Analysis of competitive products of short video products

With the development of the Internet, the short video industry has become a popular trend today. The author analyzes short video products on three levels, and analyzes their past and future against the background of the "3+N" pattern.

1. Core Viewpoint

1. Competition landscape of short video market

The market has formed a "3+N" pattern, gradually shifting from competition for traffic to competition for stock.

• Douyin (MAU 450 million), Kuaishou (MAU 260 million), and Video Account (DAU 280 million) are in the first tier and are in an absolute leading position;
• Xigua Video and Douyin Volcano Edition ranked in the second tier;
• Tencent Weishi, Baidu Haokan Video and others are in the third tier.

2. The essential difference between Douyin and Kuaishou

(1) Different values ​​lead to different levels of algorithm centralization

The original name of TikTok was A.me, which means awesome me, expressing admiration for me.

The current slogan is to record a beautiful life, advocate pushing traffic to top KOLs, and use centralized algorithms to maximize the distribution of high-quality content.

Kuaishou’s values ​​are universal fairness. It has established a decentralized network, applied the Gini coefficient to balance traffic in its algorithm, and distributed traffic based on marginal utility, so that ordinary users can also get traffic.

(2) Douyin focused on operations in its early stages, while Kuaishou focused less on operations

Douyin initially invited fashionable young people from major art schools to become the seed creator group. After polishing, it began to actively invite celebrities to join and hold marketing events.

In the early years, Kuaishou did not actively invite celebrities/big Vs with their own traffic to join. The current top influencers rely more on their own marketing operations or on group traffic diversion to accumulate fans.

(3) Different tonality, different users, and different relationships between users

Tik Tok was initially targeted at young people in high-tier cities. The product’s icon, name, various filters, and music style all reveal a youthful style.

After the team tried hundreds of video software and did a lot of blind tests, they decided to use full-screen mode, which has very powerful video editing functions.

Kuaishou’s users are relatively older, with 70% coming from lower-tier cities. The tone of the users is more down-to-earth, and the content tends to be more lifestyle-related. The platform adopts a double-row waterfall flow method to give more videos exposure opportunities. Now it has added selections and can also be displayed in a single column full screen; it builds a chain of old iron relationships, and the interactions are more frequent than Douyin.

(4) Different profit models

• Douyin is suitable for platform-led public domain traffic monetization, including advertising (80%) + live streaming + e-commerce in 2019.
• Kuaishou is suitable for the monetization of private domain traffic led by influencers, including live streaming (60%) + advertising + e-commerce in 2019.

3. Why do competing products want to make express versions?

The purpose of Internet companies launching the express version is to occupy more low-end users, but there will be problems such as excessive overlap between the express version and the main APP and commercial coordination.

The express version of the App usually removes unnecessary functions and modules, retaining only the most core functions. Red envelope incentives are standard, and it is adapted to the greatest extent possible for mid- and low-end mobile phones.

4. Experience and lessons learned from the history of short video products

(1) Positioning must be clear

Tencent’s strategy for developing short videos is to cast a wide net, and Weishi, which was restarted three years ago, is at the forefront.

However, the product is very similar to TikTok and lacks innovation. Even with a lot of resources from Tencent, such as the limited-time promotion entrance of "shoot with Weishi" in WeChat and the "video red envelope" gameplay, it has not become a flagship product.

Ultimately, the reason why Weishi lags behind Douyin and Kuaishou is due to inaccurate positioning, a business team that has to adjust back and forth, and missed time windows.

(2) When you are in a weak position, you need to find your opponent’s weaknesses and compete in a different way

Seek industrial dividends under market dislocation, establish a competitive dimension that is fundamentally different from competitors, find competitors' weaknesses, attack with all your strength, and set correct indicators.

(3) Find the second growth point

ByteDance started to develop Toutiao in 2012, and short videos in 2016, launching Douyin (UGC for fashionable young people, comparable to Musically), Huoshan (UGC, comparable to Kuaishou), and Xigua (PGC, comparable to Youtube). How did ByteDance achieve the second curve?

a. There must be a main channel

After the first growth curve becomes longer and wider, it is consolidated into the main channel, which can provide traffic for the subsequent second curve.

b. Must have a core engine

The core engine of Toutiao is the recommendation engine. The recommendation engine and ByteDance's many products have a mutually nourishing relationship. After an app obtains user data, it can provide nourishment for other apps to make recommendations to users and improve the accuracy of recommendations.

c. Bottom-up diverse exploration + independence, marginal innovation + self-destruction

Based on the main channel and core engine, innovation is injected into each step, innovative products with great development prospects are independently produced, there is creative self-destruction between the first and second curves, and competition between planning subsystems.

d. Find the breaking point

In the first half of 2016, video reading volume tripled, and the annual video playback volume was six times that of 2015, indicating that the trend of short videos has arrived.

e. Breakthrough point

In 2016, three major video apps, Douyin, Volcano and Xigua, were launched. The data performance in the first nine months was very poor, but Zhang Yiming allocated more resources to continue investing in short videos, breaking through the breakthrough point.

During the 2018 Spring Festival, urban residents returned to their hometowns, and with the addition of advertising investment, the number of Douyin users soared.

In April 2018, the limit point of Toutiao began to decline, and Douyin surpassed Toutiao, achieving the intersection of the first and second curves.

5. Future Development Directions

(1) Specialization in content ecosystem construction, mid-length videos, short dramas, and Vlogs

Content is an important reason for users to stay on a certain platform. When the platform has sufficient highly specialized content and users have demand, it can consider paying for knowledge.

(2) E-commerce

E-commerce and live broadcast rewards are the main monetization methods for short video apps. Short videos/live broadcasts can connect users and sellers through anchors, cultivate a trusting relationship between anchors and users, and build a closed business loop of people, goods, and venues.

