Video payment is ready to try new ways

On October 28th, YouTube launched the payment model and officially launched the paid version of the video service. The new version named "YouTube Red" will charge users a monthly subscription fee of $ 9.99. On the previous day, iQIYI and Youku all talked about the new payment model that they are trying to explore in this year at their respective marketing conferences. It is not difficult to find that for video websites, the payment mechanism is just a must.

For the future advertising and payment profit planning, IGI CEO Gong Yu said in an exclusive interview with this newspaper that “it may be advertising revenue, but in the more stable and mature stage, we believe that the user’s payment income and the The proportion of advertising revenue should be close to 1:1."

But for now, video sites still have a hard time losing money.

Behind paid exploration, first of all, advertising revenue cannot support website profitability. According to iResearch, from 2013 Q2 to 2015 Q1, the revenue composition of China's online video industry is mainly divided into advertising revenue, copyright distribution and video value-added services. Among them, the lowest proportion of advertising revenue is 58.2%, and the highest ratio is 75.5%. It can be seen that the charging mode of video websites is too single, and the most popular form of advertising is still patch advertisements. In the Internet era of effect-based charging, the low click-through rate of advertisements has also caused the price of patch advertisements not to increase substantially.

From a cost perspective, content costs and bandwidth costs have skyrocketed. Analyst International Analyst Ma Shicong said, "In terms of content procurement, video sites have gone from pure copyright competition to homemade content, and self-control means greater cost than before."

Take Youku Tudou as an example. According to Youku Tudou, the content cost was RMB 744.4 million in the second quarter of fiscal 2015, accounting for 46% of net revenue; in the first quarter of 2015, it was RMB 669 million, accounting for 59% of net income. %. The bandwidth cost was RMB 330.3 million in the second quarter of fiscal year 2015, which accounted for 21% of the company's net income; the first quarter was RMB 306.8 million, which accounted for 29% of net income.

In other words, in the second quarter of this year, Youku Tudou's content and broadband costs together accounted for 67% of net income; in the first quarter, these two costs accounted for 88% of net income. In addition to operating costs and other costs, video site profits are not easy.

Gong Yu told reporters, “The best content input must be the largest, and the largest input will surely be charged, because the best content is unsustainable with the advertising model. Simply put, the cost of good content in the same minute is very high. High, relatively low content costs are low, but the advertising unit price cannot be several times different, so good content must be a richer monetization model, with fees first, followed by derivatives."

On the other hand, an important factor that has caused the payment wave is the gradual maturity of the payment market. According to statistics of China Internet Network Information Center CNNIC, as of June 2015, the number of online video users in China reached 461 million, an increase of 28.23 million compared to the end of last year; the utilization rate of online video users was 69.1%, an increase of 2.3% from the end of last year. Among them, mobile video users are strong growth promoters, and now mobile payment habits have also been cultivated, and payment conditions have become more mature. In addition, high-quality IP plays have attracted many young users, and paid users on various platforms have multiplied.

According to iQiyi data, by the end of October this year, the number of its members has grown to nearly 10 million. However, compared to the total number of users, the number of members is still less than 1%. Iqiyi stated that in 2016, 50% of the funds and resources will be invested in the construction of the VIP membership system. Sohu CEO Zhang Chaoyang recently mentioned in a conference call after the publication of the financial report that “as a whole, the user payment service will be the key development area for Sohu Video in 2016.” At the same time, he further stated that “user payment is due to our base. It's relatively low, so to give priority to developing users with preferential prices, after the user base has been added, prices will certainly be adjusted next year."

According to statistics from Analysys International, for the share of advertising revenue in the online video market in the first quarter of this year, Youku Tudou, Iqiyi PPS, and Tencent Video topped the top three with 21.17%, 19.59%, and 14.11%, respectively.

After Yuli’s acquisition of Youku Tudou, Gong Yu did not think that the pattern of the video industry has changed much. “For Youku, it became a subsidiary of Ali and was a relatively special privatization. The original Youku has a part of the equity is Ali, now In Ali, there has been a local change, not a qualitative change. From the current market share, we can basically see that the Romance of the Three Kingdoms continues to exist, and the share of the three countries should be more than 70%."

Zhang Chaoyang said in a previous conference call that “From the aspect of content copyright price competition, Alibaba’s acquisition of Youku Tudou may lead to more irrational competition in this industry and the content price environment may continue to deteriorate. However, we feel that online video business There is a great need for innovation. To build a successful, profitable business, you must have an innovative business model instead of fighting for your lives in the hot content field."

In fact, video sites are already testing new ways for water and electricity companies, games, and other new games - such as crowdfunding concerts, video shopping, the establishment of e-commerce sites. In addition to the network broadcasting platform, video companies have also begun to expand upstream and downstream, and have established film companies. In terms of games, iQiyi’s “Spend One Thousand Bone” game revenue has been higher than the TV drama's advertising revenue.

In this “three countries separatist” era, the three also told their stories. Gong Yu told reporters that iQIYI is going to be online Hollywood. In addition, Youku potatoes played the banner of the entertainment culture of Taobao Tmall. On August 6th this year, Youku Tudou has changed its name to “Group One,” and plans to invest 10 billion yuan in cash and resources to support Web content in the next 3 years, and will transform from a pure video site to a cultural and entertainment industry. Entrepreneurial platform; while Tencent video relied on huge social genes to gain greater market share, and videos on WeChat and QQ were all contracted by Tencent Video.

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