One article tells the past and present of the "short video trend"

On April 22, Papi Jiang, who became famous through short videos , donated 20.66 million yuan to her alma mater, the Central Academy of Drama. The news received some reports but was not widely spread to the public. Many people lamented that the "No. 1 Internet celebrity in 2016" who became famous through short videos has become outdated.

An important reason why Papi Jiang’s popularity has declined is that more and more “talents” are investing in short videos: in sharp contrast to Papi Jiang’s obsolescence, the short video industry is becoming more and more popular, and is called another content entrepreneurship trend after live streaming .

The air is full of money

Short videos have become a battleground, with new and old Internet giants all vying to invest money in it.

Miaopai, which is developed in conjunction with Weibo, is a leader in the short video field. As early as the end of 2015, it invested $100 million to support short video startups . In November 2016, it again invested 1 billion yuan to build the upstream and downstream industrial chain of short videos. Its parent company Yixia Technology received $500 million in financing led by Sina Weibo in the same month.

Another platform that attaches the same importance to the construction of short video ecosystem as Miaopai is Toutiao . Before Miaopai announced its 1 billion yuan subsidy plan, Toutiao announced in September 2016 that it would provide at least 1 billion yuan in subsidies to short video creators in the coming year. In February this year, it also expanded overseas and acquired the American short video platform Flipagram . Zhang Yiming, CEO of Toutiao , said that "short videos are a promising field" and "a move in the right direction."

Miaopai and Toutiao are the two giants in the short video field. The two are unwilling to give in to each other. Miaopai said that "Miaopai is short video", and Toutiao responded tit for tat, "Toutiao has become the largest short video platform in China, bar none."

While Miaopai and Toutiao were competing fiercely, the up-and-coming Kuaishou was quietly making a fortune. In March, Kuaishou completed its first round of financing with a total amount of US$350 million, led by Tencent.

When talking about this investment , Ma Huateng said, "Kuaishou focuses on serving the recording and sharing of ordinary people's daily lives, bringing people closer together. It is a product in China's mobile Internet that is very close to users and has warmth and vitality."

In addition to investing in Kuaishou, Tencent also launched the "Mangzhong Plan" to support content entrepreneurship. Version 1.0 of the plan was launched in March 2016 with a subsidy of 200 million yuan. Version 2.0 was launched at the end of February this year with an additional subsidy of 1.2 billion yuan, and short video creators were the key support targets.

Another company that is catching up with this trend is Meipai . This short video application, which was launched in May 2014 and mainly targets women as its users, attracted 100 million users within 9 months of its launch. By January this year, its total user base had exceeded 160 million. Meipai and Meitu XiuXiu are from the same family. Their parent company, Meitu , was listed in Hong Kong in December 2016 thanks to these two popular applications, and its current market value exceeds HK$45 billion.

Meipai’s success stimulated Momo . Momo earned 2.6 billion yuan last year by seizing the live streaming boom. Now that the live streaming boom has slowed down, Momo is trying to catch up with the short video boom. At the end of March, Momo integrated the original short video module into the first-level entrance "Nearby". Momo CEO Tang Yan attached great importance to this adjustment and elevated it to a strategic level, saying that "video usage scenarios can provide users with rich entertainment content" and emphasizing that "Momo will transform and upgrade from a tool platform for making friends to a social platform."

Alibaba ’s participation is definitely indispensable in such a big trend. Also at the end of March, Alibaba announced that it would fully transform its Tudou into a short video platform and launch the "Big Fish Plan" to empower short video creators, with a total subsidy of 2 billion yuan.

Several major giants have provided more than 5 billion yuan in subsidies to short video startups. Some commentators said that this trend is full of money, and the opportunity to "fleece the capitalists" has come again.

Entrepreneurial Star

Every trend can create a group of star entrepreneurs , and short videos are no exception.