(3) Social

Social functions can greatly increase user stickiness and help companies other than Tencent break free from WeChat’s restrictions on the dissemination of short videos.

(4) Lifestyle services

Short videos are based on the geographic matching of users and offline stores, with the help of platform distribution or user search, and are expected to form a new scenario for the local life service circle, which will take a share of Meituan's pie.

(5) Product internationalization + product matrix linkage

Product innovation may incubate well-performing products and bring the company a second growth curve, and the product matrix linkage can release greater traffic potential.

2. Purpose

• Besides Douyin and Kuaishou, what other players are there in the short video market?
• What is the essential difference between Douyin and Kuaishou?
• What are the differences between the various express versions and the original versions, and what is the user overlap?
• What problems do short video products face, and what experiences and lessons do they bring us?
• What is the future development direction of short video products?

3. Competitive product selection

• TikTok 16.3.0
• Kuaishou 9.5.10.20016
• Video Account WeChat 8.0.6
• Xigua Video 5.7.4
• Haokan Video 6.9.5.10
• Weishi 8.24.0.0588

IV. Background

1. Market size

According to QuestMobile data, in the first half of 2020, the monthly active user scale of the entire short video industry reached 910 million during the epidemic. After that, the growth rate of the entire industry slowed down, and the year-on-year growth rate slowed down to less than 10%, and the overall scale declined to 850 million.

Compared with the same period in 2018, the proportion of users who installed 2 or more short video apps increased in June 2019.

2. Competition landscape

• Tik Tok, Kuaishou, and Video Account (DAU 280 million) are in the first tier and are in an absolute leading position;
• Xigua Video and Douyin Volcano Edition ranked in the second tier;
• Tencent Weishi, Baidu Haokan Video and others are in the third tier.

The market has formed a "3+N" structure, gradually shifting from competition for traffic to competition for existing stocks, focusing on improving user retention.

3. Short video user profile: popular and universal

The users of Douyin, Kuaishou, and WeChat Video Account cover people over the age of 10, and the users are gradually becoming universal and popular.

From 2018 to 2020, the proportion of users aged 20-39 has decreased year by year, while the proportion of users aged 40 and above has increased year by year, reflecting that short videos are striving to attract more middle-aged user groups.

5. Product History

1. TikTok

(1) slogan

Record a beautiful life.

(2) Product History

It was launched on September 20, 2016. It took one and a half years from its launch to reach an MAU of 100 million, and only nine months from 100 million to 400 million, making it the Internet app with the shortest time to reach MAU of 400 million, and quickly overtaking Kuaishou.

After the launch, the product was polished until after the Spring Festival in 2017, when resources were heavily invested. The excellent product data performance led Toutiao to decide to fully direct all traffic star BD promotion resources to this product.

Import KOLs in batches from Meipai and inherit celebrity resources from Tiaotiao, and carry out fan communication with KOL as the core.

On November 10, 2017, Toutiao acquired the North American music short video social platform Musical.ly for US$1 billion and merged it with TikTok.

In July 2018, Douyin launched the official promotion task ordering platform, Star Map. The Star Map platform is similar to Weibo’s micro-tasks and Kuaishou’s quick order functions. Its main function is to provide advertising task matching services for brands and influencers and collect commissions or additional fees from them.

In 2019, it became the exclusive social media communication platform for the Spring Festival Gala.

On January 8, 2020, Volcano Video and Douyin officially announced their brand integration and upgrade, with Volcano Video renamed Douyin Volcano Edition.

In 2021, Douyin became the exclusive red envelope interactive partner of the Spring Festival Gala. Its explosive growth is partly due to the fact that it was born during the period of accelerated popularization of 4G, and partly due to the fact that Douyin introduced celebrities, heavy operations, and centralized content distribution logic in its early days.

(3) Characteristics

a. Initial re-operation

Since its establishment, it has attached great importance to the active operation and management of content creators. Operating top content to create explosive products also makes it easy for users to imitate and fission.

At the beginning, we invited fashionable young people from major art schools to become the seed creator group, and took the initiative to contact the family guild of the live broadcast platform and import KOLs in batches from Meipai.

After going through the first few months of product polishing since its launch, it began to increase its efforts to invite celebrities to join, hold marketing events, etc.

Promotional events in 2017 included the release of Lu Han’s new song, sponsorship of “The Rap of China” and appearance on “Day Day Up”.

The "Creator Level System" was launched in 2020 (for creators who have opened "product sharing permissions"), and the level of influencers is determined by four factors: content quality, content influence, fan influence, and commercial influence.

b. Focus on MCN and unionization

In 2019, Douyin set up a live broadcast platform and introduced a large number of trade unions. An insider said, "The trade unions have to complete tasks, forcing these people to work longer and longer hours. If they don't complete the tasks, they can't go off the air."

c. Centralized algorithms lead to poor user consumption data

Since the second half of 2017, Douyin has weakened manual operations and strengthened algorithms.

We recommend content that performs well in terms of various indicators such as browsing, likes, comments, reposts, viewing completion, and attention. After multiple rounds of traffic pool screening, users can see popular content when they open Douyin.

d. Powerful video editing functions

Since its launch, Douyin has had a low threshold for video editing, and its special effects, props, and soundtracks are better than other products.

For example, funny AR expressions, background music includes various popular electronic music, remixes, European and American music, funny jokes, variety shows, etc., as well as elements such as filters, beauty, stickers and props, which stimulate the creative enthusiasm of video shooters.

e. The main monetization model is advertising

In 2019, 80% of revenue came from advertising, and the proportion of e-commerce is expected to expand. A high wall has been built against live-streaming e-commerce. Starting from October 2020, external links have been banned and third-party products are not allowed to enter the shopping cart of Douyin live-streaming rooms.

