It seems that 50 yuan has triggered a lawsuit, but it is actually a collective counterattack by consumers against the company’s business model.
Text | Sixth Sense
It is difficult to make a play, even more difficult to watch a good play, and it is even more difficult to follow the hit online drama "Celebration of More Than Years". How difficult? 50 yuan, making Tencent Video and VIP members enemies and going to court.
On December 11, 46 episodes of "Qingyu Nian" were broadcast to 22 episodes, and a charging window suddenly popped up on the screen. Fans who were chasing the drama were informed that Tencent Video and iQIYI Video had launched the "Qingyu Nian" VIP advanced on-demand service, that is, on the basis of VIP watching 6 episodes first, VIP members can watch 6 more episodes during the update by paying another 50 yuan.
VVIP is set up outside of VIP, and the on-demand mode directly touches the bottom line of users, causing thousands of waves with one stone. Some users are angry: "It’s too ugly to eat" "It’s crazy to think about money" "This operation is really slutty." The People’s Daily immediately issued an article criticizing "some websites that are caught in the water, burning forests and hunting, and destroying their future." For a time, the video platform became the target of public criticism, and the criticism was boiling.
Things continued to ferment until December 17, and Tencent and iQIYI, who were unable to bear the pressure of public opinion, responded one after another, admitting that they were "not considerate enough to members’ consumption psychology". "The original intention was to meet user requests, but it was not done well." However, as of December 19, the advanced payment on-demand model was still not removed from the shelves. iQIYI adjusted the charging rules to VIP members to conduct on-demand at a price of 3 yuan per episode. After watching the rest of the plot, it cost a total of 63 yuan, which did not drop but rose.
In the face of a series of operations on the video platform, most users said they could no longer bear it and had to protect their rights. Weibo blogger @logos logicspublished a public post on the 19th, saying that he had sued Tencent, demanding confirmation of multiple terms under the Tencent Video Super Film and Television VIP membership service agreement, and compensation for economic losses of 500 yuan. This move triggered 24,000 people to participate in the discussion, and the number of supporters continued to rise.
A domineering president-like increase in money on demand has made the video platform a "public enemy of the whole people". Regardless of whether the lawsuit is won or lost, the platform’s reputation has been greatly backlashed. It seems that 50 yuan has triggered a lawsuit, but it is actually a collective counterattack by consumers against the business model of the enterprise. For video platforms, business conduct is understandable, but how to make users willing to pay for a variety of payment methods and earn decent money? This requires deep thinking.
Is it worth watching 6 more episodes for 50 yuan?
In fact, the model of advanced on-demand is not the first of "Celebration of More Than Years". This summer’s hot "Chen Qing Ling" also adopted the method of advance on-demand in the final finale. Whether it is VIP or SVIP, users can pay 6 yuan for a single episode, or directly unlock it for 30 yuan to the finale. In addition, the finale is not sold alone, that is, users must spend 30 yuan to see the finale.
This move also attracted a crusade, but at the same time, users have to pay for it, more than one million people pay on demand, according to the package price of 30 yuan, Tencent overnight nearly 80 million yuan in the bag.
After "Chen Qing Ling", latecomers have followed suit. As of now, with the addition of "Celebrating More Than a Year", five episodes have been launched in an attempt to advance on-demand: the manga drama "Once Upon a Time There Was a Spirit Sword Mountain", users can watch the last five episodes in advance for 12 yuan; the urban romance drama "You Without Secrets" remade from "Hear Your Voice", users pay 2 yuan to watch the next episode in advance, and pay 3 yuan to unlock to the finale; the ancient costume romance drama "The Bright Moon Shines on My Heart" launched members to spend an additional 12 yuan to enjoy the last 6 episodes of the finale.
The video platform has tried to test the bottom line of users again and again. Why did "Qingyu Nian" become the "scene of a large car accident"? "Behind the scenes" believes that this is directly related to the user attributes corresponding to various dramas.
When "Chen Qing Ling" was broadcast, the reputation was not good in the first week, complaining more than praising. Later, the breakthrough in the promotion of the series was transferred to the marketing point of the two male protagonists’ appearance, attracting a large number of fans. The biggest difference between fans and fans is that the focus is on Idol itself, willing to pay for idols and regard spending money as support, which is fundamentally different from the mentality of fans who watch the show in advance.
After that, the manga drama "Once Upon a Time There Was a Spirit Sword Mountain", the remake drama "You Without Secrets", and the ancient costume romance drama "The Bright Moon Shines on My Heart" all hit the secondary payment point at the "Unlocked Finale". From the perspective of the mentality of the drama fans, spending money once can see the end, and you don’t have to worry about waiting for more, which is equivalent to solving the problem at one time.
As the popular drama "Celebration of More Than a Year" at the end of 2019, the identity of the drama chaser is relatively complex and can be roughly divided into three categories:
◆ The first is the original party. The original novel "Qingyu Nian" was first published in Qidian Chinese in 2007. It is an early work of the platinum writer China Literature Limited, and it is also its famous work. Compared with the general adaptation, "Qingyu Nian" opened with a comic and humorous style, which won the favor of many original parties, which also won the first batch of fans for the script itself.
