Free is the most expensive!
Editor’s note: This article is from WeChat public account “Zhang Dongwei” (ID:dushibuluo) , author Zhang Dongwei.
Before, I once published “National VIP: Why do you want to pay membership?” How to do a paid membership system? “, caused a lot of attention and discussion. In the past month, I have done some communication with relevant industry insiders, and have done more discussion on the paid membership system, and share it with readers here.
Is Iqiyi membership the correct way to pay membership?
On August 20th, iQiyi announced the unaudited financial report for the second quarter ended June 30, 2019. The financial report shows that in the second quarter of 2019, iQiyi’s revenue reached RMB 7.1 billion, a year-on-year increase of 15%. Among them, member service income was 3.4 billion yuan, a year-on-year increase of 38%. By the end of the second quarter, its members had subscribed to more than 100 million people, and the subscription membership increased by 50% year-on-year.
It is clear from the earnings report that member subscriptions have exceeded the online advertising revenue and accounted for 48% of total revenue.
Aiqiyi also raised its membership to 100 million+ as a key publicity event, which led to the discussion of Tencent Video and Youku Tudou who will become the next billion+ club members.
And eggs.
For a long time, online advertising revenue from video sites has been an important source of revenue. In the second quarter earnings report of iQiyi, the revenue of online advertising showed RMB 2.2 billion, which not only did not see growth, but fell by 16% year-on-year.
This situation is expressed in the most direct discourse, that is, iQiyi turns the income that should have been represented by advertising into content subscription revenue. The left pocket was changed to the right pocket, and the total revenue model did not break.
With the content subscription model, can you support the future of video site models like iQiyi?
The once-smashing US MoviePass website closed its discount ticket service on September 14.
MoviePass has been hailed as an innovator in the subversion of the box office business, launching $9.95 a month, one per dayIf you are “hardworking”, you can watch 30 movies a month. This model has been used for only one year, with up to 3 million member users, subverting the monopoly of theater giant AMC in the United States and being hailed as a reformer to subvert the box office business. MoviePass founder Mitch Lowe said the number would rise to 5 million in 2019.
—— But the ending of the story is that MoviePass has not been able to spend 2019.
The reason for the failure of MoviePass is basically 3:
1, continuous content input
Content subscription members pay because they want to keep watching the latest content and watch it at the “extraordinary price”, which forces MoviePass to continue to subsidize content and continue to lose money;
2, low-cost competition in the same industry
After MoviePass’s membership growth success, AMC, the largest cinema line in the US, quickly launched its own membership subscription service, AMC Stub A-List, which allows users to watch 3 movies per week and enjoy all AMC membership services. And its cost is only $19.95 per month. Although the price is twice as expensive as MoviePass, AMC relies on its powerful information support to pre-select all movies including IMAX 3D online, and the package also includes many discount information, including free upgrades of popcorn and drinks. I have gained support from a lot of fans.
Cinemark, another large cinema line, has also launched similar products like AMC.
A fatal blow comes from another player in the movie market, Sinemia: he launched three movies with a monthly price of $14.99, two movies with a monthly price of $9.99, and no theater. , unlimited time, also includes IMAX and 3D movie types.
3, value-added sales are depressed
MoviePass’s original closed loop was to develop and target users through content losses, and then market profitable value-added services to users. For example, in the iQiyi VIP member channel, you can already see coupons for selling various e-commerce.
But the expansion of MoviePass in this field is very disappointing, and ultimately it is a sustained loss. The company’s money is spent and can only go bankrupt.
Now, replacing the character of MoviePass with iQiyi, you can probably see the same story in the future:
Member income growth, the advertising revenue is reduced;
The loss of content is reduced, and the number of member users is reduced;
Business model innovation, the peers plagiarism.
Infinite loop.
Is Ali 88 member the correct way to pay membership?
On August 8, 2018, Alibaba launched the Ali 88 member, a service worth 2,000 yuan, and sold for 88 yuan. A time of praise.
On August 8, 2019, Alibaba further upgraded the coverage of 88 members, and the number of 95% off brands increased from 88 to 388.
According to Alibaba’s propaganda, 38 of the 100 88VIP members were converted into Youku members, 32 members were hungry, 27 were Taobao members, and 88VIP users were hungry. It is also about 30% higher than the average user.
Compared with other paid members on the market, the price of 88VIP is not high, but it is the only paid member with a threshold. Only when the naughty value reaches 1000, it is eligible to join the meeting with 88 yuan; if the naughty value is less than 1000, You can use 888 yuan, or the promotional price of 288 yuan to pay the IQ tax after joining the meeting. This can also outline the user profile of 88VIP: high activity, high purchasing power, which is obviously the new middle-class people who are the favorite of the merchants.
But, but, however,
Ai, who loves to tell the story, this time on the 88VIP, I will not talk about how many copies of this membership card (sold).
The core of 88VIP is used as a “new”, which is to guide each other between users on different platforms. According to the official announcement of each of the 100 membership cards, 38 new Youku members, or 32 new hungry members, then look at the bleak Youku member data, as well as the hungry data that the US group is far suppressing, Understand the actual amount of data in this 88VIP.
How to properly design a paid membership system?
I am in “People’s VIP: Why do you have to pay membership?” How to do a paid membership system? “It has already been said that the wrong membership design will make the paid members “pull new” (such as 88VIP) or “income” (such as iQiyi).
The Prim was launched as early as 2005.Amazon, an e-membership system, has increased its tangible membership rights on the steady side, while silently accepting the pressure of cost growth brought about by membership. Amazon has only maintained two concerns for Prime members: frequency of repurchase, and renewal rates.
Overview of the domestic, the design of the paid membership system is almost limited to “price concessions” and “service priority”. In the pressure of “pull new” and “revenue-generating”, it is easy to form a “chicken rib superposition” and finally flow. In the form.
The core design essence of the paid membership system is that always pay attention to the user and what kind of scene pain points have not been met for the time being, and form a community of interests with the members through the membership system, and then jointly develop solutions.
The whole design thinking, product design, and service project origin should be based on always paying attention to whether the user experience can be better.
The principle of membership pricing is: What money is not what the customer wants to pay, in order to help customers save this expense, so mobilize customers to pay in advance, in exchange for more lasting free.
—Free is the most expensive, isn’t it?
The header image is from pexels