(4) Revenue

ByteDance’s advertising revenue reached 183 billion in 2020, and its target for 2021 is 260 billion.

Douyin’s advertising revenue in Q1 2021 exceeded 31 billion, while Toutiao’s was 9.1-9.2 billion.

ByteDance expects Toutiao's advertising revenue to be 45 billion yuan and Douyin's to be 150 billion yuan in 2021.

2. Kuaishou

(1) slogan

Embrace every aspect of life.

(2) Product History

Kuaishou GIF was founded in October 2011 and underwent a community transformation in November 2012. It took four years from the community transformation to an MAU of 100 million, and more than three years from 100 million to 400 million.

In Q1 2019, Kuaishou executives held a "Chongqing Meeting". Chongqing is an important base for Douyin, and the difference in penetration rates has gradually changed the executives' perceptions, and becoming radical is inevitable.

The “K3 Three-Person Strategic Command” was established.

• Lian Qiao (formerly head of Facebook team for many years) is responsible for technology
• Xu Xin (10 years of work experience at Tencent/participated in projects such as QQ Space, Tencent QQ, and Tencent Open Platform) is responsible for product and operations
• Ma Hongbin (formerly worked at Boston Consulting Group and Meituan Waimai) serves as the commander-in-chief, and the three of them report to CEO Su Hua.

Features such as attention streaming have been improved, and the gaming, live streaming, commercialization, and e-commerce departments have grown.

The operations department began to re-plan its business lines and expand its staff, and launched the large-screen version and the high-speed version, focusing on the sinking market with a product form similar to TikTok.

Kuaishou becomes the broadcasting partner of the Olympic Games. Starting from the opening of the Tokyo Olympics on July 23, users can watch all events of the Tokyo Olympics on demand through the Kuaishou website and app. (Jiemian News)

(3) Features

a. Inclusiveness, fairness, and decentralization

Kuaishou adopts a "decentralized" traffic distribution model, uses the Gini coefficient (an indicator that describes the gap between the rich and the poor in a country) to balance traffic and allocates traffic based on marginal utility. That is, it tends to give traffic to creators who bring greater marginal effects, suppresses extreme star orientation, and has no star list or celebrity list. Top traffic accounts for 30%.

Videos uploaded by users are tagged according to title, description, location, etc., and matched to users who meet the tag characteristics.

Compared with Douyin, Kuaishou's traffic pool has a higher fan user weight, the threshold for recommendation is lower, and user-generated content can be displayed more equally, satisfying more general content creators.

b. Strong community attributes

With a stable chain of old friends, content creators have private domain traffic. The like-to-comment ratio is lower than that of Douyin, which shows that Kuaishou users prefer to comment on creators, there are strong relationships between users, and the community attributes are good.

c. In the early stage, we did not pay much attention to operation, but started to increase the operation efforts in 2018-2019

In the early years, there was no active invitation to celebrities/big Vs with their own traffic to join. The current top influencers on Kuaishou rely more on their own marketing operations or on group traffic diversion to accumulate fans.

In the past two years, Kuaishou has strengthened its operations with creators and consciously weakened the influence of "family" talents that form groups.

• On the one hand, we began to proactively reach out to small and medium-sized creators;
• On the other hand, we will increase our efforts to invite celebrities to join us;

It has also begun to cultivate its own celebrities, such as launching Kuaishou’s first girl group KSGirls and the “Fanxing Talent Training Camp” this year.

d. The main method of monetization is live streaming, but the proportion of live streaming monetization has been declining year by year, from 95.3% in 2017 to 37.2%. Advertising business revenue has increased year by year, from 4.7% in 2017 to 37.2% in 2020.

(4) Revenue

In the first quarter of 2021, Kuaishou's revenue was 17.019 billion yuan, a year-on-year increase of 36.6%, and its net loss was 4.9 billion yuan, a year-on-year increase of 89%. The income from live broadcast rewards was 7.25 billion yuan, a year-on-year decrease of 19.5%.

3. WeChat Video Account

(1) slogan

Record real life, everyone is an independent creative individual.

(2) Product History

The internal beta test was launched in early 2020, and in February, some media and vertical KOLs were invited to join, and the internal beta test qualifications for the video account entrance and viewing functions were opened up to more ordinary users. In March, the internal beta test qualifications for ordinary users to create video accounts were expanded.

In 2020, the interface and functions of WeChat Video Account were rapidly iterated.

On the one hand, the interface and functions are rapidly improving, especially in live broadcast scenarios.

On the other hand, it penetrates into the WeChat ecosystem and connects other sectors through multiple touchpoints.

A major revision was made in June, with the top section divided into four sections: Following, Likes from Friends, Popular, and Nearby. Now the Nearby section has been removed from the top.

By the end of 2020, the daily active users exceeded 280 million, approaching Kuaishou.

The overlap rate between Video Account and Douyin users is nearly 5%, and the maximum does not exceed 10%, indicating that Video Account has captured the incremental population that Douyin has not yet covered.

On May 26, 2021, the official account opened up live streaming for the video account, breaking the boundaries between pictures, texts and videos, adding more ways to play, and allowing many video accounts to gain higher popularity.

(3) Characteristics

a. Another author identity independent of WeChat ID and WeChat public account.

b. The distribution center of WeChat traffic.

It is not an independent app, but exists in the form of a function in WeChat. It can obtain a large amount of WeChat traffic. As the traffic "distribution center" within WeChat, it not only carries the traffic import from other sectors, but also serves as a comprehensive touchpoint to support jumps to other service scenarios.

c. Synchronous development of public and private domains

Different from Douyin and Kuaishou, Video Account can truly develop simultaneously in the private and public domains, realizing the complementary advantages of social recommendation and algorithm recommendation.

