Image source @ Visual China
Text | A little finance, the author | Lin Shourong, Editor | Yan Rui
"This is being forced to be anxious, to kill the short video."
"A good anti-piracy issue has caused the old and new forces to tear each other apart."
……
Since the beginning of April, a number of video platforms, film and television associations and film and television companies have jointly issued a declaration of infringement of short video platforms, and the "dispute between length and shortness" has been fermenting and escalating.
At the 9th China Online Audiovisual Conference in early June, the concentrated crusade of long-form video platforms iQiyi, Youku and Tencent Video on short video platforms once again triggered a tsunami of user response.
The public opinion field is full of wars, and the capital market is also full of wolf smoke. The survival anxiety of long video platforms is more and more bluntly presented to the public. As of June 15, iQIYI's market value was US$11.713 billion, and the market value of Station B was US$42.706 billion, equivalent to 3.6 iQiyi.
"In order of market capitalization, Station B is currently a 'big brother', and the market value is 30% off the sum of Aiyouteng's 'difficult brothers and difficult brothers'." Fan Lu, president of Alibaba Entertainment and president of Youku, said.
You savor, Youku's president's remarks in public, is there any anxiety full of overflow? From the absolute lead of scenery to today's "difficult brothers and difficult brothers", what Aiyouteng needs to solve is actually the problem of how to survive.
<h2>Users become "short"</h2>
In this era of information explosion, the pace of user life is accelerating, the timeliness of information is becoming more and more demanding, and the way to obtain information and content is more fragmented, which has also contributed to the rapid rise of short and medium-sized short videos in the short term.
According to QuestMobile's January 2019 data, iQIYI's 123 million daily active users ranked first in the online video industry; while in June 2018, Douyin's official disclosure of daily active users had reached 150 million; iQiyi spent nearly 9 years to achieve the goal, and Douyin only took more than 1 year.
At the end of 2020, the number of short video users has reached 873 million, an increase of nearly 47% from 594 million in June 2018, and the usage rate has continued to rise by nearly 90%.
Image source: China Online Audiovisual Program Service Association "2021 China Online Audiovisual Development Research Report"
As a digital native, Generation Z is the most sensitive and typical generation of Internet behavior changes, and they are also tilting from long videos to medium and short videos. Quest Mobile's 2020 Generation Z Insight Report shows that Gen Z users spend an average of 35.1 hours of short video per month, far exceeding the 17.4 hours of online video.
Image source: QuestMobile's 2020 Generation Z Insight Report
Interestingly, in terms of user habits, "double speed playback" has become a "standard tool" for users to watch long videos, and the 2021 China Network Audiovisual Development Research Report mentions that 28.2% of online video users do not watch video programs at the original speed. Users are more inclined to fragmented video content.
Especially for the post-00s group, nearly 40% choose to watch at a double speed. Male users use double speed viewing mainly to improve viewing efficiency, and female users are more because of protracted plots or bridge sections. Users' requirements for information acquisition efficiency are constantly improving, but the uneven quality of long video content and the increasingly serious water injection situation are also an important reason for users to fall to medium and short video platforms.
The more low-level reason is the difference in business logic between long video and medium and short video platforms.
There are two mainstream business models for long video platforms: C-end content payment + B-side advertising. Under the free soil of China, either pay or watch dozens of seconds, hundreds of seconds of patch ads, this model has greatly raised the user's use threshold, but also reduced the user experience;
The business model of short and medium-length video is to obtain user attention through free content without patch advertising, and then continue to extend to the fields of live broadcast rewards, e-commerce, local life, etc., seizing the dividends of the attention economy. No ads, no payment, users will have lower costs when they get content on short and medium-sized video platforms.
Users become "short", not only today, in the era of graphics this change has promoted Weibo to replace blogs, and now, this change has made long video platforms subject to the "saturation attack" of medium and short video platforms.
<h2>Love Youteng's internal worries</h2>
"We probably calculated that in addition to the platform where long videos are broadcast, the total length of segmented pirated short videos and the length of long videos are basically the same magnitude, but the cost may be 10 times or even 20 times different."
Gong Yu, founder and CEO of iQIYI, called the "two creations" of long video content on the short and medium video platform "soft piracy", which is indeed a certain reason, the long video platform invests a lot of money, but the money is earned by the short and medium video platform.
But the more important thing to think about is that long videos don't make money in the first place. Even without short and medium videos, the days of long video platforms are not good.
Tencent Sun Zhonghuai said bluntly: "Long video is very difficult now, when will our three companies (iQiyi, Tencent Video, Youku) be profitable?" If you look at the current living environment, 'just around the corner' is wishful thinking, too difficult. ”
The reason for the long-term inability to make a profit is simple: the cost is too high, the return is too low, the gold lord is less, and the user runs away.
