In today's headline novel channel, if you want to read a two-thousand-word novel in one chapter, you need to pay about four cents; in the meter, read for free, at the cost of at least four ads.
The Qutoutiao team, which has been monetizing customers-retention-advertising and running fast for two years, is applying the advertising model it is best at to the field of online text reading. Since it was launched in the app store in July this year, the rice reading hatched by Qutoutiao has been in a state of rapid growth in the dark. Until its DAU exceeded 5 million, Qutoutiao finally felt that it was time to be able to go to the outside world.
"In the future, we hope to become a pan-entertainment content platform, such as information, videos, novels, paragraphs, comics, and audio." Tan Siliang, the founder of Qutoutiao, once described his idea of Qutoutiao, and the same idea was not contrary to Zhang Yiming. Information for these two companies is only the easiest medium to cut to the crowd, a gripper to find the user base.
The difference is that whether it is a novel, a paragraph, or a video or a comic, you can find corresponding products in the ByteDance system with a valuation of $75 billion. In video alone, ByteDance has three models: vibrato, volcano, and watermelon, and its tentacles are still extending to other fields such as finance and education. For the interesting headlines that have encountered stock market shocks since they were listed in the second half of the year, there is not much room for layout. In the past year, Qutoutiao's DAUs have risen from 10 million to 32 million, and the primary goal in 2019 is to reach 50 million DAUs. But as Tan Siliang, the founder of Qutoutiao, said before, DAU below 50 million is still a small company, and there must be a sense of crisis.
What Qutoutiao needs to do is to concentrate resources and dig up the next cash cow.
<h3>Free or paid? </h3>
Somewhat surprisingly, the incentive system that brings both benefits and controversy to Qutoutiao is not used in rice reading.
"We found that incentives are effective, which doesn't mean that we still use incentives to do the next market." The way we find disruption in this area of web text is free. Qutoutiao CFO Wang Jingbo said.
After nearly two decades of struggle in the vortex of piracy and free, with the maturity of the mobile payment environment, the online text platform has finally struggled until the dawn of payment. Reading articles and palm reading can be listed, which has a great relationship with the payment model that finally passes.
"At least I personally think that free is still debatable, is this a step backwards for content consumption?" Fan Shaoqing, general manager of NetEase Literature and Comics Division, had such a question when discussing with 36Kr whether to pay for free or paid. Whether it is the traditional calculation by chapter, by book, or later by the popular reading time (number of days) to calculate, NetEase, reading articles, including today's headline novel channel, most of the reading apps use a paid model.
The readers have struggled to win the time, but the new entrants to the online text have turned back to using the free + advertising model to attack the city and plunder the land. The two most typical of them are Rice Reading and Lian Shang Literature, which is incubated by Lian Shang Network. The latter is backed by a wifi master key, a tool-based application with a monthly active population of up to 350 million. Before the concept of a sinking crowd was proposed, the wifi master key was already the hidden champion in this market.
"Only by using free can we fully activate users in third-, fourth- and fifth-tier cities and the vast number of townships and rural areas." Wang Xiaoshu, CEO of Lianshang Literature, once said in an interview. Recently, Lian Shang Literature announced that it has completed the A round of investment, with a valuation of 1 billion US dollars, and the leading investor is Hopu Fund. Wang Xiaoshu's definition of the user base is very similar to the sinking concept emphasized at the beginning of the rise of Qutoutiao. But according to Wang Jingbo's description, mi-read's user base is slightly different from Qutoutiao's, "It is a full-scale product." Nearly half of the users are in first- and second-tier cities, not only middle-aged women, but also many young people. ”
When information is free to watch, watching an hour of news subsidies of two cents is an effective way to attract sinking users; when you need to pay for novel reading, free is already a kind of welfare and subsidy, even if those novel authors you probably have not heard of.
From the PC era, the development of online literature for nearly twenty years, the overbearing president, Xiu Xian Shuangwen, the house fighting palace fight, urban fantasy, like a genre film to form a variety of fixed categories, in the upstream has been a very large group of creators. And compared with the long-term video dramas and variety shows that burn money, if you are not obsessed with pursuing the big god authors at the top of the pyramid, the content procurement cost of online literature is not high.
QQ reading, rice reading novel, Lian Shang reading, palm reading DAU comparison, data source: Analysys Qianfan
According to the 42nd Statistical Report on the Development of China's Internet Network released by CNNIC, as of June 2018, the number of users of online literature was 400 million, and the penetration rate was 50.6%. Compared with online news with a penetration rate of 82.7% and online video with a penetration rate of 76.2%, the market share of online literature is far from enough.
What follows free is the user who is less sensitive and valued to the product experience. It is likely that they have just started using their first smartphone, except for WeChat, they have just started to download the first information software, the first reading software. Although there is an advertisement every three pages turned, the reading is actually constantly interrupted, and the average user time of the meter reading can still be up to two hours.
<h3>The sinking of Detective, Ctrip, Alipay and Fauvism</h3>
Whether it's Mi-Trad or QuTou-Tiao, the mode is to find the originally overlooked users and show them as many ads as possible. This is related to the background of the team - Tan Siliang, founder of Qutoutiao, and CEO Li Lei are both from Shanda backgrounds, and what they are best at is performance advertising and programmatic purchase.
