform, and the user membership system consumption model leads to low user participation and a naturally lower penetration rate, which loses the user advantage.
According to the data released by QuestMobile, in December 2021, Douyin had 670 million monthly active users, 410 million Kuaishou, and short videos achieved curve overtaking in a short period of time, iQiyi 481 million, Tencent Video 445 million, and Youku 240 million.
The ultimate competition of the Internet is traffic, and long video has obvious disadvantages in this regard, if in the same track, long video platforms can easily be killed. In the latest situation, short videos and long videos are gradually merging into the same track, and the competition between them is boundless.
Talking about the competitive landscape of long videos and short videos, Chen Rui, chairman of Station B, believes that the length of videos is not the main reason why users choose.
"The consumer is the video he likes to watch, the video with good content, and not the so-called short or long, I think there may be a difference in the scene, but the length is not the reason why the user chooses."
Long video platforms are also actively laying out short video business. On April 15, 2021, Tencent Platform and Content Business Group (PCG) announced that it will integrate Tencent Video, Weishi and App Treasure into the online video division and continue to focus on the video track.
At the quarterly earnings report meeting, Tencent mentioned that the adjustment wants to enrich the short video content by adapting the works of the long video library. "At present, long video and film and television companies are joining forces to put pressure on short video platforms on unauthorized "secondary creation" short videos of film and television works."
Judging from the current trend, long video and short video may not be separated from each other, and the mainstream of the video industry will be a comprehensive platform.
03 Who will dominate the battlefield
Burning money has never been the standard for judging the model of the Internet industry, but it is not dare to continue to burn, which may be the beginning of the decline of the model.
The latest financial report shows that in the face of continuous expansion of losses, long video platforms have thrown out non-GAAP operational turnaround goals. iQIYI's fourth quarter and annual financial reports in 2021 show that open source cost reduction and cost reduction have achieved certain results, and propose to break even the non-GAAP operation in 2022.
Gong Yu, the founder of iQIYI, said on the conference call that market competition has changed from simply pursuing quantity to focusing on quality, and the focus of operation has changed from seizing share to improving operational efficiency, which has become the consensus of the head enterprises in the long video industry.
On March 3, Station B announced the latest financial report, in the face of the expansion of losses and the unfavorable situation of game business expansion, Station B also proposed the goal of narrowing the operating loss of non-GAAP in 2022 and breaking even in 2024.
On the one hand, the long video platform began to collect gold, and the head players wanted to end this war of attrition that had been burning money for more than ten years as soon as possible. On the other hand, short video platforms are attacking the hinterland of long videos in a big way, trying to continue to expand competition.
The latest number shows that short videos have surpassed instant messaging to become the number one app with the longest user time. If the video platform will develop into a converged platform, there is no doubt that short video will be based on leadership advantages, and many long video companies will transform into content providers.
Such things have also happened in the media industry, and in the past, media platforms have been led by print media and websites, and four major portals such as Sina Phoenix have also flourished. Since the emergence of aggregation platforms such as today's headline Weibo WeChat public account, the attributes of traditional media platforms have been greatly weakened, and they have gradually transformed into simple content providers.
We will see if the final direction of the video industry is also the same.