The high content cost of long video platforms has long been criticized, which is the most important reason why the three major platforms have not been profitable for a long time.
Long video platforms attract users to pay through high-quality exclusive content, and this pull effect is very obvious at the beginning of the industry's full legalization stage.
After the stabilization of the three-legged pattern, the three platforms of Aiyouteng quickly entered a stage of spending money to grab content, in 2016 Tencent Video spent 810 million yuan to buy out the network premiere rights of "Ruyi Chuan", the series was premiered in August 2018 less than half an hour after the broadcast exceeded 100 million, Tencent's 2019 Q3 financial report showed that tencent video paid members reached 82 million, an increase of 79% year-on-year.
The disadvantages of snatching exclusive copyrights and rapidly raising the price of copyrights began to show bad consequences after the market entered the stock competition.
According to caitong securities price information statistics on popular dramas in 2019, the price of the single episode of some popular TV series has been around 10 million, and this price was only 1.5 million in 2015. The ceiling of content copyright prices is being pulled higher and higher.
Image source: Caitong Securities "Online Long Video Industry In-depth Report"
Long-form video companies also see the negative effects of the increasingly expensive copyright price, so they are seen as a self-made model for industry solutions, but the cost of this model is actually not low.
According to the "Late Post" report, an employee in charge of iQIYI's copyright business said, "iQIYI's large number of dramas are dismal, in fact, the cost is at the level of 100 million, but the top management feels that there is no big problem" and "in their eyes, as long as the quality of the drama is up to standard".
In addition to the high price of content, the immature production process of the industry itself is also an important reason for the rise in content costs. Gong Yu also proposed that the production environment of the online film and television industry is relatively extensive, and the production mechanism, production process and technical standards have not yet been unified, resulting in the loss and loss of content quality layer by layer, hindering the production efficiency and quality development of film and television content.
In the industry, the phenomenon of traffic theory, sky-high film remuneration, flooding of stand-ins, and prevalence of cutouts has emerged in an endless stream, and a large number of shoddy content has been resisted by users, which has greatly reduced the return rate of content costs.
While the cost of content is getting higher and higher, the business model of Aiyouteng is also being tested.
In terms of user payment, but no matter how high-quality content is, the payment that can be pulled is also limited. In the field of long video, the user's loyalty to the platform is not high, and when a blockbuster drama ends, the user may immediately migrate to another platform to watch other blockbuster dramas, and the paid behavior will also end.
The positive cycle of the payment model has not been formed for a long time, and Aiyouteng has to find another way. In order to increase the unit price of customers, the long video platform has launched advanced on-demand models around payment derivation, and there is a dispute over repeated charges, which has also brought greater regulatory pressure to the industry.
On June 2, 2020, the Beijing Internet Court pronounced a judgment on the "iQiyi "Qing Yu Nian" Advanced On-Demand Case". The judgment said that in this case, "iQIYI constituted a breach of contract and should bear the liability for breach of contract." ”
According to the judgment of the China Judgment Documents Network, the court of first instance held that the video platform "should explore new business models, which is inappropriate, but it should follow commercial rules, respect user feelings, must not violate the provisions of the law, and must not harm the rights of users in accordance with the law or agreement." ”
Despite the controversy over the advanced on-demand model, no platform has abandoned this model so far due to the huge pressure of loss.
The pitching mechanism of Aiyouteng for the talent show has also been questioned as inducing fans to repeat Krypton gold. The most direct case is this year's "Youth with You 3" "pour milk incident", fans need to buy some of the program sponsors' dairy products to vote, the more you buy to vote, in previous years there was a similar mechanism, but this year the milk merchants will vote the two-dimensional code printed in the bottle cap, fans must open the cap to vote, a large number of dairy products that can not be consumed by opening the lid are directly dumped.
After the fermentation of the incident, a number of official media such as People's Daily, Xinhua News Agency, and CCTV Network criticized it, which also caused the suspension of recording of "iQiyi Youth with You". In the future, the pressure on self-made talent shows on long video platforms will only be greater, and advertising revenue will inevitably be negatively affected.
Image source: "iQIYI Youth Has You" official Weibo
In the exploration of business models, Tencent Video may have more possibilities to break the game.
In April this year, Tencent PCG (Platform and Content Business Group) adjusted its organizational structure, and Tencent Video, Weishi and App Treasure integrated three major businesses to form "Online Video BU" to coordinate internal resources to achieve better integration and development of long, medium and short videos.
Tencent Video focuses on the long content of PGC, And WeTV assists in short video content, coupled with the traffic entrance of the two major national applications of QQ and WeChat, leaving users in Tencent's ecology will help better tap the potential of user payment.