Through the comparative and restrained logic of content sorting in the three major interfaces of the video account, the friend column has more social attributes, allowing users to see videos that their friends like and collect; the recommendation column is algorithm recommended, and it is more likely to see works with excellent data performance.

Externally VS Douyin and Kuaishou

In the private domain, Video Account fully taps into the relationships among friends on WeChat, allowing the content of Video Account to split through social recommendations.

• Assist with cold start of traffic in the initial stage of video accounts.
• Recommend more diverse content that other friends are interested in to users.
• In the public domain, Video Account recommends content to users based on short video content quality indicators, builds a "recommendation" page in the central square, and reaches users across the entire network.
• The recommendation algorithm of the video account does not simply emphasize pushing content of interest to users, but reduces the traffic weighting of popular content, which benefits mid- and long-tail creators.
• After reaching all network users in the public domain, guide users to settle in the private traffic pool on WeChat and feed back to the private domain.

Internal vs. public accounts and Moments

Video Account VS Official Account: Lower threshold and more emphasis on the creator’s image.

Video Account VS Moments: Closer to the public domain, closer to the content. Visitors have the opportunity to see the dynamics of creators across the entire network on the recommendation page, not limited to friend relationships. Creators have the opportunity to reach users across the entire network through public domain leverage, which is conducive to the growth of high-quality creators.

The Moments are based on people, while the Video Account is another set of public identities that can be separated from the WeChat account, allowing consumption to be closer to the content.

4. Xigua Video

(1) slogan

Give you something fresh and beautiful → light up your curiosity about life.

(2) Product History

The short video platform under ByteDance was launched in 2016. In September, it announced 1 billion to support short video creators. In June 2017, the daily active users exceeded 10 million, and the 3+X monetization plan was launched.

Million Heroes was launched in 2018, with a total of 300 million people participating.

Starting in 2020, we will strengthen the introduction of high-quality content, such as launching theater films such as "Lost in Russia" in screening rooms.

In the one year from March 2020 to date, the average monthly DAU of Xigua Video has dropped from 43 million to 34 million, showing a month-on-month decline almost every month. Questmobile data shows that Xigua Video's DAU reached 50 million in 2018.

(3) Characteristics

a. Focus on medium videos, with a duration of 1-30 minutes

The Career Development Report for Mid-Length Video Creators jointly released by Xigua Video and Xinbang shows that in the past year, the number of users who frequently consume mid-length videos has reached 605 million, with an Internet user penetration rate of 64%, which means that 3 out of every 5 Internet users frequently consume mid-length videos.

b. Spend money to attract UP hosts from Bilibili

B station’s native top UP host "Wizard Finance" and others were poached by Xigua Video.

c. The creator ecosystem is not yet fully developed

The original creators obtained through poaching have shown varying degrees of failure to adapt to the local environment, and so far there has not been a representative UP host like Luo Xiang, Lao Fanqie, and Ao Changzhang from Bilibili.

Fans on Bilibili are more valuable. The average number of fans/likes of the "Top 100 UP Masters in 2020" on Bilibili is 3.56 million/18.6 million, while on Xigua Video the figures are 1.55 million/920,000, reflecting the commercial value of creators on different platforms.

d. Incubate native content creators

Such as Mr. Li Yongle, Grandpa Amu, Captain Han and other creators of homestay and travel.

e. Rich film and television resources

At the beginning of 2020, Xigua Video spent 650 million yuan to buy "Lost in Russia". The exclusive online broadcast brought it huge traffic during the Spring Festival, but new users' consumption of "Lost in Russia" was more of a one-time consumption, and they left after using it.

"Let's go online!" The exclusive copyright of "Colorful Boys" was also acquired, but apart from "Lost in Russia", there are no other film, television and variety show IPs that have gone viral.

(4) Revenue situation <br />Not disclosed.

5. Weishi

(1) slogan

Discover more interesting.

(2) Product History

It went online in 2013, went offline in 2017, and was revived in 2018.

During the 2018 Spring Festival, Tencent Weishi distributed Weishi gift packages through the QQ Lucky Red Packet cooperation, adding millions of new users.

On April 2, Tencent Weishi released its first major update in 2018, introducing three pioneering features: video tracking, lyrics subtitles, and one-click beautification, and connecting to QQ Music's tens of millions of genuine music library. In November, it will be the title sponsor of "Tucao Conference 3".

All contestants of "Produce 101" in 2018 have settled in Weishi and opened the program voting entrance.

In January 2019, Weishi launched a new way to play video red envelopes during the Spring Festival. The personal video red envelope gameplay was launched for testing in February. The internal testing of the 30-second Moments video capability will begin in June. Problems arose in subsequent operations, and talents left one after another, leading to a gradual decline.

In April 2021, it was integrated with Tencent Video and App Store.

(3) User growth

DAU has gradually declined since reaching its peak in September 2020. It is currently ranked 134th on the free list, and DAU has never exceeded 25 million.

(4) Characteristics

a. There is a problem with positioning. After going offline and then online again, the strategy is only to contain the opponent.

It was first launched in 2013. In response to the competition from Sina Weibo, Miaopai, Kuaishou, and Meipai in the short video field, Tencent launched Weishi.

The first generation of short video platforms declined. In 2017, Tencent invested in Kuaishou and took the Weishi product offline.

Due to the rise of TikTok, Weishi was revived in 2018 and promoted in WeChat Moments. It once topped the APP free list, but later fell.

On April 15, 2021, the "Online Video BU" was established under the Tencent Platform and Content Group (PCG), integrating Tencent Video, Weishi, and App Store.

Ultimately, the reason why Weishi lags behind Douyin and Kuaishou is due to inaccurate positioning, a business team that has to adjust back and forth, and missed time windows.

b. Slow function iteration

It can be seen from the version iteration of Weishi that Weishi basically did not update its products from 2015 to 2017. In 2018-2019, more functions related to video shooting and production, as well as some basic social functions were launched.

