Competitive product analysis: iQiyi and Tencent Video membership operation strategies

This article reviews the membership systems of iQiyi and Tencent Video , and compares and summarizes the product's operating strategies in three aspects: paying user conversion, paying user retention, and paying user recovery.

Article Structure

1. Overview

According to Entgroup Consulting's "2018 China Video Content Payment Industry Observation", the compound growth rate of China's video membership scale in the past three years has far exceeded the growth rate of China's Internet users. Video paying users have a broad market base and huge room for growth.

2. Product Introduction

1. iQIYI

IQIYI is a video website founded on April 22, 2010, with the slogan: Enjoy quality. iQiyi is a powerful and complete video APP that meets the entertainment needs of users.

iQiyi is positioned as "China's high-quality video entertainment service provider". Most of the videos provided by the platform are entertainment-oriented and meet the entertainment needs of users. IQIYI meets the basic and expected needs of users.

2. Tencent Video

Tencent Video was officially launched in April 2011. The slogan of Tencent Video is: Make the most of the good times. Adhering to the value of "content is king, user-oriented", it strives to highlight the differentiated competitive advantages of high-quality content and deepen emotional communication with consumers. It is a comprehensive video content platform that integrates popular film and television, variety entertainment, sports events, news information, etc., and continues to provide users with high-definition and smooth video entertainment experience.

III. Rights and interests of paying users

Both iQiyi and Tencent Video use membership subscriptions as their main form of commercial monetization. The following discussion focuses on iQiyi and Tencent Video VIP.

The core of membership subscription is that users pay in exchange for exclusive rights provided by the product, while the product obtains revenue and higher stickiness and activity of paying users. Therefore, products that make membership subscriptions need to sort out what resources or capabilities they have that can be provided to paying users in a higher value form.

1. Same benefits as paid user membership

iQiyi and Tencent Video VIP offer many of the same membership benefits, which are mainly divided into four categories: content privileges, movie-watching privileges, identity privileges, and welfare discount privileges.

1) Content Privileges

The main demand of users in the product is "I want to see the content", so member-exclusive videos are the core of member rights and interests, and are also the key to stimulating users to pay and make up for copyright investment.

VIP includes a large number of popular movies and TV shows, which members can watch for free, as well as discounts on paid movies and advanced on-demand viewing.

In 2015, iQiyi launched "Grave Robbers' Chronicles", and was the first to try the paid model in the video industry. It then successively launched "The Rap of China", "Youth With You", "Hot Blood Dance Crew" and other programs, which achieved good broadcasting and commercial results. The themes include ancient history, detective suspense, youth romance, two-dimensional, martial arts and fantasy, forming a complete content matrix to meet the viewing needs of different groups of people.

The Tencent Group behind Tencent Video has great resource advantages. From the recent "Creation Camp" and the number of copyrights of last year's popular movies, it can be seen that Tencent Video is "rich and powerful" and is bound to become the leader in the online video industry.

2) Movie viewing privileges

The main features that VIP provides to paying users include Blu-ray 1080p, download acceleration, Dolby audio and video, no ads, free movies...

Blu-ray picture quality and panoramic sound meet the needs of high-level users. These users have higher requirements and deeper love for the visual experience. Accordingly, if the product can meet their needs, their loyalty and payment amount may also be higher.

VIP can not only accelerate downloads but also download in parallel. For example, when you are out, you can download the files on your home WIFI first, so you don’t need to use data to watch them when you are outside.

No ads: When watching movies or TV shows, it saves pre-roll ads, which are at least 90 seconds long. Therefore, the no ads feature is very attractive to users.

3) Identity privilege

Identity privileges are not a necessity for users, but are intended to enhance the sense of dignity for paying users. The same features provided by iQiyi and Tencent Video in this regard are VIP logos, exclusive customer service, and celebrity meet-and-greets.

Distinguished logo: VIP displays the identity logo including the level. The longer the renewal period, the higher the level, which further highlights the status. Identity identification has now almost become a standard feature of membership products.

(Left: iQiyi, Right: Tencent Video)

Exclusive customer service: If you have any questions, you can contact customer service at any time, with short waiting time and enjoy distinguished customer service. iQiyi V5 level users can also enter the exclusive queue for senior customer service, and Tencent Video V6 Star members and above can have priority access to manual service.

Member-exclusive celebrity meet-and-greets: VIP members can participate in offline activities such as celebrity meet-and-greets and sports events, and get up close and personal with celebrity idols. Tencent V3 and V7 members can sign up first. Now is the era of fan economy. Meeting celebrities is what fans want most, and this privilege just meets the needs of fans.