This is Tencent's ecological advantage, compared to iQiyi, which is backed by Baidu, is not so lucky. "Good-looking video" is Baidu's flagship short video brand, but it is more in a state of separation with iQiyi.
Compared with the long-term inability to break through the business model, what is more realistic is that there are too many gold fathers on the current video platform, and the short and medium video has diverted the advertising revenue of the long video platform.
According to the prospective research institute's analysis of the market status and development prospects of China's short video marketing industry in 2021, the revenue generated by advertising on China's short video platform increased from 800 million yuan in 2016 to 80 billion yuan in 2019, with an average annual compound growth rate of 364%.
The ferocious growth of short videos has resulted in fewer and fewer users of long video platforms, and the fathers of the gold lords have also voted with their feet. At this point, the anxiety of long video companies has been exacerbated.
<h2>The chinese version of Netflix's pseudo-proposition</h2>
Long video platforms, whose favorite target is "Netflix", are all boasting that they will become China's version of Netflix.
In 2018, Gong Yu said at the media communication meeting before the IPO that iQiyi wanted to do the "Netflix Plus" model. Today, iQiyi is worth $11.7 billion, and Netflix is $218.1 billion. Long video has been developed for more than ten years, but the "Chinese version of Netflix" has never appeared.
The gap between domestic long video companies and Netflix is not only the market value level, Netflix's content production system and differentiated payment system have been relatively mature, while the domestic long video platform is quite a big gap.
In terms of content, Netflix's quality content production level is stable, and the content of movies and dramas continues to be recognized by Oscars and Emmy Awards. At the 92nd Oscars in 2020, Netflix received 24 nominations for films such as "The Irishman", "Marriage Story", and "The Succession of the Pope", becoming the first emerging company in oscar history to surpass traditional Hollywood film companies and lead the way; in 2020, the Emmy nominations were released, and Netflix broke the record of a single TV network in the history of a single Emmy nomination with 160 nominations, surpassing HBO.
The explosion of the domestic long video platform is more like "betting", the explosion is all about "life", and one by one the explosions are short-lived. The lack of stable high-quality content output leads to users circulating back and forth between platforms, and the increment is difficult to generate and the stock cannot be retained.
After the release of the 2021 Q1 financial report, Gong Yu said in a letter to shareholders that the squeeze on user time by short videos and other diversified entertainment methods is an important reason. But in fact, the root cause of the squeeze on long videos by other forms is still the extreme lack of quality content.
In terms of content type, Netflix focuses on the frequent word-of-mouth explosions in the field of TV series and movies, while the domestic long video platform shows obvious homogeneous characteristics.
A platform to do trainee talent shows, everyone began to pile up to do the same model of talent shows; iQiyi launched the "Mist Theater" main suspense network drama, Youku also launched the "Suspense Theater" to keep up. The final result is that each platform does not have a distinct label and a long board that is different from other platforms, users follow the content, and the platform becomes a "player".
In terms of business model, based on the mature content payment environment in the United States, Netflix pioneered the paid subscription model for long videos, and gradually established a flexible and differentiated payment system, Netflix only provides three different pricing for members according to the clarity of content and the number of screens that can be viewed at the same time.
Although Netflix has also raised prices 3-5 times for multi-file members due to the growth of content costs, with the continuous output of high-quality content and the continuous upgrading of user experience, paid users after member price increases have not shown the same downward trend as iQiyi, but have grown all the way.
For domestic long-form video platforms, users are accustomed to free content, and in November 2020, iQiyi members officially increased prices, which directly led to an accelerated decline in paid users in Q4 2020. In Q3\Q4 2020 and Q1 2021, the number of paid users of iQIYI was 104.8 million, 101.7 million and 105.3 million, respectively, with a year-on-year growth rate of -0.95%, -4.95% and -11.50%, respectively.
Data source: Netflix, iQiyi earnings report
Although the concept of content payment continues to be accepted by more users, the payment rate of long videos has been hovering around 20% for a long time, and the growth has been slowing down, and it is difficult to see the strong driving force for users' willingness to pay in the short term.
To make matters worse, the number of monthly active users of IYoteng is also declining, and the space to promote the conversion of monthly active users to paying users is smaller.
Image source: Trustdata Big Data "2020 China Mobile Internet Industry Development Analysis Report"
<h2>epilogue</h2>
In the field of long video, Aiyouteng has a full decade of first-mover advantage, but it still has not built a strong enough barrier, has not solved the problem of profitability, and now even users can not be retained.
The development of the video industry to today, the integration of long and short videos is a major trend, when more powerful competitors appear, the industry's solution to the answer, is not necessarily given by Aiyouteng.