But the list of advertisers trying to serve this group of people can be a surprise to you. The advertisers in today's headlines and Qutoutiao are games, adult education, and local home improvement expos. In The Rice Reading, you see Huabei, JD.com, Tantan, Ctrip, and the Brutalists positioned as an art life brand with a unit price that is not low.
The sinking crowd has never been so "valuable" as it is now.
"If it's Sina or Toutiao, a lot of advertisers may be new apps, but I have a lot of old apps here, because old apps need to look for more increments." Wang Jingbo said. One proof is that, including e-commerce, Alipay and other businesses, Ali is currently one of Qutoutiao's TOP customers. "Alipay also costs dozens of yuan to pull new here, I don't think it's cheap, he thinks it's super cheap."
This aspect is based on the difference in the way of interaction in the PC era and the mobile era. On the browser page of the PC, you can read a chapter of the novel in one page, and the advertising space that can be displayed may be three or four. However, on mobile phones, the screen and font size are limited, and users who want to read a chapter of the novel may need to flip through thirty or forty screens, which gives the platform the opportunity to constantly insert advertisements.
Advertisers in the mobile era, on the other hand, are also more generous than in the PC era. The era of smart phones is also the era of e-commerce outbreak, and e-commerce has become the most important advertiser, which is true for tv, mobile networks, outdoor advertising and other channels.
Find the person who has not used flowers, explored, traveled, and purchased online, first occupy their mobile phone memory, and then occupy their wallet or time - in Internet parlance, first "wash" the user. In the sinking market where there is no elevator advertisement, TV channels are becoming more and more vulnerable, and channels have become a scarce resource.
In the rice reading, another advertiser that cannot be ignored is today's headline express edition, which appears even more frequently than e-commerce. The competition for the sinking crowd is far from ending because of the surprise listing of Qutoutiao, but has reached the white-hot stage of advertising on the other side's position.
In the App Store free list, today's headline express edition has been in the top three of the free list and the first in the news list for a month, which means that they are still increasing their investment. Qutoutiao's ranking on the iOS free list fluctuates between 5th and 15th, but in the news category, it always grabs the headlines with the second place.
Compared with ios, the Android market with a larger market share is the direction of today's headlines, such as the express version and the fun headlines. Contrary to WeChat's large version updates, which often start with ios, the version iteration of Qutoutiao and today's headlines is usually later than that of the Android market.
Qutoutiao and today's headlines express edition are continuing to increase the amount of buy traffic. According to Qutoutiao's latest financial report, qutoutiao's sales and marketing expenses in Q3 2018 were as high as 1.045 billion yuan, compared with only 138 million yuan in the same period last year, and the high investment also further expanded the loss of this listed company. Although today's headline express edition has never disclosed the investment in traffic procurement, it can be speculated that the cost of buying volume continues to increase based on its application market ranking and the frequency of advertising bounces on other apps.
<h3>Enclosure movement of sinking flow</h3>
Pulling people is still the most effective way for these apps to grow in the sinking market, but the dividend period of growing to the first 1 million DAUs by natural fission is obviously over, and they need to "wash" the incentive-sensitive people by purchasing traffic in app stores, landlords and other mini-games. Then through the scale advantage, the advertising value of these people is sold.
One end is to compress the cost of traffic procurement, the other end is to improve the efficiency of advertising sales, the key to this account is that the middle can circle enough users, so that advertisers in the same company's product matrix, there are enough placement positions to consume.
Similar to the strategies of Ali, Tencent, and Today's Headlines, Qutoutiao is also implementing a middle-office strategy. There are not many people in the specific business line, and the middle office includes technology, algorithms, research and development, testing, traffic procurement, including advertising programmatic platforms, etc., to support different front desks. In terms of specific business, there are three to five projects in the incubation at any time, and the three links of pulling new, retaining and realizing will be released at any time. At present, in the product matrix of Qutoutiao, in addition to rice reading, there are also short video App Fun Multi-shot. Mi's team currently numbers in fifty or sixty people, and the team of FunDuopai is even smaller.
In terms of content tone, Kidta shoots are more like the early Kuaishou, and you can see a variety of street strips on it. But unlike Kuaishou or other short video apps, in Quduo, the entrance for users to shoot small videos is hidden deeply, and you need to enter "my" - "my work" - post the video.
Most short video apps on the market have set up shooting entrances in the middle of the first screen. On quduo shooting, the middle position is the "task" button, click into it can be seen, the task mixed with the incentive system of Qutoutiao and the original live answer to divide the bonus pool of the game, pulling new people and watching videos can accumulate contribution value. In other words, Quduopai puts incentive pulling in a more important position than the production of UGC content, which results in users being able to see far less rich content than Kuaishou, Douyin and some similar products.
Mi read the road through, fun to shoot is still groping. The short video track is fierce, and the probability of another dark horse is already very low. Not only are douyin and kuaishou competing for each other, Tencent has launched a number of short video products, and even iQiyi, B-zhan, and NetEase have their own layouts. Quduopai is obviously still a product in debugging, according to the data of Analysys Qianfan, quduopai's MAU is about 1.7 million, and it has not run through the three links of pulling new, retaining and monetizing, so it has not yet begun to increase.
Qu Toutiao first bet on the rice reading. The team, which has been online for less than half a year, plans to double the DAU in the next six months and squeeze into the first camp in the field of online literature.
That's the speed of recreating a fun headline.
But first, it has to surpass the top QQ reading and palm reading apps, and their DAUs are also growing. Will free once again be a weapon for the sinking of the Fun Headline Matrix?