Source: Digital Science Society
New users, please listen to the question.
If you want to catch up with the recent hit "Sword and Fairy IV" on iQIYI, how many steps are there in total?The first step is to open the iQIYI website or APP;The second step is to watch the 60-120 seconds of advertising first;The third step is to adjust to the highest image quality quasi-HD 720P enjoyed by non-members,Start a long drama chasing experience that lags behind the progress of one episode of members every day。
If you can't stand a two-minute ad, then go the extra mile and consider opening a membership. If you are no longer satisfied with the visual enjoyment brought by your mobile phone, tablet or computer, and want to use your mobile phone to cast the screen or watch 1080P directly on the TV, then you need to take another step and upgrade the gold VIP to platinum VIP or star diamond VIP.
It's not a brain teaser, but it's a big problem, especially for those who are keen to follow the show, and it seems that the standard answer will never seem to be guessed.
When you racked your brains, gritted your teeth, and finally eliminated all difficulties on the road to membership, and sat down to follow the drama with peace of mind, you found that the magic plot of "Sword and Fairy IV" wiped out the last trace of hope in your heart to revisit the classics and youth. Congratulations on coming to the final step: exiting the website or uninstalling the app.
The big IP Xianxia drama "Sword and Fairy IV", adapted from the classic stand-alone game "The Legend of Sword and Fairy IV", has been broadcast for more than a week, which may be the mental journey experienced by many fans of the drama and the game.
Since its official launch on January 17, "Sword and Fairy IV" has been controversial due to issues such as the plot, production level, and acting skills of the actors, and many netizens have shouted: Where did the 300 million be spent?
As the "bettor" behind it, although the collapse of the reputation of "Sword and Fairy IV" may make this investment go down the drain, in the past year, iQiyi can still be called fame and fortune, from a "loser" who spends money all day long to a businessman who seriously "makes money".
However, the frustration of "betting" and the abandonment of member users also seem to remind it at all times: on the track of long video, there is no turning back from the creation of explosive models and the harvesting of members.
01 failed to continue to write Hurricane
"The special effects are as fierce as a tiger, and the actors are pestle on the spot. ”
On Douban, a netizen left a two-star comment on the day of the launch of "Sword and Fairy IV", and so far more than 3,100 people have said that it is "useful". In the evaluation system with a full score of five stars, two stars represents a failure, and it is not without merit, just like the current reputation of "Sword and Fairy IV" that is seriously polarized and has mostly negative reviews.
As a sequel to the classic IP of the Sword and Fairy series, Shanghai New Culture Media, the production company behind "Sword and Fairy IV", has been authorized by the game producer as early as 2016 and passed the record, and the preliminary preparation stage of the project has received widespread attention. In the "want to see" comment area of Douban's "Sword and Fairy IV", many netizens have been looking forward to it for too long, and a comment published in December 2016 wrote: Stop playing Tianhe as a hooligan!
In June 2020, New Culture signed an agreement with iQiyi to produce the TV series "Sword and Fairy IV" at a total cost of 312 million yuan, which allowed netizens to finally see the dawn of start-up.
As a producer, New Culture is not unknown, and in 2017, it attracted market attention for signing a gambling agreement with the well-known Hong Kong movie star Stephen Chow. During the period of deep binding with Stephen Chow, many film and television dramas of New Culture have no shortage of Stephen Chow's IP.
As a partner, it is not the first time that New Culture and iQiyi have shaken hands, the two sides signed a five-year strategic cooperation agreement in 2015, and the latter signed an exclusive investment agreement for the online drama "Journey to the West" and the TV series "Mermaid" in 2017, with a total investment of more than 700 million yuan.
But at the same time as signing the new contract of "Sword and Fairy IV", he also signed a termination letter for the cooperation between the two dramas.
In February 2022, "Sword and Fairy IV", which carries the commercial and investment value of both parties, was officially launched in Hengdian, Zhejiang, and after 6 years of preparation, the filming was successfully completed in only 4 months. This year, someone left a message on Douban: "When I saw that it was finished, I came to set up a flag, but anyone who watched an episode was disrespectful to Xianyi Xiansan, and used the IP of Xianjian to shout traffic to play the popularity, and the capital is really disgusting." ”
A year and a half later, "Sword and Fairy IV" landed on iQiyi, and the episode had not yet been launched on the first day of broadcasting, and the two leading actors first tore each other on the hot search because of their positions. I don't know if Yun Tianhe on the screen today meets the expectations of the netizen back then, but for many fans who were persuaded to quit after watching the first episode, the two-star rating has given "Sword and Fairy IV" enough decency.