4) Welfare discount privileges

(Left: iQiyi, Right: Tencent Video)

Enjoy discounts on novels, game packages, points mall, mall coupons, and more. Including digital accessories, watches, food, etc. However, whether it can have real appeal to users also depends on the comparison between the discounted product prices and those of external shopping malls.

2. Different paid membership benefits

The two apps also have their own differentiated paid membership rights, from which we can also see the differences in development and advantages between the two online video products of iQiyi and Tencent Video.

iQiyi also has sports membership and FUN membership. If users only want to watch sports or animation, they can spend less money to become a member. Tencent Video has more privileged functions targeting celebrity fan groups, as well as linkage advantages with Tencent's other businesses.

1) iQIYI

iQiyi has benefits that Tencent Video VIP does not have, including video extension and interception, participation in variety show recordings, and theater premieres.

Video extension and capture: VIP members have the exclusive privilege of 5 minutes of extended capture, which can capture wonderful clips or unforgettable plots and share them with friends. Video creators will also use this feature.

Participate in variety show recordings: experience the funny and humorous atmosphere of variety shows on site, watch the live performances of celebrities and idols up close, and it is fun and exciting to chase stars. This privilege is for users who are fans of celebrities.

Cinema premiere: Members can enjoy exclusive privileges of premiering popular blockbusters, watch movies with celebrity stars, and have the opportunity to interact and take photos with celebrity idols. This is also for fans, and partly for movie buffs.

2) Tencent Video

Tencent Video has benefits that iQiyi VIP does not have, including interactive privileges, live broadcast privileges, and game packages.

Interactive privileges: During the live interactive broadcast of idols, VIP members can enjoy exclusive limited free props and gifts for live interactive broadcasts; they can obtain corresponding heartbeats according to their VIP level and vote for their idols; and they also have the privilege of changing the star theme.

Live broadcast privileges: For paid concert live broadcasts, celebrity fan meet-and-greets live broadcasts, etc., Tencent Video VIPs can enjoy discounted movie purchases or even free viewing; during the live broadcast, you can drag the progress bar at any time to view the live broadcast history, live broadcast with multiple camera angles, and live broadcast without queuing.

These rights allow celebrity fans to better watch their idols online.

Game packages: Tencent Video provides VIP users with exclusive Tencent game packages, which include popular games such as Honor of Kings and PUBG Mobile, achieving a win-win situation of "bringing benefits to internal members" and "increasing exposure for business partners".

Therefore, considering users' film and television-related needs in other products and conducting business linkage cooperation are both directions that can be used as reference for expanding membership rights.

Summary of this section

After the above analysis, we can conclude that the rights and interests that online video products can provide to subscribing members include the following four categories:

4. Conversion of paid users

After sorting out the membership benefits of iQiyi and Tencent Video, observe and experience how the two products convert ordinary users into paying users.

Both products are working hard to increase the payment rate. The key to the operation strategy is to let users clearly understand the pain points that can be solved by membership, and use other auxiliary means to increase payment motivation and reduce payment resistance.

Non-paying users are divided into the following types: users who do not understand membership rights, users who think that the demand for membership is not high, users who are hesitant because of membership fees, and users who are unwilling to spend money on membership. The payment operation strategies of iQiyi and Tencent Video memberships are also observed.

1. Users who do not understand the membership rights

As the coverage and coverage rate of member movies and TV shows continue to increase, users have a very high probability of seeing paid movies and TV shows within the product, and the concept that movie and TV content requires payment to watch is gradually becoming known to more and more people.

However, the product still needs to provide an obvious and clear entry to help users understand membership benefits and cultivate more new and old users into paying users.

The strategies of iQiyi and Tencent Video include: increasing member exposure, displaying member privileges in one stop, and providing member service experience.

1) Increase member exposure

When you open the APP homepage and take a screenshot of the film or TV content, you will see a “VIP” logo in the upper right corner. The VIP logo is more obvious because of the color distinction.

(Left: iQiyi, Right: Tencent Video)

Categories such as movies, TV series, and variety shows are also clearly marked. And a separate VIP function page was created.

2) One-stop display of membership privileges

The personal interfaces of both products have an entrance to the membership center, which is displayed in a relatively obvious location. The purpose is to provide users with a one-stop introduction to membership rights and interests and an entrance to related activities.

(Left: iQiyi, Right: Tencent Video)

The membership centers of iQiyi and Tencent Video both list core membership privileges, promotional membership activities, popular member content, VIP help service center, member life benefits, etc., showing what only members can enjoy in terms of content, functions, discounts, etc., reflecting the value of paid services.