By then, Douyin and Kuaishou had become mature short video products, cooperating with the Spring Festival Gala, developing e-commerce, and focusing on brand and social influence.

c. Integration with Tencent Video content

There is Tencent Video in the tag “Channel” at the bottom of Weishi, but there is no obvious exposure position for Weishi in Tencent Video.

d. Launch the "Mars Project" to support high-quality micro-dramas

Weishi has given micro-short dramas obvious exposure and invested over 1 billion in traffic to support micro-short dramas. Generally, for 50 episodes of content, a guaranteed income of 300,000 yuan can be obtained, and additional incentives can be obtained based on traffic.

(5) Revenue situation <br />Not disclosed.

6. Good Video

(1) slogan

Easy and rewarding.

(2) Product Matrix

Haokan Video is Baidu's flagship short video brand, including the Haokan Video independent app, Baidu App short video, Baidu search short video, etc.

(3) User growth

In September 2018, the DAU of Haokan Video reached 12 million, with an extremely fast growth rate from June 2018 to September 2018. In 2019, the global DAU reached 110 million, the DAU of independent APP exceeded 30 million, and 800,000 media organizations and PUGC settled in (2020 Baidu Mobile Ecosystem Conference). 2020.9The number of video creators exceeded one million.

(4) Product History

In 2016, Baidu Haokan was launched, with news and information as its main content.

2017.1 renamed to Haokan, more video-oriented.

In April 2017, it was renamed Haokan Video and its video playback and search functions were further optimized.

"Speed ​​Challenge" was launched in 2018, with prize money distributed among live quizzes. The short video was launched in 2018.

In 2019, Baidu teamed up with CCTV Spring Festival Gala to create an exclusive online interactive platform.

On May 13, 2020, Haokan Video and iQiyi were connected. In September, Song Jian, the former head of Xigua Video, joined Baidu and served as the general manager of Haokan Video.

On December 22, Haokan Video released a new slogan "Easy and Rewarding", building a video knowledge graph to save time and create a short video platform to solve problems for users. The platform will set aside another 1 billion yuan to subsidize creators.

(5) Characteristics

a. Backed by Baidu’s natural traffic and user data

Haokan Video relies on its parent company Baidu's natural traffic + AI to recommend and distribute content. Baidu's search portal will provide traffic support for creators, and the accumulated technical tools will provide technical support for the platform's creators in the creative process.

b. Create a video knowledge graph

The official development direction is to create a video knowledge graph to save time, and the actual perception given to users is that there is a collection under each video.

c. Subsidies for creators of general knowledge

In 2020, the platform launched the "Future Plan", with 1 billion yuan allocated to subsidize creators, focusing on "good knowledge", looking for "good stories", and digging out "good ideas".

In 2019, the VLOG Dandelion Plan was launched, announcing an investment of 500 million in cash and MCN support.

Support eight vertical categories: sports and health, food and travel, real estate and home, hobby learning, fashion and beauty, unboxing and evaluation, culture and art, and automobiles.

d. Self-made content

Self-made talk show programs: "TA Says", "Specialized for Treating Unhappiness", "Eat Well", "Cloud Travel", etc.

Self-made celebrity programs: "Cover Story", "Entertainment Without Defense", "It's Idol", etc.

At the end of 2020, it joined hands with Happy Twist to create its own IP "The Glowing Uncle".

(5) Revenue

According to the 2021Q1 financial report, Baidu's revenue was 28.1 billion yuan, a year-on-year increase of 25%, the highest growth rate in two years, and its net profit was 4.3 billion yuan, exceeding market expectations.

Baidu still relies on advertising business, with online marketing revenue contributing 64.3% of Baidu's revenue. Haokan Video’s revenue situation has not been disclosed.

6. Product iteration

1. TikTok

2. Kuaishou

3. Video Account

In 2020, the video account related functions were updated more than 100 times, and video barrage, WeChat stores, long video upload, and WeChat live broadcast functions were launched one after another.

(1) Content classification is clearer.

The first version of the video account in June 2020 has a single-column information flow divided into Following, Friends ❤, Recommended, and Nearby. In December, "Nearby" was withdrawn from the video account.

(2) Easier interaction with videos

• Support one-click collection or forwarding, single-click pause, double-click like
• The recommendation section has been changed to a full-screen immersive browsing mode, which means that the content on the video account is gradually becoming richer and the hit rate on user interests is increasing.

4. Xigua Video

The introduction of a large number of theater movies and the poaching of top creators from Bilibili have brought about user growth, but the retention of high-quality creators is worrying.

It was launched in 2016 and was originally called Toutiao Video. It initially optimized basic video playback functions.

In 2017, it was renamed Xigua Video, the barrage function was launched, recommendations were given to follow similar creators, and the Xigua Play Carnival was held, inviting video creators to participate.

In 2018, the "Millionaire Heroes" event was launched, and the live broadcast and lottery functions were launched.

Starting from 2019, original programs were launched, such as the observation quiz show "It's OK if You Don't Do Well in the Exam?" 》《Uncle's Restaurant》program, and 《Number One Hero》event.

The following changes were made in 2020:

• Content richness: Greatly improved, and brought about rapid user growth. A large number of cinema movies have been introduced, including "Lost in Russia", "Crazy Alien", "Detective Chinatown 3", "The Big Winner", etc.; together with Modern Sky's 82 all-star lineups, cloud performances have been created; in addition, documentaries, conscientious British dramas, children's songs, etc. have also been introduced.
• Function: Xigua Cinema supports membership and paid on-demand viewing, adds barrage easter eggs, live karaoke and other rich gameplay, and the audio function is online.
• Creator interaction: Continue to hold the Watermelon Play Carnival and add Watermelon University to the Creator Center.
• Brand building: Deng Chao, Yu Shuxin and Stefanie Sun joined Xigua Video. In 2021, Han Han joined Xigua Video.

