After burning 100 billion, Ai Youteng can't move

"iQiyi come on." After seeing the message that iQiyi said it wanted to make a profit, Zhou Yun sent a circle of friends. He served as iQIYI's editor-in-chief of literature and left last December when iQIYI laid off staff. On March 8, when chatting with friends, he lamented that the current practice of video websites is to pay for some short-sighted behavior in the past.

Before joining iQiyi, Zhou Yun had served as a business leader in Both Tencent and Alibaba Entertainment, and for the previous digital content, there would be a feeling of more than enough and insufficient strength, knowing that there were many problems, there were many incorrect things, but it was difficult to return.

In 10 years, the three video websites of IYoteng (iQIYI, Youku, Tencent Video) have burned a total of more than 100 billion yuan, of which iQIYI and Tencent Video each have more than 500 million monthly active users, as well as about 100 million paid members, breaking pirated videos and defeating TV stations, but it seems that they have not created more and better film and television content than 10 years ago.

Even the video website itself is facing layoffs, throttling, being impacted by vibrato and Kuaishou, the loss of free users, the arrival of paid users to the ceiling, and the perennial loss of money can not be profitable.

In 2022, video sites are finally starting to change. Gong Yu, founder and CEO of iQIYI, said on March 1 that the long video industry has entered a new turning point, pursuing loss reduction and profitability, rather than the past pursuit of high-speed growth and market share. Station B chairman and CEO Chen Rui said on March 3 that in the past, Station B gave 70% of its energy to user growth and 30% to income growth, and this year will adjust the proportion of distribution, which will be "five five". Alibaba's latest financial report shows that youku's Alibaba entertainment losses have narrowed. For this change, the capital market is happy, after iQiyi announced profit expectations, the US stock price soared nearly 40% that night.

This year could be the closest video sites are to profitability. They no longer burn money, no longer roll inside, each of them regards cost reduction and efficiency increase as the most important thing, this time, can they succeed?

No more burning money

"We have a very low pass rate for our projects." Screenwriter Xiaohang told the Economic Observer that since the cold winter of film and television in 2019, the amount of projects has been shrinking, the most obvious at the end of last year, and many projects have not passed. Many film and television practitioners have switched to short videos.

Recently, there have been screenshots of the circle of friends of Han Zhijie, vice president of Tencent Online Video, and Xie Ying, general manager of Youku Episode Center. Han Zhijie said that the most tragic project decision-making meeting in history was held, more than 70 projects were held, and only 2 were finally passed. Xie Ying also said in the circle of friends that at the last project meeting a few years ago, 53 episode projects had a green light meeting, and finally only one IP was locked.

This is in stark contrast to the crazy project situation in previous years. Muzi's feeling of passing the meeting rate is a bit "scary", from 2017 to 2019, Muzi's film and television company has produced customized dramas such as iQiyi, Tencent Video, Youku, and Mango TV.

At that time, there were several PPT, and there was a story outline that could get money from the platform. Muzi often held project meetings with several platforms, and the platform's requirement for the producer at that time was to be able to attract new users. Everyone rushed to work, and after getting the money, they started the machine within a few days, and sometimes they didn't even write the script when they started it. A drama shooting time is as long as 3 months, as short as 1 month, the crew writes the script while shooting, and every day is a flying page. Even if the scenes they shoot themselves feel are "garbage", the platform is willing to pay for real money and silver.

"In the past few years, it was particularly easy to cheat the money of the platform, but these two years are not very good to cheat." Before turning to screenwriting, Xiaohang also took several years of projects. He told reporters that the industry is perfunctory, and there are many people who covet quick money, so although so many episodes are produced every year, most of them are of poor quality.

Those were the years when video sites were soaring. From 2017 to 2019, iQIYI invested 12.6 billion yuan, 21.1 billion yuan and 22.2 billion yuan in content costs respectively. Compared with before, iQiyi's content cost in 2015 was only 3.7 billion yuan. Tencent Video invested more than 50 billion yuan in the same period. Yu Yongfu, then chairman and CEO of Alibaba Culture and Entertainment Group, said in 2017 that he would invest more than 50 billion yuan in support content within Alibaba Entertainment within three years.

According to the statistics of Guosheng Securities Research Institute, in 2017, Aiyou Tengmang (iQiyi, Youku, Tencent Video, Mango TV) had a total of 691 new dramas, 733 in 2018, 739 in 2019, and it was not until 2020 that the number of episodes began to decline, and in 2020 it was 669.

Those were also years when video sites lost more money. iQIYI's annual net loss increased from 3.736 billion yuan in 2017 to 10.323 billion yuan in 2019. In fiscal 2019, Alibaba Entertainment lost 15.796 billion yuan after adjustment.

