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Core points

What challenges does the video platform explore in the sinking market and what are its strategies?

What kind of environment will domestic players face when opening up overseas markets?

What are the characteristics of iQiYi’s front strategy?

In the era of general lack of imagination, the pre-strategies of business layout test the cognition especially.

A few years ago, frontline content platforms such as HBO misjudged the situation and gave Netflix a chance to emerge. Now that I’m awakened, HBO Max, HBO Go, HBO Now, Disney +, Apple + have taken turns, but it is still unknown whether they can grab food from Netflix.

In the country where the mobile Internet is developing faster, although people no longer have any doubts about the powerful power of online video, there is still a need to continue thinking about where the future of online video is-

Iqiyi and Astro entered the Malaysian market, Tencent Video pushed We TV into Thailand and Taiwan, and going overseas became a clear second curve.

And this growth curve is buried in sinking markets. With more free time and more free consumption, the new-line crowd has become a gold mining area where video websites, e-commerce, and even the entire mobile Internet flock to.

So, “going out to sea” and “sinking” together form the pre-layout of the new Internet volume represented by iQiyi.

Sinking members

Members need to plan ahead.

Although the financial report data shows that iQiyi’s paying members are still increasing, it is definitely wise to dig up the new increase in advance-iQiyi’s paid revenue in the first three quarters of 2019 was 10.6 billion yuan, a year-on-year increase of 42.5% The membership reached 106 million, a year-on-year increase of 31.1%, while Tencent Video was 100.2 million, a year-on-year increase of 22.2%.

That is to say, although each platform is affected by the delayed launch of content in 2019, the growth rate of paid members is still at a high level. You know, Netflix’s paid membership growth is now only 21.4%.

But in terms of macro data, the number of members of the video platform may have passed the first stage of the fastest growth..

According to the data of the “Q3 Mobile Internet Report 2019”, since June this year, the monthly mobile Internet devices have continued to fall after breaking through 1.03 billion. In September, the monthly increase in mobile devices was only 5.202 million compared with January. At the same time, the “China Internet Development Report 2019” data also shows that in 2018, China’s online video paid users have exceeded 50% of the total online video users.

The total ceiling is high, but it is indeed visible to the naked eye.

“China Internet Development Report 2019”

In the interview, Yang Xianghua, iQiyi member and president of overseas business group, revealed to Shenxiang a more detailed set of data: iQiyi’s current users accounted for 80% of the first-tier and second-tier cities and new first-tier cities, 36 Ninety percent of them are under the age.

Besides the meaning, although there is still considerable room for growth in the first and second tiers, in the face of young and first tier users who are becoming saturated, video platforms must attract new forces in the sinking market.

The sinking market today has indeed shown great development potential. As a whole, the sinking market is a huge blue ocean with 670 million users, and there are also a large number of groups such as “town youths” and “silver-haired crowds” with considerable spending power.

According to the National Bureau of Statistics, the number of young people in small towns reaches 227 million, and the average monthly expenditure is 2150 yuan, which is not much different from that of first- and second-tier cities, and its entertainment expenditure accounts for even more than the first- and second-tier cities. Urban youth.

It’s imperative that the video sink. But the Nuggets sink the market is not without challenges.

There are “time differences” in the world inside and outside the fifth ring, and the “time differences” result in the discontinuity of information and cultural differences. For individuals, they have obvious differences in personal aesthetics, hobbies, content preferences, and consumption habits.

In addition, the basic element of leveraging the sinking market is always Internet technology, but the sinking market has not yet fully achieved a breakthrough.Taiwan’s constraints to sinking the market.

Regarding these realistic challenges, Yang Xianghua said that iQiyi is currently looking for suitable content, channels and methods to reach this market, and an operating team for the sinking market already exists.

Yang Xianghua believes that the key to sinking the market is to allow users to cross the first payment threshold in an appropriate way, and then it is much easier to gradually cultivate user payment habits.

At the iQiyi’s third-quarter earnings report analyst meeting, iQiyi founder and CEO Gong Yu also expressed his views on the sinking market and the path to the sinking market.