5. Weishi

It was launched early, but was taken offline before being put back online again. Its positioning was unclear and the opportunity was missed.

It was launched in 2013, earlier than Douyin and Kuaishou, which was transformed into a community. It initially added some shooting and production functions.

It was basically stopped from 2015 to 2017, taken off the shelves from 2017 to 2018, and revived in 2018. The new features are mainly video production function and some basic social functions.

By then, Douyin and Kuaishou had become mature short video products, cooperating with the Spring Festival Gala, developing e-commerce, and focusing on brand and social influence.

6. Good Video

Although it was launched late, it has no latecomer advantage in terms of products and operations.

It was only launched in 2016, and its product functions mainly revolve around users rather than creators.

In 2016-2017, the newly added or optimized functions were mainly basic information flow functions, feed flow new issues, hot tags, novel push, and video support for likes and dislikes.

In 2018, it launched "Speed ​​Challenge" and short videos similar to "Millionaire", and began to optimize the shooting function. This move was later than other competitors.

The live broadcast function was added in 2019, and Kuaishou had already launched this function in 2016.

In 2020, we will support barrage and enter the e-commerce live streaming market. In general, Haokan Video was launched late, but it has no latecomer advantage in terms of products and operations. Whether from the perspective of users or creators, it does not have highly differentiated functions and returns. After 2019, it basically optimized the detailed functions.

VII. Similarities and Differences

Note: The table of similarities and differences is a combination of the Oriental Securities report and my subjective feelings

1. What is the difference between the express version and the original version?

The express version of the App usually removes unnecessary functions and modules, retaining only the most core functions. Red envelope incentives are standard, and it is adapted to the greatest extent possible for mid- and low-end mobile phones.

In August 2019, Kuaishou launched a derivative product of its main site, Kuaishou Express Edition, which adopted a promotional method of user incentives, namely watching videos and inviting friends to receive red envelopes.

A year later, the average daily active users of Kuaishou Lite exceeded 100 million.

2. What is the user overlap between the express version and the original version?

The purpose of Internet companies launching the express version is to occupy more low-end users, but there will be problems such as excessive overlap between the express version and the main APP and commercial coordination.

According to QuestMobile's 2019 data, the user scale of TikTok Express has reached 13 million.

However, among the sources, 48.3% come from the main APP, and the user overlap is high.

Only 2.6% of users of the Huoshan Video main APP come from the express version, and more users are directed to the express version by the main APP.

8. Advantages and Disadvantages

1. TikTok

(1) Advantages

a. The algorithm is industry-leading, and the centralized algorithm enables users to consume data at a high level.

Algorithms have always been ByteDance's advantage. The centralized content distribution mechanism benefits high-quality content and capable content creators (heads), ensuring that users see the best quality content when watching videos, which is more friendly to content consumers.

b. It has occupied 60% of the short video users and has abundant resources

Douyin’s DAU in 2020 exceeded 400 million, and with the Volcano version it reached 600 million.

c. Clear monetization channels

In 2019, advertising revenue accounted for 80%, with revenue of approximately 60 billion yuan. Other revenue included platform commissions, games, knowledge payment, e-commerce, etc.

d. Easy to use

A wealth of tools were provided to assist in content production in the early stage of the launch. The updates mainly added various functions, filters, props, and activities to make the content output cooler, more interesting, and more beautiful. The functional revisions strengthened the social attributes, such as adding a "friends" page for mutual attention on the homepage.

e. Operational maturity

• Lower the threshold for user creation and increase enthusiasm for content production.
• Guide the content direction.
• Dig deep into vertical content and expand product usage scenarios.

(2) Disadvantages

a. Low fan interaction

The like-to-comment ratio is higher than that of Kuaishou, which means that fans’ interactive activity on the platform is low.

b. Long-tail content is not distributed

Due to the centralized distribution logic, users passively accept content recommendations and have a high probability of seeing high-quality content, but it is not conducive to the distribution of long-tail content.

c. User growth may slow down

The overall growth of short video users has slowed down, and in the future, attracting new users will be about snatching users from other platforms rather than encouraging non-short video users to enter the market.

d. Difficult to occupy the territory of iQiyi, Youku and Tencent Video

Although strip videos and commentary videos are very common on short video platforms, with the joint boycott of long video platforms, this kind of secondary creation may be severely cracked down.

Long and short video platforms will not replace each other. It will take more time for long videos to enter the market of medium and short videos. The moats built by Douyin and Kuaishou are not easy to break.

2. Kuaishou

(1) Advantages

a. Good community attributes

With a stable chain of old friends, content creators have private domain traffic. The like-to-comment ratio is lower than that of Douyin, which shows that Kuaishou users prefer to comment on creators, there are strong relationships between users, and the community attributes are good. This lays a good foundation for e-commerce business.

b. Large number of users and long usage time

It has accounted for 30% of short video users, with the average daily usage time per person being 90 minutes in 2020. Although it has not yet made a profit, its stock price fell after the release of the 2021Q1 financial report, but capital is still optimistic about Kuaishou.

c. Mature monetization channels

Kuaishou’s share of live broadcast time continues to increase, and its live broadcast payment rate + ARPU value leads its peers.

In the six months ended June 30, 2020, Kuaishou was the largest live streaming platform in terms of virtual gift reward flow and average monthly paying users for live streaming.

Inclusive connectivity has brought about the accumulation of huge, decentralized trust capital, and e-commerce GMV has grown rapidly. In the first quarter of 2021, e-commerce GMV increased by 219.7% year-on-year to 118.6 billion yuan.