3) Provide member service experience

The membership service details cards for the two products do not simply list the privileges in text, but also combine pictures, jumps, and previews.

(Left: iQiyi, Right: Tencent Video)

Both iQiyi and Tencent Video provide non-members with member-exclusive film and television clip preview functions, which allows users to better evaluate the quality of films and TV shows and reduce the chance of dissatisfaction after paying.

On the other hand, just like when eating delicious food, what is more uncomfortable than "not being able to eat it" is "only being able to taste it", when watching a good movie or TV show, what is more uncomfortable than "not being able to see it" is "only being able to watch a small part", thereby increasing paid conversions.

2. Users who think that membership usage is not a big deal

Some users believe that membership usage frequency is low and demand is not high. For these users, increasing member exposure is also a solution. Of course, there are also users who do not have such a strong demand for listening to specific videos. If you can't watch the original version, just look for a pirated version.

For these users, the operational strategies that can be considered include: combining with other needs, integrating with other businesses, and meeting user needs from other aspects.

1) Combined with other requirements

Membership benefits include a number of value-added services, all of which are designed to meet as many users' film and television and non-film and television needs as possible. Among them, the non-film and television aspect that can actually motivate users to recharge is the rights and interests of the fan group.

Both iQiyi and Tencent Video have relatively mature operations in this area, especially in the ranking of various variety shows. Taking the present as an example, the most popular variety shows now include "Youth With You 2", "Creation Camp", idol interactive live broadcasts, and online performances.

(Left: iQiyi, Right: Tencent Video)

For celebrity fans, continuously and specifically voting for the stars, interacting with them, and creating hype for them are common ways to support their idols. They are also considered daily work by die-hard fans because they hope to do their best to enhance the commercial value of their idols.

Therefore, in order to meet the needs of expressing strong support for idols, members are provided with much more votes or support points than ordinary users. This privilege is just added value for ordinary users, but it may be a necessity for fan groups.

2) Combine with other products

In addition to the chart-topping privileges prepared for the fan group. In order to cover a wider range of mass users, both products have launched joint membership sales with other products, such as Tencent Video VIP + QQ Music VIP, Amazon, JD.com, Kugou, etc.; iQiyi + QQ Music Gold VIP membership is jointly sold.

(Left: iQiyi, Right: Tencent Video)

On the one hand, this joint membership is more favorable and priced more attractive than purchasing separately. On the other hand, if the user has a strong demand for the bundled product, it will also increase the value judgment of the joint membership. For example, if the user is not a loyal user of Tencent Video but is a loyal user of QQ Music, the attractiveness of the joint membership will be greater than Tencent Video VIP itself.

3. Users who are hesitant because of membership fees

In addition to not understanding membership rights and insufficient perception of value, price is also a factor that causes users to hesitate when paying.

1) First-time discount

The first-time discount means that users can enjoy a lower price in the month when they first activate their membership.

(Left: iQiyi, Right: Tencent Video)

The reason for using the first-time discount to attract users is that once users feel the value of membership privileges, it will not be easy for them to return to being ordinary users. Therefore, it is very worthwhile to attract users to pay for the first month by giving them discounts.

Both iQiyi and Tencent Video use this ultra-low price offer for continuous monthly subscriptions rather than single-month purchases, encouraging users to become retained members after a low-price trial, and avoiding users leaving after enjoying the first month's discount.

2) Price discrimination

Price discrimination occurs when a provider of goods or services charges different prices for the same goods or services.

Both iQiyi and Tencent Video use this charging standard, but NetEase Cloud Music is more "smart" in the paid membership activation interface.

First of all, iQiyi divides membership into 5 types, each with a different price. iQiyi puts the continuous annual, quarterly and monthly packages that it most wants users to choose at the forefront, guiding users to make choices through position. The 3 yuan discount for the first month is very attractive.

Tencent Video has two types of memberships. The prices are not as attractive as those of iQiyi, and the annual package that it most hopes users will purchase is placed at the end.

iQiyi provides four other types of memberships: sports membership and fun membership, which allow users to spend less money to watch some of the content; student VIP can enjoy lower prices; and star diamond can be used on VR and Kiwi TV. iQiyi has also done a very smart job in this regard.

However, only the Super Movie VIP of Tencent Video is applicable to TV full screen.

3) Marketing gifts

Marketing gifts are also a common way to increase users’ perceived cost-effectiveness of membership. Some users are reluctant to pay, but feel they are getting a good deal if they get something extra.

