The author | Zu Yang
Finally, the price of video memberships has increased.
On April 9, Tencent Video released the news of price adjustments for Tencent Video VIP and Super Film VIP members, slightly increasing the prices of some service options. In fact, since December last year, video platforms such as iQiyi, Mango TV, and Migu Video have all raised prices to varying degrees for VIP package services.
Tencent Video, iQiyi, Mango TV, Migu Video membership prices
However, in contrast, whether it is the price increase range or the absolute value of the price after the increase, the price of domestic video membership is still in a low state. In foreign countries, Disney+ announced price increases in the first year of its launch; Netflix made a comprehensive price increase in January this year, and its standard subscription price has experienced 7 increases in 11 years.
In fact, "pricing" has always been an art in business. Overpricing and underpricing can lead to a series of problems. We have seen Apple's price increase of 80% in the past 14 years, but users still pay; the price of new tea drinks has been reduced, but people have questioned that behind the price reduction is the reduction in quantity and quality.
The rise and fall of the price is only a value, it is affected by a variety of factors, and the foothold of all phenomena is whether the product behind it can support such a price system. Under the trend of video membership price increases, what is more noteworthy is that long video platforms have chosen a way to seek quality after years of exploration, and providing core values for core members has become the real solution for long videos. The driving force of the industry has gradually shifted from the past advertisers to the user-oriented, which will further optimize the ecological logic of the video industry.
The strategy behind pricing
Whether driven by objective factors or actively chosen by the platform, it is imperative for video platform members to raise prices.
In the global price environment of water release and inflation, food and beverage industries such as Starbucks, Master Kong, and Xiangpiaopiao, and new energy automobile industries such as Tesla, BYD, and Xiaopeng... All walks of life are rising in prices, and the unit price of video memberships is naturally rising.
However, if the membership price of overseas streaming media platforms is used as a reference coordinate, the domestic pricing is still relatively low - less than one-half of the most basic price of the US platform, and even southeast Asian countries such as Vietnam and Thailand have higher video membership unit prices than domestic ones. Compared with the services of other industries, the price of video membership is even lower, and the price of a month's video membership is even worse than a cup of coffee and a cup of milk tea.
But in the opposite of the low cost of membership, the platform's high investment in content is not a new thing.
High investment, low income, and profitability are always the sword of Damocles hanging over the head of the video platform. From flood irrigation, crazy burning money, to reducing costs and increasing efficiency, reducing losses, the "awakening" long video platform has come to a crossroads: is it to choose the "traffic model" that it has originally walked? Or do you stick to the difficult and correct "quality model"?
In the "traffic model", the platform gathers users by providing products for free, and then completes the closed loop through advertising monetization. This model works well with "light content" products, because with very low content costs, profits are within reach as long as the difference between "buy" and "sell" is sufficient to cover fixed costs. But for long videos, the traffic model is not sustainable, and the simple pursuit of "quantity" can easily deform the action - piling up large IP, platter traffic artists, and the cost snowballs.
More importantly, this will make the platform lose the most direct insight into the user, and the things produced at a large cost are not necessarily the things that the users like.
After years of trial and error and chaos, the current long video platforms have invariably defined the "quality model" - user-led, the platform produces content, and members pay for their favorite content. This is also a positive cyclical model that Netflix, HBO, and the game industry have already run.
We can also see the rise of "affiliate content" from the strategic changes of video platforms in the past two years. For example, Youku proposed "don't want traffic to value" and return to content creation itself; iQiyi proposed content D2C to face user groups and preferences; Tencent Video also closely focused on members and adhered to the high-quality content strategy.