In the eyes of iQiyi, which has invested 300 million real money, the market performance of "Sword and Fairy IV" is still difficult to pass.
Not long ago, the phenomenal drama "Hurricane" produced by iQiyi has just been ranked seventh with a Douban score of 8.5 points in 2023, when high-scoring domestic dramas are gathered.
Compared with the rave reviews after the broadcast of "Hurricane" in January 2023, "Sword and Fairy IV" obviously failed to let iQiyi continue to soar in the new year.
02 Start to "make money" seriously
With a "Hurricane", iQiyi can be said to have earned both the limelight and a lot of money in 2023.
In the 2023 list of effective playback of dramas on the whole network recently released by Yunhe Data, "Hurricane" has become a well-deserved "drama king" in 2023 with an effective playback of 10.79 billion feature films. The phenomenal explosive momentum has brought huge traffic growth to iQIYI.
According to the data of the "2023 China Mobile Internet Spring Report" released by QuestMobile, during the broadcast of "Hurricane", iYiqi gained an average of 7.68 million incremental users per day and 432 million platform traffic. During the hit broadcast of "Hurricane", iQiyi's active users reached 64.4%, 32.5% of active users, and 3% of pure new users, and even woke up more middle-aged and elderly silent users for the platform.
In the first quarter of this year, iQIYI's average daily subscribers in a single quarter once peaked at 128.9 million, compared with 111.6 million in the fourth quarter of 2022, with a net increase of more than 17 million in a single quarter. iQIYI's revenue in the first quarter of 2023 was 8.3 billion yuan, a year-on-year increase of 15%, with a net profit of 618.1 million yuan and a non-GAAP net profit of 935 million yuan, and its non-GAAP net profit for the whole year of 2022 was only 1.3 billion yuan.
However, the strong performance failed to sustain the surge. Although iQIYI quickly delivered the best second quarter report in history, achieving the fastest growth in revenue and net profit attributable to the parent company of 17% year-on-year and 270% year-on-year respectively, compared with the first quarter, indicators including revenue, net profit attributable to the parent company, and average daily subscribers have declined quarter-on-quarter.
In the third quarter of 2023, iQIYI's average daily subscribers in a single quarter fell all the way back to 107.5 million, revenue stalled to a year-on-year increase of 7% to 8 billion yuan, net profit attributable to the parent company was 476 million yuan, and non-GAAP net profit was 895 million yuan. Although this three-quarter report is slightly weak, it is iQIYI's third consecutive quarter of profitability in 2023.
At the beginning of this year, Gong Yu, founder, director and CEO of iQIYI, said in a letter to investors: "iQIYI's strategic goal is to 'reduce costs and increase efficiency, open sources and reduce expenditure, and achieve breakeven at the operational level', and clearly change the strategy from 'market share first' to 'profit first'.
2022 is the beginning of iQIYI's transformation. According to past media reports, since the end of 2021, iQIYI has successively launched multiple waves of layoffs, and some laid off employees said that they have experienced the largest round of layoffs in iQIYI's history, and almost all employees in some departments have been laid off.
According to public information, iQIYI has successively eliminated a number of business departments such as iQIYI and iQIYI Game Center, and the number of employees has dropped from 7,721 as shown in the 2020 financial report to less than 5,000 by the end of 2022.
In addition, it also controls costs by reducing content purchases and increasing the proportion of self-produced dramas. In the third quarter of 2023, original dramas account for more than 60% of iQIYI's new key dramas. In 2022, the cost of revenue will be 22.3 billion yuan, a year-on-year decrease of 19%, the content cost will be 16.5 billion yuan, a year-on-year decrease of 20%, and the publicity, marketing, management cost and R&D cost will decrease by 27% and 32% respectively.
While reducing costs and "slimming down", iQIYI has also taken a step to increase membership fees to generate income. As the pillar of revenue, membership services support half of iQIYI's total revenue. From 2020 to 2022, the price of iQIYI membership has increased year after year, and the price of gold VIP members' continuous monthly subscription has increased from 15 yuan per month to 19 yuan per month, 22 yuan per month and then to 25 yuan per month.