Tencent Video offers a VIP promotion where you can get a KFC Home God Card and a one-year Himalaya membership, while iQiyi offers a JD PLUS membership, Kugou seasonal membership, and coupons when you purchase a yearly subscription. On the one hand, it increases users' awareness of discounts, and on the other hand, it brings product traffic to cooperative business partners.

4. Users who are unwilling to spend money on membership

If users are unwilling to pay for product membership, can they be saved?

Merchants are constantly looking for channels that require less investment, and promotional cooperation with traffic-based products has become an option. Traffic-based products can use free memberships to help attract new users, and obtain corresponding returns from them, thus recovering the cost of free memberships.

1) Promotion for membership

(Left: iQiyi, Right: Tencent Video)

This kind of free membership activity can allow users who are unwilling to spend a penny to participate, allowing them to gradually get accustomed to membership privileges and cultivate their payment habits.

Summary of this section

After the above analysis, we can conclude that the following methods can be adopted by online video products in terms of converting paying users:

5. Retention of paying users

After users pay, retaining paying users is an even more critical task, because the revenue of the product depends not only on the total number of paying users, but also on the retention of paying users.

The key to promoting the retention of paying users lies in value perception, allowing users to discover, understand, and use paid privilege functions that can solve pain points and trigger excitement, so that users feel that they are getting good value for money.

In response to this, actions that can be taken include: guiding users to view complete benefits and follow official accounts, and displaying membership privileges.

1. Guide users to view complete benefits and follow official accounts

After the paid membership is purchased, Tencent Video will guide users to view VIP privileges through messages and send an email to follow the official account. The purpose of this move is to prevent users from being stimulated to pay for a certain membership privilege but not being aware of other privileges that can provide value. By guiding users to the member center to discover more privileges, we can expand users' value perception and promote the use of other privileges.

The more privileges a user uses and the more frequently they use them, the greater the probability that they will continue to pay and become a more loyal member.

2. Show membership privileges

The vast majority of users are stimulated to consume by content, and a few are attracted to consume by free videos, Dolby sound effects, and higher-definition picture quality.

iQiyi and Tencent Video have marked these member-specific features. When members discover these privileges while watching movies, they will try to use them and will feel that the membership is worth the money afterwards.

3. Summary of this section

After the above analysis, we can conclude that online video products can adopt the following methods to retain paying users:

6. Recovering paying users

There may be many reasons why paying users stop renewing their memberships, such as believing that the value of the membership is less than the cost, switching to other products, changes in interests, etc.

Judging from iQiyi and Tencent Video, the products can do the following: membership resources expire and membership levels decrease.

1. Membership resources expire

IQIYI and Tencent Video have strong control over content resources. Even if users download VIP movies and TV shows to their local computer during the membership period, if the membership expires, the downloaded member movies can no longer be watched.

2. Membership level downgrade

Tencent Video and iQiyi both have a level growth system. Paying users can obtain a certain growth value every day. At the same time, once the user stops renewing, the user level will gradually decline. The higher the level, the more benefits you get, but the benefits obtained by VIP may only be effective for a small number of users who care.

3. Summary of this section

After the above analysis, we can conclude that online video products can adopt the following methods to regain paying users:

VII. Conclusion

For the video industry, content is king and must be the biggest reliance. After all, users, especially paying members, are content-oriented. Wherever there is attractive content, you can gain more users.

With the rapid development of video payment, there are more and more paying users, and non-paying users enjoy fewer and fewer rights. The problem exposed in the "advanced on-demand problem" is that if the platform does not try to raise prices and its profits are insufficient, big problems may arise; if the price is raised, most users cannot accept the fact that they have to pay to watch movies after purchasing a membership.

On June 2, 2020, the Beijing Internet Court pronounced a verdict on a member’s lawsuit against iQiyi for advanced on-demand viewing of “Joy of Life”. The judgment stated that the act of advanced on-demand viewing constituted a violation of the law and a breach of contract, and the defendant was required to provide the plaintiff with the VIP membership benefits that the plaintiff originally enjoyed for 15 consecutive days, and compensate the plaintiff for notarization fees of 1,500 yuan, and the plaintiff's other claims were dismissed. This hot search has caused a huge discussion. Although the public is strongly opposed to the "advanced on-demand" behavior, the author believes that "advanced on-demand" will continue to exist in major online video apps.

There will be more areas worth our continued observation in the future paid user operations of iQiyi and Tencent Video.

Author:7mmmml

Source: Product 7m