Secondly, there is the fan club. "Celebration of More Than a Year" brings together young idol stars such as Zhang Ruoyun, Li Qin, Xiao Zhan, Song Yi, and Li Chun. Chen Daoming, Wu Gang, and other actors are blessed. They have their own fan attributes, and girls and women take it all, which coincides with "Chen Qing Ling".
◆ Finally, there are drama chasers, who belong to retail investors. Most of them come for the reputation and popularity of the drama, and the purpose is simply to watch the drama. Therefore, it is not difficult to infer that the drama chasers in "Qingyu Nian" cover a wide range of age groups, and most of them are rational drama watchers.
The video platform obviously did not understand the user. "Qingyu Nian" chose to start on-demand in the 22nd episode, which was more than half ahead of the previous drama. The so-called advanced on-demand was only to quench the hunger and thirst for a week. Even if the drama fans spent 50 yuan, they still couldn’t get rid of more suffering. For VIP users, the meaning of VIP lies in dignity, privilege, level, and identity. If you pay for the second time without prior notice, you will disregard the user’s right to know. It doesn’t matter whether you spend money or not. The key is not this truth. On the other hand, "Qingyu Nian" suffered copyright leakage, and the number of pirated episodes was more than that of advanced on-demand. For the time being, regardless of piracy violations and violations, from the choice level, it has already provided a new release outlet for drama fans. Internal and external factors are mixed together, and the video platform naturally causes fans to boycott.
"Advanced on-demand" is just the beginning?
The emergence of "advanced on-demand" is not a whim of video platforms. "Behind the scenes" understands that behind the pay-and-pay is a reflection of the difficulties and pressures currently facing video platforms.
According to official data, in 2018, the three video platforms of "Aiyouteng" lost a total of about 19 billion yuan. In 2019, the loss continued to grow. The third quarter report of 2019 released by iQIYI showed that the net loss in the quarter reached 3.70 billion yuan, an increase of 19.4% compared with the loss in the same period last year.
The losses are caused by various factors, but in the final analysis, there are problems with the business model of Internet audio-visual. As early as 2018, Yang Weidong, the former rotating president of Alibaba Entertainment, bluntly said, "If the business model is just pure advertising and membership buyout model, there is no problem with simple production, purchase and sales relationships. But as the investment in head content gradually increases, the value of content cannot be fully digested by advertising and membership alone. Video platforms will usher in a cold winter after the capital ebb."
Looking back over the past few years, under the impetus of "content is king", the copyright battle between video-based websites has become more and more intense. In the era of PC Internet video in 2013, the competition for video rights triggered a "money-burning war".
In 2013, Sohu Video spent nearly 100 million to buy the exclusive broadcast rights of "The Voice of China"; in 2014, iQIYI bought the "Dad Where to 2", "Happy Camp", "Every Day Up", "Variety Big Coffee Show" and "Let’s Date" in one breath. The copyright of the five variety shows cost close to 200 million yuan; in 2015, Tencent bought NBA exclusive broadcast rights for 5 years and 500 million dollars.
The competition of online video platforms has caused copyright fees to soar. It is understood that in 2006, the copyright fee for a single episode of "Wulin Gaiden" was 1250 yuan; in 2011, the copyright fee for a single episode of "Step by Step" was more than 700,000 yuan; in 2016, the copyright fee for a single episode of "Ruyi Chuan" was 9 million yuan… In just ten years, the copyright fee has skyrocketed by 7,200 times, which is naturally the main reason why Internet video platforms are difficult to make profits.
In the second half of 2018, salary restrictions and entertainment restrictions were introduced one after another, and the copyright cost of video platforms decreased. But new problems have come again. First, the overall slowdown in the growth rate of the industry. In 2018, the overall user growth rate of online video has dropped to 5.7%, compared with 25.5% in 2008. According to QuestMobile statistics, as of June 2019, the number of active users of online video increased by only 2.4% year-on-year, which is the lowest level in the pan-entertainment industry. Second, as the entertainment industry encounters a capital winter, advertisers have taken a conservative attitude towards the overall growth of the marketing budget of video platforms. This is undoubtedly worse for video platforms that achieve commercial closed-loop through "new user acquisition through ads" and merchant advertising.
In response to the "Qingyu Nian" advanced on-demand incident, both platforms involved gave official responses. Wang Juan, vice president of Tencent Video, said, "We have also thought about the controversy caused by" Qingyu Nian "this time, and we are still not considerate enough in our understanding of members’ notification and consumer psychology. In the future, we will further optimize and enhance the service experience of members, and bring you more high-quality content and considerate service." iQIYI also made a similar statement. Dai Ying, vice president of iQIYI and general manager of the self-produced drama development center, said, "Our original intention is to meet users’ more diverse content needs, but we may not have done a good job. In the future, we hope to take more into account users’ psychology and do a good job in the design and notification of the broadcast."
