Traffic, winners, paid future... this year of content entrepreneurship!

The top picture of this article is Luo Zhenyu, the speaker of Luoji Siwei

This content entrepreneurship boom, which has lasted for more than a year, is driven not only by the process of traffic redistribution, but also by the fact that this process can create conditions for the birth of new business models. Such imagination space is enough to make the winners of the content entrepreneurship army the first wave of beneficiaries of consumption upgrading.

The value of "content" traffic has been repositioned

When looking for the origin of the current wave of so-called content entrepreneurship boom, we can hear many different opinions, such as capital looking for outlets, industrial structure adjustment, talent outflow due to media transformation, etc. In fact, this wave of enthusiasm can, to some extent, be seen as the result of content being repositioned in the market as a cost-effective traffic carrier.

First, the Internet's competitive landscape has given rise to prosperity and freedom in the content industry.

The change in distribution methods is ultimately a matter of gaining and losing discourse power. The strong production of content based on the attention economy can achieve a more favorable result in negotiations with channels than before. The increase in choices is the fundamental reason.

If we simply view the domestic Internet as a pyramid structure, the bottom layer is the basic entrance formed by BAT, the middle layer is the secondary entrance mainly composed of various vertical fields and different media forms, and the top layer is the content. We will find that the current content entrepreneurship boom can be said to have been "previewed" once in the PC era 10 years ago: Douban was founded in 2005, Sina Blog's traffic jumped to the top of Sina's channels in 2007, and the heavy snow and the Olympics in 2008 promoted the rise of the "photographer" group, and so on.

But at that time, it was still dominated by UGC, capital was not optimistic, creators were unprofessional, and tools were not powerful, so the tide receded.

Entering the so-called mobile Internet , a melee broke out among the apps that wanted to become the new basic entrance, and finally WeChat won. During this stage, WeChat public platform and Weibo have both made moves to curry favor with content creators, allowing the latter a certain degree of freedom, but the richness of the media is actually not much higher than that of the PC era.

Moreover, after the scale effect, the cost of attracting content producers on these two platforms dropped sharply. At that time, "not being able to eat meat but having to stay" became a true reflection of the mentality of many content creators. In a traffic distribution system that lacks sufficient secondary entrance competition, the accumulation and release of content value is actually severely restricted.

(The periodic intensification of competition in secondary portals is the basic condition for the prosperity of content entrepreneurship)

The opening whistle for the second half of the mobile Internet has sounded, the competition for secondary entrances has intensified, various vertical communities, audio, short videos , and live broadcasts have emerged one after another, and the freedom of content creators and the prosperity of the industry have increased accordingly. The so-called content brings its own traffic, which is based on a rich choice of distribution channels.

Second, the cost of traffic itself is rising.

The history of the development of the Internet in China is a history of players seeking monopolies at various levels, large and small: after monopolizing the most basic resources (traffic) to become the so-called entrance, they then go on to reap the profits from value-added services brought by their respective business models. As the value of the latter increases, it in turn pushes up the price of traffic, and the resulting Matthew effect allows entrances at all levels to reap profits.

Once the competition for secondary entrances starts to heat up, the consequence is likely to be that the gaps in various channels at this stage will be quickly filled. In addition, as the incremental mobile Internet traffic is indeed drying up, it is natural for costs to rise.

Previously, Mr. Zuo Zhijian wrote an article titled "Xiaomi has fallen from its pedestal, and mass entrepreneurship has come to an end." The article pointed out the fact that the originally relatively cheap online traffic costs have begun to approach the level of offline traffic costs after a sharp increase.

(The cost of acquiring customers for APP has already exceeded the single-digit era a few years ago)

As the foundation of Internet commerce, changes in traffic distribution methods have become the engine driving changes in the entire industry landscape. Many secondary portals that are still fighting to prove their value and status have had to turn to competing for content, a low-cost traffic carrier.

For traditional enterprises, due to the fragmentation of channels, the cost of acquiring users through so-called high-quality content has begun to be much lower than that of acquiring users through traditional Internet methods. Many of them have to invest their expenses in these highly produced contents; Wanda’s announcement that new media investment must account for more than 70% of its total marketing expenses is an example. The follow-up injection of online and offline corporate resources and capital has rapidly expanded the wave of content entrepreneurship.

(Based on the advertising clients of Mi Meng , Liu Shen Lei Lei, and Wang Zuo Zhong You, the investment of online and offline enterprises is basically the same)

Third, it is the counter-cyclical nature of many contents themselves, coupled with the "cliché" consumption upgrade.