(2) Disadvantages

a. Marketing costs are too high

Kuaishou invested huge amounts of advertising and marketing expenses in the second half of 2019 and 2020, such as introducing celebrities such as Jay Chou for promotion, and continued investment in basketball, the two-dimensional world and other aspects.

This massive promotional campaign centered around user growth was the main reason for Kuaishou's sharp increase in losses in 2020.

In the 11 months ending November 30, 2020, Kuaishou's total revenue was 52.5 billion yuan, gross profit was 20.9 billion yuan, and gross profit margin was 39.9%, but its operating loss reached 9.4 billion yuan.

b. Low retention rate after the Spring Festival

At the beginning of 2020, Kuaishou announced that its daily active users exceeded 300 million, which peaked during the Spring Festival. However, according to data from QuestMobile, Kuaishou's retention rate was not good after the Spring Festival, and the daily active user curve dropped significantly.

According to Zhu Sima Ji, Kuaishou's daily active users dropped by about 50 million after the Spring Festival.

c. Tik Tok-like behavior causes chronic user loss

Kuaishou’s adjustment is to actively become TikTok-like, restrict powerful “families”, embrace the big screen and scroll up and down.

This will make it difficult for Douyin users to switch to Kuaishou, and existing Kuaishou users will feel uncomfortable.

If Kuaishou wants to narrow the gap with Douyin:

• The advantages of community attributes should be maintained
• Strengthening operations
• Strengthening the algorithm
• Enrich product matrix

3. Video Account

(1) Advantages

a. The scale of social traffic is huge, and the private domain characteristics are stronger than Kuaishou

Social relationships are built between users, not between users and KOLs. People tend to pay attention to the content that their friends are paying attention to, and the stickiness is stronger.

b. Reusable WeChat’s mature content creation ecosystem

The official accounts within WeChat have formed a mature and stable content creation ecosystem in the field of pictures and texts, and this creation ecosystem can be directly extended to the fields of video and live broadcast.

c. Closed loop of monetization channels

The infrastructure of mini program e-commerce is mature, and a closed-loop system for placing orders and purchasing has been formed.

(2) Disadvantages

a. Low average usage time per person

In 2020, the average daily usage time of video numbers is 19 minutes, TikTok is 95 minutes, and Kuaishou is 90 minutes.

4. Watermelon Video

(1) Advantages

a. There is a demand for mid-video, but there are fewer platforms.

For some users, short videos cannot meet the needs, and there is still room for development for long horizontal videos with 1-15 minutes. Currently, the main competitor is Bilibili.

b. Back to ByteDance

ByteDance has a rich product matrix that can provide Xigua Video with traffic, user data, algorithms, and content resources, making Xigua Video have certain differences from other products, and the recommended hit rate is high.

(2) Disadvantages

a. Improper operation

The top UP owner of B station, who was exchanged for a lot of money, did not have corresponding operational strategies and plans after entering the station.

b. Weak community foundation

A rich and long-tail content category can only be provided by a good community atmosphere.

c. Recommendation algorithm causes creators to be less enthusiastic

Recommending based on the number of clicks of the video and how many users' behaviors it hits on the video itself will lead to the rampant title party, which will lead to bad money driving out good money.

d. It is difficult to occupy the territory of iQiyi, You and Tencent

After "囧妈", more classic films and TV series were launched in the Watermelon Screening Hall, attracting middle-aged audiences who have moved from TV. The positioning of the medium video is slightly awkward under the attack of long and short videos.

5. Good-looking videos

(1) Disadvantages

a. Baidu has long supported DAUs that have not obtained industry-leading

In 2017, it focused on short videos, later than Douyin and Kuaishou. Baidu provided traffic and AI empowerment to Haokan Video, but did not gain the leading DAU in the industry.

b. Build video knowledge graph without letting users feel it

It is known to build a video knowledge graph, but it does not give users a strong perception, that is, there is no difference. Compared with Xigua Video, which also makes efforts in film and television variety shows, it has no advantages.

c. Absent from e-commerce layout

Although it is claimed to be joining e-commerce, Haokan Video only gives a very small entrance.

6. Weishi

(1) Disadvantages

a. DAU low

The year when Weishi was removed was a year when Douyin was rapidly rising, and the market structure had been initially established when it restarted.

b. Tencent’s support targets changed from Weishi to Video Account

On 2020.10, WeChat conducted grayscale tests on the live broadcast of video accounts, and frequently updated live broadcast functions such as rewards, continuous microphones, beauty, and lottery draws in three months. The heavy holdings of video accounts are very obvious.

2021.3, WeChat changed the rule that it could only post 30s videos on WeChat Moments to the fact that it was originally only available for posting long videos through Weishi to require a video account to publish long videos.

c. Inadequate innovation

Tencent’s strategy to focus on short videos is to cast a large net. Weishi, which restarted three years ago, took the lead. Even if it obtained a large amount of Tencent’s resources, such as the limited-time promotion portal of “shooting with Weishi” in WeChat and the gameplay of “video red envelopes”, it has not become a flagship product.

9. Future Outlook

1. Content

(1) Erchuang short videos may be strictly regulated

The first white paper on copyright protection for short videos is released. The Copyright Law will be officially implemented on June 1. Erchuang short videos include trailers, film reviews, inventory, clips, and commentary. Among them, inventory, clips, commentary and mixed-cutting have medium-to-high risk of infringement, or are subject to strict supervision.

(2) Content ecological construction

Content is the center of gravity and barrier for the differentiation of short video platforms. At present, the top content styles of each product are different. Douyin is more important than experts, Kuaishou is more important than life. Xigua Video includes film and television variety shows, knowledge, and hanghai. There are more and more good-looking videos and video variety shows.

a. Specialization

Compared with entertainment content represented by funny, life, games, and film and television, the vertical categories of education, science and technology, finance, health, and travel are still in the blue ocean.