The most well-known short video star is Papi Jiang . This woman who calls herself "a combination of beauty and talent" became famous in February 2016 and received 12 million yuan in financing a month later. In April, she cooperated with Luo Zhenyu , who is good at making news headlines, and raised the price of her first patch advertisement to a sky-high price of 22 million yuan, which caused quite a stir at the time.

Although Papi Jiang is famous, her ability to raise funds is limited. Those professional teams that are not internet celebrities can raise hundreds of millions of dollars, such as Yitiao , Ergeng and Pear Video.

Founded in September 2014 by Xu Husheng, former editor-in-chief of The Bund Pictorial, it targets middle-class users and focuses on short videos of "life, trends, and literature" . Its works are elegant in style and well-made. It attracted 1 million users within 15 days of its launch. Today, its basic users have exceeded 20 million and its daily active users are 1 million.

Yitiao has never been short of money since its inception. Its angel round investment reached tens of millions of yuan. In July 2016, it received another 100 million yuan in B+ round financing. Its cash reserves reached 200 million yuan, and the company's valuation was approximately 1.3 billion yuan.

There is another one that takes a similar route. Ergeng is themed "Discovering the unknown beauty around you" and uses cities as units. It uses 2 to 5 minutes of documentaries to present a person, a thing, a dream or a culture. Its style is healing. In 2016, Ergeng’s monthly playback volume exceeded 1 billion times, and its annual revenue exceeded 100 million yuan.

Ergeng is not short of money. It first received more than 50 million yuan in Series A financing in March 2016, and then received 150 million yuan in financing in January this year. The latter financing broke the financing record for domestic short video content startups.

However, with the emergence of Pear Video , this record has become nothing. In November 2016, Qiu Bing, the former CEO of The Paper, launched the information short video platform Pear Video. Before its launch, Pear Video had received US$100 million in financing. However, in February this year, Pear Video was "ordered to rectify" by the Beijing Municipal Cyberspace Administration, the Municipal Public Security Bureau and the Municipal Cultural Market Administrative Law Enforcement Brigade, and therefore gave up its original positioning and turned to making short videos about the lives, thoughts and emotions of young people.

The wealthy Yitiao, Ergeng, and Pear Video have gathered a large number of short video entrepreneurial talents, but in this trend, how many talented people are willing to work under the banner of others? More people choose to practice alone.

Short video teams of all sizes, such as Arrow Factory, Chen Xiang Six and a Half, 30 Seconds to Understand Cars, Wang Nima, and Trendy Xiao Luo, have also joined in this wave of "fleecing capitalists". The popularity of the videos produced by these teams cannot be compared with those of Yitiao and Ergeng, but they are well-known in the circle, and some have even raised a lot of money. For example, "30 Seconds to Understand Cars" received 15 million yuan in preA round of financing in August 2016.

The sports field is also seen as a hot spot for short videos. In June 2016, football commentator Dong Lu founded the short video company "LeBo Football", and football player Sun Jihai launched the short video social platform "MiaoHi".

Short video entrepreneurship is becoming more and more popular. Investors and entrepreneurs seem to be convinced that it will become the next trend. Where does their confidence come from?

Insight into the underlying needs of human nature

As the saying goes, “There is no wind without waves.” The reason why short videos have become popular is first of all the demand.

Sina Weibo’s market value exceeded US$10 billion in November last year, surpassing the industry leader Twitter, thanks in large part to the explosion of short videos. Weibo's financial report in August 2016 showed that its monthly active users reached 228 million, maintaining a growth rate of more than 30% for nine consecutive quarters. The average daily playback volume of short videos reached 1.57 billion, an increase of 235% over the previous quarter. These short videos all come from Miaopai, which is why Miaopai subsequently launched a 1 billion yuan subsidy.

The situation with Toutiao is similar. In 2016, the average daily playback volume of its short videos reached 1.3 billion, and the average daily playback time reached 37 million hours, an increase of 605% over 2015. In addition, the time users spent on short videos was 1.33 times that of pictures and texts.