Now that everyone is no longer shying away from the L-shaped economic cycle that we are about to face, the content industry, represented by a large number of sub-sectors such as entertainment, sports, etc., will naturally be "infected" with counter-cyclical characteristics along with these sectors.

The economic slowdown is only one aspect of the problem. On the other hand, years of sustained rapid economic development, accompanied by factors such as changes in the population structure, have brought the content industry itself an opportunity period for consumption upgrades.

But whether it is the L-shaped cycle or consumption upgrading, not all broad content entrepreneurship fields are beneficiaries. The so-called "right time, right place and right people" may seem to be effective only for two major content areas at the moment: subculture content and top content that tends to be in the popular culture field .

Subculture under consumption upgrade

The subculture content here is a relatively broad concept. Simply put, it is the content of "defining oneself to distinguish oneself from others". Under this concept, celebrity fan economy can actually be regarded as a subculture. At present, most content consumption can only be attributed to users' hobbies, lacking a core cultural symbol, let alone higher-level values, etc., but subculture is an alternative.

"Consumption upgrade" is becoming a big basket that seems to be able to hold all kinds of phenomena. But when it comes to subculture, there is indeed a significant correlation between changes in consumption structure caused by economic and social factors.

Let’s first take a look at the general relationship between the development stage of the otaku subculture in neighboring Japan and its national economic development.

(The relationship between the generational change of Japanese otaku culture and the development of the national economy and changes in consumption proportion)

As can be seen from the chart, the replacement of the first four generations of Japan's so-called otaku culture generally occurred at the nodes where the proportion of re-education and entertainment expenditures gradually increased from 7% to 10%. I believe this is no coincidence.

The reason why Japan can become our best reference case is that it has many similarities with the domestic cultural market: for example, the market is relatively inward-looking, and the large population size can form a consumption base sufficient for the survival of local segmented cultural communities; cultural accumulation has become deeper year by year, but for quite a period of rapid economic development, there was no strong external export capacity (the large-scale export of Japanese anime and games began around 1985) .

The reasons why subculture has been able to successfully realize its commercial value in China in recent years are due to the following aspects:

1. The mentality foundation of subculture is changing

Sometimes, what can truly determine the rise and fall cycle of an industry, in addition to the coordination of platform tool elements at the time, is often more decisive than public psychology.

When talking about subculture, one word that comes to mind is inevitably minority group (identity). In the past, this identity mentality provided individuals in subculture groups with more of a sense of "belonging", and the small circle was more like their "reservation", which sometimes they even did not want to be known by their elders or outsiders. But now, the "reservation" has become the "starting point" for subculture people to embark on a journey to show their "superiority" to the outside world. Grasping this mentality is the basis for understanding other changes.

2. Internetization of related industrial chains

On the one hand, content consumption has been completely networked. On the other hand, the process of Taobao e-commerce influencers growing from individuals to large-scale celebrities in recent years has also educated many manufacturers, allowing the back-end product supply chain needed for today's subculture business to be networked, which is the material basis for its easier monetization.

3. Online communication methods and channels enhance the stickiness between subculture groups

If the subculture circle is weak, even if users stick together they can only support small, unorganized and inefficient traffic. Such a traffic scale cannot meet the return needs of content producers who are the core of the group. However , the highly evolved online communication methods have, on the one hand, greatly promoted the internal stickiness of the circle, while giving users enthusiasm and reorganizing the organization and order of the circle. On the other hand, by building high-frequency scene synchronization and participation, more commercial monetization opportunities have been found. If the subculture community is vertical enough, users' demand for related products can be described as "devout".

(The fan organization form in the fan economy has the characteristics of a highly subcultural group, and the mobile Internet strengthens the relationship between them)

4. The transformation and extension of subcultures have expanded the population base

Any subculture is heavy-tasting when it is born, but in the process of dissemination dominated by factors such as the spirit of entertainment, it is constantly transformed and becomes closer to the public. It is also quickly transplanted and "possessed" into real-life characters in some hot events (such as the various "CP" teams that frequently appear in the Olympic arena) , becoming an outlet for certain emotions and involving more people in related content fields through the Internet.

This extension has certainly reduced the concentration and significance of the original subculture, but it has also given these contents the impetus to reach a wider range of users online. Whether it is brand marketing or the possibility of rising to the so-called IP in the future, it ultimately cannot avoid the spirit of Internet entertainment.

5. Subculture and IP

IP and subculture have an almost natural connection - IP diehards often have subculture attributes, and the subculture formed around IP is often the source of future successful IP.

