Competition is stalemate, and profitability is far off.
Editor’s note: This article is from the micro-channel public number “Heike Finance” (ID: haikecaijing) , Author: He Xu.
A recent report from short-selling agency Wolfpack has cast a shadow on iQiyi, which is about to celebrate its 10th birthday on April 22.
It ’s hard to say how the incident is going, but this sudden increase in attention from the outside world is obviously not what the parties wanted. A related question is being stirred up by this: How is iQiyi living today?
It can be seen that in recent years, the sound volume of the long video is far behind that of the short video: there is byte beating and re-injection overweight overseas, and TikTok quickly subverts Taobao’s attitude to participate in the live broadcast of goods, which can be said to be well received The long video here has been quiet for a long time, and there is little chance to enter the center of the stage. Specifically, since the triumphant situation of iQiyi, Youku, and Tencent, there have been few exciting news in the industry. The most recent one is 2019. At the end of the year, Tencent Video and iQiyi caused a hot discussion on the whole network due to the on-demand performance of “Qing Yu Nian” and the “puppet” charging.
The three leading companies have been losing money for years, which clearly points to the current profitability of the long video industry. In fact, in the same words, Yang Weidong, the former president of Youku, said two years ago that the main reason is that the three websites are not profitable because of business model problems.
Looking at the various actions of iQiyi since its listing in March 2018, such as the integration of literature, comics and other sectors in 2018 and the expansion of it, to create an ecosystem “Apple Orchard”, and then the founder of iQiyi And CEO Gong Yu said that instead of simply sticking to long videos, it is necessary to form a product matrix of multiple apps. These seem to indicate that relying on only one app, iQiyi, based on the “advertising + membership” model for revenue, has already It’s not so sexy anymore, it doesn’t even work anymore.
Is this the case? Is the video site unprofitable, is the business model unfeasible, or is there something else?
01 How is the money burned?
Unprofitable. To put it plainly is to make ends meet.
How difficult is it for iQiyi to make money? It is better to list a set of data: The financial report shows that in 2019, iQiyi’s net loss was 10.3 billion yuan, an increase of 11.7% from the 2018 loss of 9.1 billion yuan, and its total loss in the past five years has reached 28.8 billion yuan.
Gong Yu commented when Iqiyi was established two years ago, the long video industry is a game for the rich, you can play it if you have money, and you will automatically quit without money. If you do n’t buy copyright, youIt’s dead.
At least for now, this is really a track that needs a lot of money to pave the way. It is difficult for ordinary players to enter the field. The most important step in the early stage is to buy money for copyright.
Before the model of self-made content took shape, buying copyright was once a major cause of losses for various platforms, especially after Tencent entered the game and Youku exerted force, several companies scrambled fiercely. Pain.
Under the home-made model, including home-made dramas and home-made programs, it has a certain suppression of high copyright fees, but it is also a step-by-step learning process, which cannot be achieved overnight, and home-made content is easy to step on. The development of video websites has basically formed the coexistence of several content sources such as procurement, cooperative development and self-made.
In spite of any deliberate adjustments to the content, overall, it is difficult to reduce significantly. At present, several domestic video websites send messages to the outside world at the end of the year, proclaiming how much money will be spent on the content the following year. This aspect is to scream and advertise in advance, on the other hand, it is also a wink for partners. For example, Sun Zhonghuai, vice president of Tencent and CEO of Penguin Films and TV, publicly stated in March 2019 that Tencent Video ’s budget for content in 2019 will still be no less than 20 billion yuan. Of course, the industry is well aware that this expenditure was a higher 28 billion yuan in 2018.
In addition to the heavy investment in copyright purchase and content self-production, the bandwidth costs that are increasing are not to be underestimated.
On the input side, it is difficult to keep costs low. On the revenue side, the traditional advertising model has gradually stabilized and the growth of the membership model has slowed.
At the same time, as some comments have already mentioned, advertising and membership are somewhat mutually exclusive.
How to understand?
According to the 2019 financial report of the American video streaming giant Netflix, its global membership fee was US $ 19.895 billion during the reporting period, accounting for more than 98% of all revenue. There is no free content on the Netflix platform, mainly due to membership fees. Unlike this, the current charging logic of Chinese video sites is actually to attract a large number of users with free resources, and then convert paid members from daily active users. Some users will have a better viewing experience, such as no ads, “watch three episodes in advance” Buying members, however, sells content consumption efficiency or poor information.
The model of “converting charges from free” determines that, considering the user experience, the scale of advertisements cannot be infinite, and when the advertisements are really unbearable, the consumption of certain content