Tencent is also well aware of this rapid growth. In the past year, the number of short video views has increased from 78 million to 2 billion.

Why do users suddenly have such a strong demand for short videos?

To figure out this problem, we must first understand the types of short videos.

Short videos can be divided into two types according to the different production entities:

One is the short video shot by professionals - PGC (Professional-generated Content). The short videos produced by Yitiao, Ergeng, and 30 Seconds to Know About Cars are all PGC. Miaopai and Toutiao are the main platforms for publishing PGC, and the subsidy plans they launched are also for PGC creators.

The other type is short videos shot by users - UGC (User-created Content). Videos released by Kuaishou, Meipai, Momo, etc. are basically UGC. These videos are taken by users themselves and the quality is not high. They are mainly used to show themselves, and the ultimate goal is to socialize or become famous. This type of short video platform does not need to subsidize creators like Miaopai and Toutiao, because what UGC creators need is popularity, and the growth of the platform itself is the biggest "subsidy" for such creators.

The rise of PGC is easy to understand. In the past two years, with the popularization of 4G networks and WiFi and the decline in mobile charges, watching short videos has become less expensive. At the same time, increasingly busy work has also left urbanites with a lot of fragmented time. Using this time to watch ethereal, beautiful, slow-paced short videos has become a kind of spiritual massage for urbanites. The greater the work pressure, the stronger this demand is. This is also the reason why Yitiao and Ergeng have grown rapidly. In addition, busy and restless urbanites also hope to seize fragmented time to catch up on various news, knowledge and concepts and keep up with this rapidly changing era.

A survey shows that users who like PCG are mainly career elites in big cities, while users who like UCG are mainly newcomers in big cities and young people from small towns in second-, third- and fourth-tier cities. Data compiled by China Business Strategy ( WeChat public account : hstl8888) shows that more than half of Kuaishou's users are unmarried people under the age of 24. Meipai's users are generally similar, with the difference being that Kuaishou's users are mainly male, while Meipai's users are mainly female.

Unlike PGC users who pursue mental relaxation and rapid learning, UGC users pursue expanding their social circle and curiosity. On Kuaishou, Meipai and Momo, anyone can become the protagonist regardless of their appearance, background or age. The popularity of mobile smartphones has made the cost of satisfying this wish close to zero. For those who are good-looking or have some talent, this is much easier than getting on the Hollywood Walk of Fame.

For viewers, this is a good opportunity to hunt for novelty or beauty. On Kuaishou, you can enter a bizarre world of magical realism, a world forgotten by the mainstream media but real; on Momo, you can appreciate all kinds of beauties, handsome boys and muscular men at close range. Some beauties even wear pajamas, lie on their backs, and do all kinds of teasing movements, as if they are taking pictures for their boyfriends.

The demands of both supply and demand sides are based on human nature—real, strong, unstoppable, and will erupt without any stimulation. Take Kuaishou for example. It has grown to 400 million users without spending a penny on advertising.

This year, users' demand for PGC and UGC has not weakened but has become even stronger. This has injected a shot in the arm for content entrepreneurs after the decline of WeChat official accounts and live broadcasts.

However, can the short video trend really continue? Will it be like live streaming, which was first suddenly accelerated by demand and capital and then became dull?

The truth about the industry chain

For an industrial chain to be formed, strong demand alone is not enough, there must also be effective supply, and the supplier must have a healthy profit model.

UGC short videos are provided by users. These users are not engaged in short video startups, so the platform does not need subsidies. They will continue to provide content and there is no supply problem.

The suppliers of PGC short videos are professional teams such as Yitiao and Ergeng. For these teams, producing high-quality short videos is a common job. Yitiao founder Xu Husheng said that this entrepreneurial venture is actually to graft the experience of culture, aesthetics, quality management, process management and segmented media operations previously formed in traditional media. In addition to experience, they also have equipment such as 4K high-definition cameras - the videos they shoot can even be played in movie theaters .