Why are many subculture contents that we think are not good enough also dug up by capital and packaged as IPs? This is because they believe that the irrational consumption caused by the target audience can to some extent cover up the lack of quality. In addition to capital, the enrichment of media forms has also created new ways of monetization. Ultimately, some IP-based subcultural content can be monetized through value-added, movies, games, e-commerce and other business methods.

Of course, the decline in the box office of IP concept movies this year is also a phenomenon worthy of attention. If we blindly IP-ize subcultural content for quick success, we may only be able to shake up the basic market in the future.

6. Subculture consumption begins to reflect on brands

The last factor is that the consumption of subculture groups is truly reflected in brands. At first, subculture groups independently searched for brands and gave the brands the meanings they thought. Now, more and more content, designs, fashion brands, etc. are beginning to actively cater to subculture groups.

Vigorous head content

Another obvious winner is the top content in the mass field.

There are too many players entering the content supply system. The report of Hongtai Fund mentioned that the number of WeChat public accounts is 23 million. Even if most of them are just for fun, the number of players who are interested in participating in the competition for traffic distribution is still very large. But everyone knows that most of them can only become cannon fodder . Moreover, the experience of the past year has also proved that " the long tail theory does not work in business at the moment , and the head is still king."

How did the long tail theory fail?

In theory, the Internet can bring about the long-tail effect by reducing the indexing cost of information. However, the current content sector faces several problems, which further reduce the probability of the general public consuming long-tail content by chance:

First of all, it is the decision-making mentality of most users when consuming content. Given their limited attention, they are naturally easily attracted to top content with higher traffic.

The second is distribution. As mentioned in "Link", social networks are prone to nodeization during communication. The current distribution method represented by WeChat relies too much on the communication of social chains. As the behavior of many users on WeChat has gradually shifted from the earliest "acquaintances-backstage" mode to the performative "public-frontstage" mode, the herd mentality has also "kidnapped" users' forwarding choices to a certain extent. These are all beneficial to the header content.

How powerful is the current head content?

Without exception, those who have obtained financing in each sub-sector belong to the top content whose data from Xinbang is far better than that of its peers.

(Number of self-media teams that received financing in each segment)

Even the emerging live streaming field has been quickly taken over by top content. Yizhibo previously disclosed a very convincing set of data: they had an average of 111,000 live broadcasts per day in Q2, watched by nearly 7.8 million users. However, the top 1,000 venues attracted 90% of the users.

For most participants, content entrepreneurship is simply a race to the top .

Competition on the Internet is essentially a division of user time and behavior. To win the game, you can only continuously and stably provide benefits that other companies do not have - psychological feelings, personal connections, and valuable information. Corresponding to the top content, it can be simply summarized into three types: entertainment, social, and tools.

Therefore, the ways to run faster than your peers can be divided into two types: one is to create content consumer products that are highly relevant to the public's life and emotions, and are more entertainment-oriented. Being at the top of this category at least means that the team’s income is sufficiently guaranteed, and there is also the possibility of making payments in the future by binding with the fan economy.

The other type is content with social and tool attributes.

At present, the value of the entire Internet industry is shifting and spreading to areas that are closely related to traditional industries. The production capacity of a single media will always be limited in scale. When the data of this type of entrepreneurial team is rising, it is best for them to integrate with related industries as soon as possible. This combination will bring about differentiation in the form of content products. Once the differentiation reaches a certain level, the resulting ability to screen users and industry influence will be very attractive to capital.

As for the phenomenon that some video PGCs are not well received on several platforms, some people are discussing how long the profitability of top content can last. I am personally more optimistic –

The "collapse dividend" of old channels brought about by the disintegration of traditional channels (mainly television) into new media can continue for some time. This dividend is reflected in multiple aspects such as traffic and talent. In any process of alternation between the old and new orders, the value of the party regarded as a potential role player will inevitably have a premium. As ideal successors, the top content companies will therefore be able to obtain a wave of incremental resources.

In addition, there are still some platforms that are still in the bonus period. The cold reception of some PGCs may only indicate that the traditional distribution method has indeed encountered a bottleneck.

My recent personal experience is that there are obviously more entrepreneurs who come from TV stations and those who can make documentaries. I believe they are here to join this wave.

(From the perspective of user choice, TV as a media channel has not yet hit bottom)

Well-known investor Fan Weifeng’s view on the ceiling of top content is that “it has not yet significantly surpassed the level of traditional media’s peak in the past.” Capital will enter into growing industries on its own, and their confidence in the growth potential of top content is undoubtedly an important factor in prolonging this wave of enthusiasm.