In 2022, loss reduction has become the most important thing within the video website. In iQiyi's latest quarterly earnings call, the most mentioned by management was the narrowing of losses.

In the recent earnings call of Station B, Chen Rui said that income growth will become a more important job than in the past this year. They also gave a profit schedule, and iQIYI aims to achieve breakeven at the operational level of non-GAAP for the whole year of 2022. The goal of Station B is to achieve a non-GAAP P&L offset by 2024.

A video website employee told reporters that the most emphasized word within the company is to reduce costs and increase efficiency, and the recent business contraction is particularly obvious, he feels, "It is also a good thing, the previous things were too watery, now compress it, maybe you will make excellent works." ”

Tv drama researcher Li Xingwen told reporters that the recent low project passing rate does not represent the industry average, "It is not normal, just a temporary state." "Now it is the platform forced to brake, forced to reduce the amount, forced to reduce the loss, after this period of time, it will still return to a much larger than the current, but will be more boutique proportion."

For the current practice of the platform, Xiaohang expressed understanding, "After all, the entire industry is going downhill, not only video websites, TV stations have no money." "In the past few years, the platform drama has expanded rapidly, especially the mid-waist drama accounted for a large proportion, but did not bring corresponding returns to the platform," Now they have also seen that the number of users has basically reached the top, and if they want to increase membership income, they have to rely on big dramas to bring." ”

Towards cooperation

In 2022, iQIYI's new year-round hit drama "The World of Man", the audience followed the fate of the characters in the play and wept from time to time, and insiders discussed that iQIYI and Tencent cooperated again. This drama is produced by Tencent Pictures, and last year's iQiyi hit "Son-in-law" is also a cooperation with Tencent Pictures.

On February 6, Station B also joined the camp of cooperation with Aiyouteng, and the four platforms announced on Weibo at the same time that they would launch all ten seasons of "Friends". Last year, these four platforms were still confrontational roles, and Station B was jointly attacked by three companies for stealing "Friends".

A person from a video company that does online movies told reporters that in the field of online movies, the trend of cooperation between several platforms is more obvious, "simulcasting has become a big trend." "Last year, the highest number of online movies were basically released together, and cinema movies such as "Chosin Lake" and "Hello Li Huanying" were also jointly launched when they premiered on video websites.

These movies are not within the scope of video members to watch, will be charged separately, "simulcast to make the market bigger", the above-mentioned person said, this piece of income, for the video company is real money and silver new income, for the film company is also.

"In fact, there were signs of this at the beginning of last year, and everyone has already made peace and jointly confronted foreign enemies." A person who has worked in a video company for 7 years told reporters that it is all like this now, and there is nothing to roll.

The delay in making a profit for video websites is largely the "evil consequence" of the internal volume. As early as 2010, when iQiyi was first established, Gong Yu said that it was expected to achieve profitability in three years. In 2011, he was still confident and said he hoped to be profitable next year. In 2012, Gong Yu was optimistic that the overall profitability of the domestic video industry may be at the end of 2013 or the beginning of 2014. Gu Yongjun, who founded Youku, is also full of confidence, and he believed in 2009 that Youku was already on the road to profitability, and that "profit is more important than listing." By 2017, Gong Yu said that he did not make a profit forecast for which year, because his "old forecast was inaccurate." ”

Li Xingwen told reporters that after 2014, the video industry entered the arms race, and a large amount of hot money poured in, which promoted the inflation of the industry as a whole, and also brought about the imbalance between the platform's income and expenditure, and could not make a profit.

The most typical internal volume between video websites is the struggle for copyright. In order to grab IP and grab episodes, they raise prices for each other and fight fiercely. Zhou Yun has seen a novel IP, the author's real psychological bid is not high, but the final film and television adaptation of the purchase price is more than 3 times the original price.

In the copyright dispute of "Ruyi Chuan" in 2016, At the beginning, Youku and Tencent Video planned to pay 600 million yuan each, and finally Tencent Video grabbed the exclusive broadcasting rights at a sky-high price of 1.3 billion yuan. In May 2017, Tencent Video employees and Youku employees made a big fight at a dinner party at a film and television company's annual new drama recommendation meeting, and Tencent Online Video CEO Sun Zhonghuai said in the circle of friends at the time that Youku's behavior was because it could not get the copyright of "Surgical Storm". Afterwards, the official microblogs of the two companies also issued statements condemning each other.