Around the core members to produce core content value, positive feedback from members also further confirms everyone's willingness to pay for good content. Taking Tencent Video as an example, benefiting from the promotion of high-quality dramas such as "Sweeping The Black Storm" and "You Are My Glory", the number of paid members of Tencent Video in the third quarter of 2021 increased by 8% year-on-year; at the beginning of the year, "Beginning" was popular, and the news that member users called for the return of "advanced on-demand" rushed to the hot search; "The Rest of Your Life, Please Advise More" starring Yang Zi and Xiao Zhan Even if it is a daily change, many fans expressed their desire to pay to unlock the full set in the bullet screen. After the announcement of the price adjustment, some users also put forward expectations for the future of the platform, believing that "a few dollars in the price increase does not matter, as long as the good content is sufficient, it is easy to say", "In fact, the price increase is normal, but the important thing is to have a good experience".
Obviously, video platforms have chosen the second path - the membership path of letting users be the protagonists. Whether it is the quality of the content provided or the creation of a member experience such as Zhencai Audiovisual, the video platform is serving members very clearly and with all its might. In this way, it not only solves the uneconomic problem of the early content positioning of the video platform and the explosion, but also further clarifies the core value of the video platform.
At present, the quality of member content on the video platform and the continuous improvement of member service quality are indeed worthy of higher returns.
A positive cycle of the future
In the catering industry, when the cost of raw materials and other costs increases, restaurants often have three practices:
First, the price increase, quality and quantity;
Second, do not increase prices, cut corners;
Third, do not increase prices, insist on hard scalping.
The second approach results in a deteriorating customer dining experience, which leads to customer losses; the third outcome is that the restaurant loses money and becomes unable to maintain operations and eventually closes down. Only the first approach is a reliable path to a new equilibrium.
The same is true of the content industry. A healthy and sustainable content ecology cannot be built on the basis of constantly sacrificing the ecological participants of a certain party, it must be that all upstream and downstream links have gained, everyone will be willing to continue to invest, and the positive cycle of content ecology can flow smoothly.
This is also the significance of member price increases for the entire industry - not only the platform benefits, but the upstream film and television production companies will also have greater motivation to produce more high-quality high-quality content.
For this price increase, some users analyzed: "iQiyi, Tencent Video and Youku have been losing money, and it is actually understandable to want to reduce losses and increase the price of members." But I feel that the focus of the turnaround is not in revenue growth, but in controlling costs. In fact, the head video platform has indeed been struggling to control costs in the past two years.
However, if the video platform chooses not to raise prices, but blindly rely on "throttling" to make a profit, just like the restaurant does not increase the price on the surface but actually cut corners, it may cause a "vicious circle": because of low income and continuous losses, the video platform can only reduce expenditure and reduce the budget for content production; when the budget is reduced, the upstream film and television production companies and content producers do not have enough funds to maintain the original content production standards, and the quality of the content produced is not up to standard; and the audience votes with their feet. If you can't see the high-quality and good content for a long time, you will choose to leave, and from then on, the industry will also be "doomed".
From this point of view, member price increases, or other business model exploration, the ultimate purpose is to hope that in the case of consumer acceptance, the market size of the industry will be enlarged, and a three-party benefit of the content is recycling ecology - the membership of video platforms, membership income rises, film and television creators rely on the production of high-quality content to obtain higher income, users get a good viewing experience.
Just this week, Tencent Video mentioned the role of members in promoting the content ecology in the "early spring business sharing meeting", indicating that in the existing cooperation model, the new "market price + member a posteriometric incentive" initiative was introduced to further incentivize high-quality content and activate upstream and downstream content production.
Member price increase is a path choice made by video platforms based on long-term doctrine, which also reflects the confidence and confidence of the current video platforms in the quality of their own content from another aspect.
Video membership is not a hammer deal, only the platform has the ability to continue to provide users with good content they like, users will continue to trust the platform and increase their willingness to pay.
Back to the other two cases we mentioned at the beginning, why apple products continue to rise in price is still in the market, why some tea brands continue to reduce prices but fail to win back the trust of consumers? Behind this is the multi-dimensional consideration of product quality, brand confidence and user satisfaction. The same is true for video membership price increases, the focus of the industry should not only be the price itself, but the video platform provides matching content value and rich and optimized viewing experience under the price.