So to put it simply, what kind of content is most likely to be more competitive in the future?

1. There are obvious upgrade trends and demands for the target audience.

For example, there is a clear trend towards professionalization among people working in the catering industry, so we have seen that insider information for restaurant owners and guides for shopkeepers are all trying out training. It is important to be able to respond quickly to trends; the trend towards professionalization will intensify users' pursuit of professional content, which is also good for the team that builds the brand first.

2. Enter the segmented value areas in the large market with new approaches.

For example, a project specifically targeting youth football training may start by focusing on coach training. Football is a huge market as a source of capital inflow, but few people think of focusing on youth training, a relatively unnoticed link (behind the youth training targets are parents who are willing to pay) . People who are familiar with sports know that youth training may have been relatively "dark" in the past. Using the Internet to make it transparent and improve efficiency is a good choice.

3. The upgrade of media form can bring breakthroughs in experience.

The best example in this regard may be "Yi Tiao", which, on the basis of ensuring strong production capabilities, uses a form of expression that is higher than the original graphic content to raise the threshold for users to consume content.

The future of paid content?

Since 2016, the major events and products that are more or less related to content payment include: live streaming, Fenda , and the rumored WeChat paid reading.

Let’s talk about live streaming first.

Historically, technological progress and iterative development of media have, to a certain extent, come at the cost of “eliminating” part of the user’s imagination. However, if the incremental experience a medium brings to users continues to be smaller than the imagination space it eliminates, it will not be able to retain users for long.

(The evolution of media comes at the cost of destroying part of the user's imagination)

Judging from the current situation, before the technical threshold of AR and VR is lowered, live streaming is likely to be the last form of content dissemination to emerge. ·

However, unlike other previous forms, live streaming currently lacks the maturity that an industrial chain should have – it is difficult to retain users on the demand side, while there are typical content output stability issues on the supply side. These issues make it more likely that it will play a tool role in the future.

Let’s talk about the answer.

When Fenda became popular, some people shouted that knowledge payment had really begun, but this illusion was soon broken by the fact that internet celebrities and users began to peddle topics with obvious privacy implications. Its payment behavior was only due to the extreme utilitarianism of the product dissemination mechanism rather than a real willingness to pay for the content.

(Luoji Siwei has expanded the possibility of paid content for some top content, but the prospects for paid content remain unclear. The data in the above figure was compiled by Weibo user @怪木西西)

Whether it is live streaming or Fenda, they have successfully solved the problem of product dissemination momentum during the development process. But another thing they have in common is that the profit-making processes they designed for ordinary users are not enough to retain users for a long time.

Then there is the legendary WeChat content payment.

Content payment from users should be what most content creators want to see. Once a carrier like WeChat is launched, it will definitely create huge waves in the industry. But if this is to come true, WeChat must face the following points:

First of all, if content is really paid for on WeChat, it will definitely bring economic benefits to the top content creators in the content entrepreneurship community in the short term. But in the long run, a decline in its number of fans and reading volume is almost inevitable;

Secondly, although both payment and reward are acts of paying money, they occur before and after content consumption respectively. The logic of the two is that reward is based on the recognition of the author, content or the values ​​behind the content, while payment is based on the user's high trust in the "value" of the content before the lid is opened (excluding the so-called "support" of the charming personality) ;

Third, how should the sharing mechanism be designed after content consumption is completed? Almost all sharing mechanisms on the Internet that are related to payment are essentially designed to attract more user consumption. Models set up for this purpose, such as semi-sharing and quota-grabbing reading, will more or less inhibit the efficiency of content flow. Any product design that hinders the efficient flow of content on a social platform will ultimately not have very good results. Weibo’s paid reading is actually a lesson learned. All of the above mentioned are actually somewhat contrary to WeChat’s own restrained positioning of only distributing traffic and emphasizing openness.

(In the New List survey, although 30% of content entrepreneurs have income from content payment, the average income from this item is still the lowest)

In fact, whether it is Fenda, WeChat or any other product, if you want to provide paid content on mobile devices, you must overcome the problems faced by so-called fragmented reading, such as insufficient scarcity of quantity, inefficient consumption process, and insufficient systematic effects.

But I believe that no matter what the fundamental purpose is, it is always possible to pay for quality and efficiency. However, in the content industry, the majority of users need to establish a trusting relationship with the content and are willing to pay a premium for it.

The value of the Internet is shifting from its early tool attributes to content. This process will sooner or later create conditions for the birth of new business models, and the new models will eventually cover and replace the old models step by step.