He believes that first, third, fourth, and fifth tier cities will become the driving force for subscriber growth in the future. There is no obvious difference between third and fourth tier cities and first and second tier cities in terms of payment behavior, so multi-tier cities will still have uniform pricing in the future. Secondly, iQIYI has already taken some measures in terms of content, value-added services and technology to increase the penetration of the sinking market. Next year, it will further increase the ARPU value of members by reducing promotions and increasing the unit price of payment.

Obviously, while exploring the sinking market, iQiyi is also trying to boost the member services business in more ways.

On the one hand, it is to raise prices for members. Recently, iQiyi said that it is brewing a rise in membership fees, and it does not rule out that it will take the lead in raising prices. The specific price increase range and the time for price increase have not yet been determined. Currently, in-depth research is being conducted.

A good business model must be that prices and services match, so that businesses can operate normally. In fact, the domestic video platform member prices are indeed low, which does not match the content and value-added services provided by members at the moment.

At present, the prices of the three members of Youyou Teng are close to 20 yuan per month, which is one-fifth of the price of the US platform price, and lower than some countries in Southeast Asia. At present, the single user APRU value of the music platform has reached an average of several hundred yuan per month, and even the price of a cup of coffee is equivalent to a two-month membership fee.

On the other hand, link up with other platforms and brands. For example, in March of this year, iQiyi and Kugou reached a membership service cooperation. In November, they partnered with Suning to launch a one-year joint membership service. At present, they have consecutive seasons and purchase 12 months of membership. rights and interests.

The most direct purpose of opening up multiple dimensions of rights and alliances with multi-platform brands is to “pull new” to create more value-added space. The platform has a deeper purpose for member linkage. According to Yang Xianghua, iQiyi is not concerned about the immediate growth brought by the newcomer, but more importantly the subsequent conversion of this new user and whether it has user stickiness.

Overseas market

Overseas, the situation is much more complicated.

However, compared to what many commented about China ’s Internet going to sea “in the second half”, Yang Xianghua said that in fact, he more agrees that going to sea has just “kicked off” and it is estimated that it will take a few minutes to enter the second half.Ten years, and iQiyi’s going to sea is an advance layout after seeing opportunities and trends.

And beyond what is generally expected, iQiyi’s going to sea is not just about going to sea, but also about technology.

Yang Xianghua told Shen Xiang: “When communicating with many local operators and TV stations in Southeast Asia, I found that our technology is very advantageous, and for them all is wanted but not available.”

Yang Xianghua, iQiyi member and president of overseas business group

The customizability of streaming media video platforms requires increasing Internet technology support. There are obvious thresholds for small and medium-sized countries, but China already has a certain technological strength.

Yi Tao, Vice President of iQiyi also introduced to the media that iQiyi’s technology is the core of providing global operation support. For example, iQiyi has product-side technologies such as picture quality, broadcast speed, and stability. Art already has research and development capabilities, and the use of big data, artificial intelligence and other technologies can achieve accurate recommendation of content. What Iqiyi wants to do in the future is to use technology as the core and build the ability to provide services to global partners.

The streaming media market in Southeast Asia has reached the early stage of its explosion. Users ’awareness of streaming media is gradually increasing and their viewing habits are gradually taking shape. Therefore, this is the best time for iQiyi to go abroad.

Based on the advantages of technological innovation and the enhancement of content production level, iQiyi’s mode of going to sea is to go to sea with these two advantages at the same time.

During the Sixth World Internet Conference, Gong Yu also said that going out to sea is actually very difficult. Iqiyi ’s method is to “export Chinese cultural products and services with dowry”.

Returning to the content, iQiyi’s going to sea is actually not reckless. It is also a strategy of choosing Chinese content as the core and then gradually adding localized content.

In recent years, the influence of Chinese content in Southeast Asia has gradually increased. Last year, “Yanxi Raiders” was very popular in Thailand and the Philippines. This year’s “Chen Qingling” also became a hit in Southeast Asia. Therefore, first producing excellent Chinese content for export is to maintain the original advantages of Chinese players. On this basis, localized content production is also helpful to further open the local market and attract more new users. .