Under the platform robbery, film and television copyright has become a sky-high price. A novel is licensed to adapt for 40 million yuan, and a drama costs hundreds of millions of yuan, which makes video companies unable to bear it. In 2016, Han Zhijie "fired" at a film and television company during the Shanghai TV Festival, and he pointed to the kidney at a forum, saying that the platform was selling kidneys to buy dramas. In 3 years, the price of dramas of the same scale has risen by 30 times, and the 2013 drama king "Zhen Huan Biography" is only 300,000 yuan an episode, and the 82 episodes of "Ruyi Chuan" in 2016 sold for 9 million yuan per episode.

In this crazy copyright grab war, even if the platform feels expensive, it has to buy. When everyone was spending more than 100 million dollars to hoard copyright, Storm withdrew from the copyright war, and eventually Storm Video disappeared in the market. Zhang Chaoyang, the founder of Sohu, also felt that the copyright fee was too expensive and withdrew from the competition, and eventually Sohu Video also withdrew from the first camp of video websites. In his speech at the 2017 iQIYI World Congress, Gong Yu said that in the past seven or eight years, the purchase of copyright at a high price has been a mistake in direction, but it is another step that has to be experienced.

In 2017, in addition to the copyright dispute, video companies opened up a new inner volume road: doing self-made dramas to grab paying users. At the end of 2016, video websites have announced brand upgrades, Tencent Video declared that "it is not a good time", Youku said that "this world is cool", its essence, are to do exclusive homemade dramas. Sun Zhonghuai said at the time, "In 2017, we will continue to increase investment in self-made content, and in 2017, the investment in self-made content will increase by about 9 times compared with 2016." ”

The platform custom drama produced by Muzi is the product of 2017. He told reporters that the platform's mind at that time was very simple, that is, to take money to buy users. Although it is a content producer, an important responsibility of Muzi's company is to pull new, they buy membership cards to send people around, "how many new users registered from your page is a key criterion for measuring the success of your show, even if you don't make money, you can pull a certain number of new people", "No one cares whether this show is good or not." ”

"Whether it is Tencent, Alibaba Entertainment, or iQiyi, the Internet platform has a commonality, that is, the annual indicators are all around the traffic, the boss actually looks at how many users can you precipitate in the business you do, how low the cost to pull new users, and then stay on my platform for a long time." Zhou Yun feels that sooner or later this model will go wrong, even if there is no impact of the continuous sharp decline in Chinese stocks, the node of problems will come.

After many years of internal volume, the monthly active users of iQiyi and Tencent Video platforms, which have become the head platforms, have stabilized at 500 million to 600 million, and the number of paid members is also about 100 million, basically reaching the user ceiling in 2019. In 2022, several video platforms finally stopped rolling in and began to work together.

Not small but beautiful anymore

On March 1, at iQIYI's earnings conference call, Gong Yu once again proposed to make a profit after many years, and proposed to make a refined choice and strictly control the content that did not have a good broadcast effect. Immediately afterward, Chen Rui also said that he wanted to make a profit at the B station earnings conference. Mu Zi sighed a little at this, "They finally figured it out." ”

Muzi has made money from video websites, and now he will miss that era from time to time - video websites have "thrown coins" and invested tens of billions of yuan every year, so many people have achieved financial freedom.

As a member of the film and television producer company, he has cooperated with several video platforms, done online dramas, and also done online movies, all of which were popular "small and beautiful" dramas at that time, with an investment of tens of millions of yuan. He said a few names, the reporter has never heard of them, and he himself does not like the dramas he has made, self-deprecating, "Everything is garbage."

In 2017, his company made a customized drama with a total investment of 50 million yuan, two video platforms out of the big head, 40 million yuan, and a film and television company out of another 10 million yuan. In the end, the drama did not set off a splash, the number of clicks was not high, and the total amount of the entire drama was less than 10 million yuan, "a mess of losses." ”

Most of the losses are borne by the video platform, as the contractor, basically can protect the harvest from drought and flood. Muzi did 5 dramas, all of which lost money, but this did not affect their company's money, "Our original intention was to make money, we did not plan to create artistic masterpieces, and to be honest, we did not have the ability to make a good drama." ”

In those years, each platform announced dozens or even hundreds of films. Except for the occasional few that have become blockbusters, most of them are silent. "They are all racing, and every year there are more than a bunch of waist dramas, and hip dramas are also being done." Muzi said, "In that environment, the platform does not lose money to see the devil." ”

Zhou Yun told reporters that after suffering losses and eating too much, the platform also summed up some experience: content platforms above A level can generally make money, and B-level may be flattened, and further down will lose money. If the platform wants to turn up, it depends on how much head content he can make every year, waist content, and the more he does, the more he loses. However, how to evaluate a drama is S-rated or A-rated, B-rated, is still a confused account, and there is no reliable standard.