Obviously, this kind of high-threshold entrepreneurship is difficult to popularize. It is only suitable for traditional media elites. If Xu Husheng did not have a title like "former editor-in-chief of The Bund Pictorial", it would be difficult to attract venture capital. The reason why venture capital came in is that they saw that this type of entrepreneurship is difficult to replicate: after one business has been successful for so long, how many new ones will emerge?

Of course, there is no need for all PGC teams to have as large as Yiteng and Ergen. Most teams are small in scale and focus on vertical fields. Some work on cars , some on football, and some do Tucao. Papi Jiang is a PGC team that does Tucao. However, the threshold for starting such a small PGC business is still very high. After becoming famous, Papi Jiang launched Papitube, trying to mass-produce Papi Jiang, but she has not made any progress so far, and even her own works are in short supply.

While the supply cannot be increased, PGC's profit model has not matured.

Currently, there are two profit models explored by PGC entrepreneurs: advertising and e-commerce .

There are also two types of advertising revenue: one is the advertisements placed by advertisers, and the other is the traffic sharing of short video platforms. For general PGC, it is not easy to get advertisements from advertisers. Even if you are as famous as Papi Jiang, you can hardly get many advertisements. Many small PGC teams survive by relying on the platform's traffic sharing. Before short videos became popular, there were very few teams making short videos across the country, and each team could earn a good income. But now the situation has undergone a fundamental change. An old PGC entrepreneur complained that previously a few hundred entrepreneurs shared 100 million yuan in subsidies, but now 100,000 entrepreneurs share 1 billion yuan in subsidies. "This is a change in magnitude."

Of course, there are also those who have a comfortable life in advertising. One advertisement sells very well, and a 3-5 minute advertisement can sell for more than 1 million yuan, and their clients are such as BMW, Airbnb, and Xiaomi. At present, the annual sales of one advertisement is about 100 million yuan.

At the same time, Yitiao also started e-commerce. They began selling independent brands and designer products selected from mainland China, Taiwan, Japan and Northern Europe on WeChat in May 2016. In just half a month, they achieved sales of more than 10 million yuan and gathered more than 1,000 suppliers in just one month. Xu Husheng, the founder of Yitiao, said, "We want to be the mobile version of MUJI , IKEA and Eslite. This is a huge blank market."

Yitiao named its e-commerce platform "Yitiao Lifestyle Store", saying that it wanted to do what Tmall and JD.com could not do, and provide the middle class with beautiful products with taste and sense of design. Xu Husheng said that Yitiao aims to achieve e-commerce turnover of 1 billion yuan in 2017.

One is undoubtedly successful in both advertising and e-commerce, but this success can hardly be called the success of content entrepreneurship. It is more like the success of advertising and e-commerce. Moreover, the prerequisite for such success is to have a large user base and the ability to control the supply chain, which is something that ordinary PGC teams cannot learn.

Short video entrepreneurs also hope to try the reward model, but there is currently no successful precedent. Mainstream observers are not optimistic about this model, or believe that even if it is feasible, it will be difficult to become a major profit model.

For the majority of short video entrepreneurs, the real profit model they can rely on is actually to find a good MCN (Multi-Channel Network) or to become an MCN themselves.

MCN is a content intermediary below the platform and above the PGC team, which can be understood as a "short video alliance." According to data compiled by China Business Strategy (WeChat public account: hstl8888), Maker Studios is the largest MCN on YouTube , with 400 million subscribers. In 2014, it was acquired by Disney for US$500 million. The acquisition became a driving force for the MCNization of domestic short video startups.

The value of MCN lies in that it can provide a stable content output for the platform, while finding suitable platforms and advertisers for content producers, and even guide content producers to grasp user psychology. In short, under its organization, short videos can be mass-produced and consumed like commodities on an assembly line.

Because MCN is so important, short video platforms also mainly incubate short video content through MCN. For example, Miaopai has established cooperation with more than 2,000 MCN companies.