Knowledge videos have become a must-fight place for military strategists. Bilibili launched the knowledge zone division in June 2020, and Xigua Video and Douyin launched the knowledge creator activities from October to November. After changing the handsome guys of Haokan Video, he clarified the direction of making short videos for people born in the 1970s and others.

b. Video

Whether it is a vertical screen short drama that changes online, a "comic animation" that collides with comics, or an original incubated medium-video IP, medium-video can become a new way for IP to break the circle with various interactive forms such as funny development cycle, compact plot features, and matching interaction.

c. Miniature drama

Douyin, Kuaishou and Weishi are all focusing on the micro-short drama track. Kuaishou short dramas are of small scale, including more than 20,000 short dramas, more than 2,500 series with views of over 100 million, and more than 210 million short dramas are watched every day.

At the beginning of this year, Douyin launched "Dream" starring Jin Jing! Jingjing" has received 280 million views and nearly one million fans. Weishi has launched a number of 1-3-minute vertical screen continuous micro drama brands "Mars Small Drama". We will jointly promote the development of the short drama industry.

d. Vlog

Vlog presents the characteristics of life, which is the work, and authenticity and sense of substitution can distinguish other videos. In 2019, the number of Vlog users reached 249 million.

2. Search

The content volume is gradually increasing, and search has become an inevitable choice for short video platforms. At present, once the input content is more complicated, the question will not be answered correctly. The search business of short video platforms is still in its early stages and there are technical barriers.

In addition to the difficulty of creators to ride on popularity, the maggots, originality and suppression of plagiarized content in video content are all problems that need to be faced, and the difficulty is more difficult than imagined.

3. E-commerce

According to the report of Cinda Securities, e-commerce and live broadcast rewards are the main monetization methods of short video APPs.

Nearly half of users are concerned about short video advertisements and express support for short video live streaming.

The proportion of e-commerce revenue will further increase in the future. Short videos are more likely to promote the conversion of products with low customer unit price and high repurchase rate, such as skin care and beauty, leisure and entertainment consumption, food and beverage, clothing and clothing, etc.

4. Social

Social functions can greatly increase user stickiness and help companies outside Tencent get rid of WeChat's restrictions on the spread of short videos.

In addition to launching independent social apps, Douyin and Kuaishou mainly create social functions within their respective ecosystems.

There are more ways to play Douyin. We have been online or internally tested to watch videos together, connect (1V1 random match), video calls between friends, Douyi, personal business cards, online karaokes, etc. We are targeting the fields of strangers, acquaintances, workplace socialization, etc., and are currently re-promoting chat rooms.

Kuaishou has more concentrated layout, including online chat rooms, group chats, online KTV functions, and the same city.

5. Life Service

Short videos are based on the geographical location matching between users and offline stores, and with the help of platform distribution or user search, it is expected to form a new scene in the local life service circle, and will be divided into Meituan’s cake.

Douyin began to test the waters in 2018 and has not yet been successful. Recently, "discounted group buying" has been launched in Beijing, Shanghai, Hangzhou, Chengdu and other cities, covering food, catering, hotels and homestays.

The same-city store code is a key project launched by Douyin this year. Customers can scan the QR code to receive the coupons set by the merchant through Douyin, but if customers want to get the coupon, they need to authorize the release of a store promotional video.

Kuaishou plans to set up branches in Beijing, Guangzhou, Shenzhen, etc. to effectively undertake the short video marketing needs of local brands and local merchants.

Kuaishou has added special group buying, list recommendation, and Kuaishou 517 sections on the same city channel. In addition, it has quietly opened an entrance to the WeChat ecosystem. Search for "eating, drinking, and having fun in Kuaishou" on WeChat, and you can search for Kuaishou local life mini program.

6. Product internationalization + product matrix linkage

In ByteDance's development map, in addition to its two flagship products, it has been expanding other businesses, including education, games, commercialization, and e-commerce.

In addition, it has invested in 114 companies, including content information related to its main business, investment in the social field, and potential businesses in addition to its main business, such as online education, game research and development, chips, car manufacturing, etc.

In addition to launching the overseas version of Tiktok, ByteDance has also launched the overseas version of Toutiao TopBuzz, Volcano Video overseas version of Vigo Viedo, etc.

In March 2020, TikTok downloads reached 115 million times and the number of users exceeded 1 billion.

Kuaishou avoids North America where the technology and Internet are relatively developed and competition-saturated, and aims to advance with South America, Southeast Asia, etc., and its main products are Kwai and SnackVideo.

In April this year, the MAU (monthly active users) in overseas markets further increased to more than 150 million.

10. Summary

Currently, the short video field is showing a 3+N pattern.

Douyin is centralized and is exploring the sinking market and is constantly increasing social interaction. Kuaishou has transformed from decentralization to centralization. The overlap between the two will continue to increase, and the products will gradually converge.

In addition to Douyin and Kuaishou, Video Account has great potential due to its advantages in private domains and its positioning as a traffic distribution center in WeChat.

At present, Weishi and Haokan Video are basically in a difficult state.

In addition to the video account, due to the gradual disappearance of the short video demographic dividend, it will become difficult for other short video products to grow users.

According to the Western Securities report, it is speculated that the short video industry will not dominate, at least the second place, or even the third or four, still have room for survival.

In the future, various short video platforms may continue to develop in the direction of specialization and self-operated original content, build barriers, and make their software a super giant through live broadcast, e-commerce, and local life, and take the cakes of Taobao, JD.com, Pinduoduo and Meituan.

Author: Operational Thinking Notes

Source: Operational Thinking Notes