In 2022, video sites began to turn around, only doing boutiques, no longer doing low-quality episodes. "In the past, we thought that the very small vertical class was seen by someone and could be calculated. Now it seems that the opportunity cost is too high. With this energy and time, it is better to develop A+ and S grades with a wider audience and more innovative themes. Wang Xiaohui, chief content officer of iQIYI, said in February this year that in 2022, there are some things to give up: abandon content that simply caters to the direction, abandon the content that is suspended to the direction, give up the content that obviously loses money, and give up the content that is not innovative.

Xiao Hang has recently clearly felt this trend, "the previous kind of waist drama has been greatly reduced, and the threshold has been significantly raised." He feels that this is good and bad, the disadvantage is that when the threshold was relatively low before, the platform did not exclude cooperation with young directors or new companies, and now that the threshold is high, it is more difficult for young people to get ahead. The advantage is that it can obviously wash away those practitioners who only want to make quick money and circle money.

Li Xingwen told reporters that the next year will be a process of the platform struggling to turn around losses. As a practitioner, he supports these initiatives on the platform. Of course, film and television projects will definitely reduce profits in a large amount, and for production companies, profits will also be greatly compressed, "No way, that is, the whole industry is living a hard life, surviving is the first." ”

Profitable

The video website was born more than ten years ago and has never been profitable. In 2022, the video website represented by iQiyi and Station B once again put forward the slogan of profitability, this time, can they get their wish?

"As long as they want to make a profit, they can do it." Li Xingwen thinks. The above-mentioned person who has worked in the video company for 7 years also told reporters that it is easy for the platform to make a profit, as long as the cost is controlled. Before Youku was acquired by Alibaba, it also achieved a quarter of profitability.

Of course, profitability requires the tacit understanding common to several platforms. "It is necessary to enter a process of reducing quantity and improving quality at the same time. In addition, we must truly take the balance of payments as the primary task, and no longer take the preemption of the market as the primary task, so that we will live within our means, make careful calculations, and achieve profitability. Li Xingwen told reporters.

However, controlling costs is only one aspect, and at the same time, it is more important to increase revenue. After leaving iQiyi, Zhou Yun was a bit of a pity for the membership system. "At the beginning of the design, there was a lack of foresight, the membership model became a basket, a brain put a lot of content into the members, wanted to do the membership plate first, but buried the mine for the follow-up operation, and it was difficult to return." Since last year, Aiyou Tengmang has been repeatedly complained by users and criticized by the Consumer Protection Commission because of its advanced on-demand members, and finally canceled this model. At the same time, the four platforms continue to increase membership fees, and each time the price is raised, it also attracts users to complain.

In 2015, the video site saw the potential of Netflix members, launched a membership model in China, and quickly found another way to make money outside of advertising. Unfortunately, the early membership model was too extensive, did not do hierarchical operations, and did not let users realize that top content needs to pay more, which brings follow-up problems and limits the upper limit of member income.

In recent times, Zhou Yun has also discussed the problem of the video industry with many peers, why did the once lively industry with unlimited scenery come to this point? In the final analysis, he felt, "or the mode of traffic thinking is wrong, every time it is actually the content to the traffic compromise, the lack of long-term positive content accumulation", he told reporters, "in the entertainment industry, money and scale can not solve everything, before many Internet business decision-makers did not believe, now look, do not hit the wall is not going back." ”

In 2022, some new changes are also happening in the video industry. The most obvious is the technical improvement, iQiyi digitized the "bad well" scene in last year's hit drama "Wind Rises in Luoyang" and produced the test film "The Rise of bad wells", saving 30% of production costs compared with the past. In the past, the traditional shooting method would build a city for a plot, or use costume prop scenes that could not be reused, which could easily bring waste and bring uncontrollable costs. When the technical means are improved, these parts of the high cost of production will decrease. This helps to produce good content and also coincides with the loss reduction plan of video websites to reduce costs and increase efficiency.

"Although I shout that I don't have any money, the projects that should be done have been done." Several projects that Xiaohang has contacted are still being successfully implemented recently. However, he hopes that the platform can give creators more patience, "in fact, they are more unwilling to invest time than they are unwilling to invest money." "A practice in the circle is to only pay attention to the content of the first five episodes, because when the platform reviews the script of the first five episodes, the producer will repeatedly modify the quality and quantity to ensure that the platform will pass." But once the meeting is over, it will be madly rushed to catch up, "it is likely that the first five episodes took a year to polish, and the next thirty episodes took a few months to complete, especially sloppy ending, in this case it is impossible to come out of good things." 」 ”

(Xiao Hang, Mu Zi is a pseudonym)