The anxiety of video platforms comes from the disparity between revenue and cost, so exploring new business growth points will become inevitable.For users, "advanced on-demand" is just the beginning. Compared with the forced buying and selling of "Qingyu Nian", the difference in the future will only be the improvement of consumer comfort.
How can video platforms earn a decent income?
The video industry is an early industry of the Internet. As early as 2005, Tudou was launched. In 2006, Youku was launched, and the industry has a history of more than ten years. At present, the companies in the first camp of the video industry include iQIYI, Tencent Video, Youku, and Mango TV, PPTV, etc. Unfortunately, these video platforms are all lossmaking.
Looking at the foreign video industry, it is a hot one. In the early morning of October 17, Netflix, the largest video platform in the United States, announced its third-quarter financial results for this year. According to the financial data, Netflix’s third-quarter revenue was $5.245 billion, an increase of 31.1% over the same period last year’s $3.999 billion. Net profit was $665 million, an increase of 65% over the same period last year’s $403 million. At the same time, in November this year, Apple TV + and Disney + were launched one after another, and Disney + gained 4 million users in the first month and received $55 million in revenue.
"Behind the scenes" Horizontal comparison found that these foreign profitable mainstream video platforms have exclusive profit models, which is also a good reference for domestic video platforms.
1) Increase the price of membership fees and make a good transition to new and old customers
Judging from the "Qingyu Nian" storm, it is not easy for members of video websites to raise prices. Netflix also encountered such a development crisis in 2014. At that time, Netflix’s approach was to divide members of different levels according to the resolution and sound effects of video signals. First, the price was raised for new high definition members, from the original $7.99/month to $9.99/month, and old users enjoyed the price of $7.99 until two years later. In this way, not only did it fully respect the existing rights of old users, but also allowed new members to enjoy better high definition services. Correspondingly, Netflix’s paid members still increased by 18.9% in 2014.
Apple TV + and Disney +, which launched in November this year, have also done their homework on the user experience. Both new services support 4K and HDR format content. The increasing technological content brings users a sense of freshness, and the membership fee increase naturally becomes appropriate.
2) Homemade content, deeply engaging users
High-quality and unique content, available only to paying subscribers, has always been a must-kill weapon for Netflix to dominate the market. Have you seen the TV series "House of Cards"? Former US President Barack Obama is said to be fascinated by it and complained that the sequel is too slow. Some even say that the plot of "House of Cards" will affect the outcome of the US presidential election. Its production and distribution company is Netflix.
How strong is Netflix’s homemade content? On December 10, 2019, at the Golden Globe Awards, known as the "Oscar weathervane", it successfully led with 17 nominations in the TV category and 17 nominations in the film category. This seems to mean that Netflix is not far from the Academy Awards for Best Picture. Spending money, throwing money, or throwing money, under the strategy of desperately making content, Netflix’s goal must not only be the Oscars. It is Netflix’s ambition to bring the film and television industry to the main track of streaming media.
Coincidentally, on December 17, 2019, the Shanghai Magnolia Awards announced that online dramas will also be able to participate in the competition from next year. This is undoubtedly a good opportunity for domestic video platforms to break through the circle and gain mainstream recognition in the industry, and it is bound to stimulate the high-quality development of online dramas.
3) Multimeson propagation to expand overseas markets
Every industry has a bonus period and a ceiling. In September 2010, Netflix took the first step in overseas expansion – entering Canada, and in the following six years, it has been deployed in more than 190 countries and regions around the world. In July this year, Netflix also extended its tentacles to India, launching a subscription model for Indian mobile phone users only 199 rupees per month. In addition, at the beginning of this year, Netflix also won the global streaming rights of "Wandering Earth" except for the Chinese mainland. Then, in April this year, Netflix announced that it had obtained the exclusive broadcast rights of Korean dramas "The Abyss", "Spring Night" and "Asda Chronicles". Netflix Chief Content Officer Ted Sarandos disclosed that Netflix’s current paying user growth is mainly from the international market.
In recent years, Netflix has also been exploring multi-meson communication, and has deployed in three OTT devices with the highest popularity of streaming media players/playback sticks, smart TVs, and game consoles. According to the latest survey data, Netflix has become the most frequently used platform on TV in the United States, surpassing traditional cable TV and cable broadcasting. Recently, Netflix also announced the lease of New York’s iconic cinema, the Paris Theater, and plans to use this location for special events, screenings, and theatrical releases of some large-scale works.
A discussion on the profit model of the video industry triggered by the on-demand model of "Qingyu Nian" is far from over. It is foreseeable that the way to increase profits should not be to pick up users’ wool, but how to improve service quality and formulate reasonable charging standards. Looking to the future, the potential of long and short video aggregation, the new opportunities brought by users’ willingness to pay, the new value generated by cross-content ecological linkage, and the vast international market will all be opportunities for the domestic video industry.
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