The emergence of MCN has promoted the maturity of the industry, and it has prompted increasingly fierce competition among PGC teams: the huge subsidies issued by platforms such as Miaopai and Toutiao have also flowed through MCN to those PGC teams that can continuously produce good works, presenting a Matthew effect of "the strong get stronger" .

However, even those PGC teams that are doing well have to deal with the impact of endless marketing accounts.

The so-called "marketing accounts" are pseudo PGC teams that make a living by plagiarism. These teams do not produce content, but search for short videos, film and television dramas and variety shows on the platform, and then skillfully collage them, and they can quickly produce a large number of short videos with high click-through rates . The platform is generally highly tolerant of this kind of behavior because it requires traffic, and the production cycle of the PGC team is too long. This situation makes the PGC teams who honestly make original short videos very unhappy. They complain that "these marketing accounts are more likely to become beneficiaries of platform subsidies."

Overall, the supply of the short video industry is still unhealthy. Although there are some high-quality content and industry chain organizers such as MCN have emerged, the problem of "bad money driving out good money" caused by infringement is serious, and a large number of short video entrepreneurs have not formed a healthy profit model.

It seems that the short video trend has fallen into trouble before it even started. So, can it still take off?

Do you need a reason to chase a trend?

The Internet circle is full of hot spots, and each hot spot has a set of theories.

After Papi Jiang became popular in February last year, the short video startup circle declared that "2016 will be the first year of short videos", but what really became popular later was live streaming.

The short video entrepreneurs who have been hit are not discouraged. They believe that short videos and live streaming have many similarities. For example, both are used to kill users' fragmented time and both require the popularization of smartphones. Since live streaming can become a trend, short videos must be able to do so as well.

Moreover, they firmly believe that short videos are more suitable for content entrepreneurs than live broadcasts. The reason is that live broadcasts are fundamentally a social application and can hardly be called a "content" platform. The anchors just chat haphazardly instead of creating content, and users rarely watch live broadcasts again, let alone forward them, and they are even unwilling to let others know that the most attractive live broadcasts are often full of vulgar and pornographic content. Some people simply call the live broadcast content "industrial wastewater."

Short videos are different. Because of their short length, usually less than 5 minutes, they emphasize the essence more. The content may be beautiful, full of practical information , or have sharp editing. A well-made short video can usually be widely disseminated, and people who watch the short video will also pay attention to the production team, forming a relatively strong brand stickiness.

Of course, these are just theories. When live streaming became popular, such theories lacked persuasiveness. What really makes short video entrepreneurs believe that "the wind has come" is the power of capital. In September 2016, Zhang Yiming, CEO of Toutiao, announced with 1 billion yuan in subsidies that short videos are the next trend in content entrepreneurship.

The huge subsidies from platforms such as Toutiao and Miaopai have brought comfort to short video entrepreneurs, but have not improved their situation. Under the situation of "too many monks and too little porridge", it is difficult for them to rely on subsidies for sustained development. At the same time, since many subsidies are snatched away by marketing accounts, it is difficult for them to firmly stick to originality and produce high-quality products. Some comments pointed out that a large number of short videos are often full of vulgar and pornographic content, and are not much better than live broadcasts. For example, some neighborhood short videos are full of "dirty words" that challenge the bottom line.

Hua Shangjun believes that if a PGC team does not insist on originality, quality and high taste, it will be difficult for it to stand out, and the entire industry will continue to wallow in the mud.

Most short video entrepreneurs envy Yitiao, but many people ignore how many years Xu Husheng had accumulated silently before founding Yitiao. His experience in culture, aesthetics, quality management, process management and targeted media operations were not formed all at once because of a certain trend.

If the short video trend continues to pick up, those who will rise with the wind will be elites like Xu Husheng who have years of experience in traditional media. Without deep accumulation, even if they "combine beauty and talent in one", they will only be a flash in the pan.