In the third quarter of 2023, with the average daily subscription membership in a single quarter declining significantly, iQIYI's ARM (monthly average single member revenue) hit a record high, reaching 15.54 yuan. iQIYI has changed from a "loser" who spends money all day long to a businessman who seriously "makes money".
03 Eating is destined to be ugly
In the past two years, "profitability" seems to have become a capability that many long-form video platforms want to prove urgently, even the overseas streaming giant Netflix (Netflix) is no exception - in early 2023, Netflix has shifted its strategic focus from focusing on the number of users to focusing on profitability and sustainability, which has attracted widespread attention in the market.
Looking back at China, under the onslaught of short videos, iQiyi, Tencent Video and Youku Video (hereinafter referred to as "Aitengyou"), the three leading players, have announced a price increase for members after a total of more than 100 billion yuan in the past ten years. Now only Youku has no profit signal.
Under the user-centric valuation logic of the Internet era, when the top players of a track no longer put user growth in the first place, it often means that the growth dividend of the track has disappeared, and the next thing to face is a market that tends to be saturated.
It is not difficult to understand the closed loop of commercialization of long video platforms: by continuously launching high-quality content to attract users, and then monetizing them through subscription members, online advertising, etc. The difficulty is how the platform can ensure the continuous output of high-quality content and whether it can cover the cost of content that is not recognized by users, which is also the crux of Aitengyou's loss for many years.
The pressure of the growth dividend to subside is approaching, and many players are increasingly focusing on the "bet" of popular content.
According to the data of Lighthouse Professional Edition, the number of effective dramas in the webcast drama market in 2023 will be 294, although the number will decrease by 10.6% compared with 2022, but the ratings will increase significantly, and the total broadcast index will reach 38.612 million, an increase of 7.7% against the trend.
In the TOP30 statistics of the effective number of feature films played by Yunhe Data, iQiyi has 8 solo dramas on the market, ranking first on the list, Tencent Video, which occupies the second place, has 6 exclusive online dramas on the list, and Youku Video follows with 5 solo dramas.
In "A Letter to Investors", Gong Yu once said that he has realized the transformation from "iQiyi can create explosive models" to "iQiyi is a popular manufacturing camp".
However, judging from the other popular works of "Changfeng Crossing", "Lotus Tower", and "Ning An Like a Dream" launched by iQiyi in 2023, there is still an obvious gap in popularity with the truly popular "Hurricane". In the second and third quarters, dramas such as "Changfeng Crossing", "Lotus Building", "Seven O'clock Auspicious", "Cloud Feather" and other dramas have not been able to recover the loss of iQiyi members.
This also means that iQIYI's current continuous explosive manufacturing capacity is not enough for it to truly break through the bottleneck of the membership ceiling.
Paying for high-quality content is the logic of the audience's identification, and making money with high-quality content is a problem that the platform always has to face. With a clear profit target, in addition to increasing membership fees year after year, Aitengyou has also spent its attention on membership rights and value-added services.
Following the controversy over "Harvest Members" caused by "Advanced On-Demand", the three major platforms issued a statement on the same day in October 2021 to cancel Advanced On-Demand. However, in 2023, it will be reborn and returned in the form of "finale screening ceremony", under the banner of "limited favorite fans", allowing users to spend 18 yuan to unlock the six episodes of the finale in advance.
After the screening ceremony, there are a series of related closing celebration live broadcasts and offline concerts waiting for fans, what VIP and non-VIP have in common is that they have to pay for admission, and the difference is that the time of payment is different sooner or later.
At the beginning of 2023, while iQIYI "harvested" traffic through "Hurricane", it was once again pushed to the forefront of public opinion because of the accusation of "harvesting members". Many netizens reported that the previous gold VIP members supported the highest 4K definition projection, but it became that they could only choose the definition of 480P, and then quickly caused complaints and dissatisfaction from many users.
After the incident fermented, iQiyi announced through its official account on February 20 that it would resume the projection service of gold VIP members720P and 1080P.
Recently, an iQiyi member user posted on social media that he is also a golden VIP, and he also casts "The Three Teams", but he can only cast 480P. Someone dug out the announcement of the adjustment of membership rights and interests at that time for him and found that only accounts that were subscribed before February 20 or subscribed in the follow-up can continue to use the 720P and 1080P projection services.
This netizen, who felt a big head for a while, finally chose to skip directly to the last step.