Stories can't save Zhihu

Zhihu, a question-and-answer community launched in January 2011, is undergoing a transformation from "Bihu" to "Bianhu" in the eyes of netizens.

Zhihu was once famous for its high-quality questions and answers, and its elite community style was often ridiculed as "pretentious", while other online platforms could attract traffic simply by reposting highly praised answers from Zhihu. Take Weibo for example, from 2014 to 2016, marketing accounts such as "Zhihu Uncle", "Zhihu God", and "Zhihu Sister" started out by posting unauthorized highly praised answers from Zhihu, and one account could gain millions of followers in two or three months.

There are still many people who copy and paste content, but the hot topics they copy have become new stories. For example, so-called works such as "I am a Vicious Female Supporting Character", "I Married a Eunuch", and "My Fiancé Returns with a Woman" can attract readers because of their eye-catching titles and bluffing beginnings. When searching for "Zhihu" on Xiaohongshu, half of the popular notes are recommendations for Zhihu online articles, and the other half are tips on how to make money by writing online articles on Zhihu. Zhihu has become a storytelling club.

The change has been reflected in Zhihu's revenue. According to Zhihu's third quarter financial report for 2022 released on November 30, 2022, during the reporting period, Zhihu's revenue was 912 million yuan; among the five main sources of income listed in the financial report, paid members contributed 335 million yuan, accounting for 36.8% of the revenue, surpassing the other four items, namely advertising, content commercialization solutions, vocational training, and others, and ranked first.

Users who know Zhihu are all aware that the core driving force behind the growth of Zhihu's paid membership revenue is precisely these made-up stories. As for reading clubs, live lectures, magazines and other products, they were not very shining when they were in their heyday, and their role now is even more insignificant. Of course, users will also leave comments and praise under the novels they approve of, for example, they will say that this is what the distinguished Yanxuan members should read.

The existence and penetration of stories have caused Zhihu's reputation to continue to decline.

A user who has used Zhihu for more than 3,000 days published a popular article titled "I love Zhihu, but we can't pretend nothing happened" a year ago, which touched on some of the problems. The article talked about the reasons why many old users left Zhihu, saying that Zhihu inserted paid novels and forced videos into answers, and changed the user homepage from "follow" to "recommend", which was what Zhihu needed for data, but not what users liked.

The bigger problem is that these stories are unlikely to open up a truly broad world for Zhihu that faces the future.

Taking Zhihu's third quarter 2022 financial report as an example, behind the paid membership revenue of 335 million yuan, content commercialization solutions, advertising, vocational training, and others ranked second, third, fourth, and fifth in Zhihu's revenue contribution, respectively 265 million yuan, 197 million yuan, 78 million yuan, and 36.33 million yuan.

As we all know, Zhihu's advertising and content commercialization solutions actually belong to the category of broad advertising, except that the former is hard advertising and the latter is soft advertising. In the third quarter of 2022, the combined revenue of the two was 462 million yuan, 127 million yuan more than the paid membership revenue. In other words, although the paid membership revenue and proportion have both increased, Zhihu's main revenue source is still broad advertising.

According to the prospectus and financial report data, Zhihu lost 1.004 billion yuan, 517 million yuan, and 1.299 billion yuan in 2019, 2020, and 2021, respectively, and lost 1.399 billion yuan in the first nine months of 2022. Now, whether it is broad advertising or paid membership, it is difficult to solve Zhihu's deep-seated dilemma, and their growth has even exacerbated users' voting with their feet.

Zhihu, which changed its new slogan to "Where there is a question, there is an answer" on the eve of its listing on the New York Stock Exchange, has still not found an ideal commercial answer for itself as it is about to bid farewell to its 12th anniversary of its entrepreneurial history.

The community atmosphere has been greatly diluted, and the sub-businesses under the revenue category are full of strong competitors. At the expense of the flagship product, Zhihu has entered a field that it is not good at in exchange for profits, and the profits are not rich. Zhihu's problem is obviously not just about focusing on one thing and losing another, but also about losing sight of the main thing. If this is still considered an attempt on the road to success, then under the pressure of losses, Zhihu has little time left to try.

01

Members rely on stories

Compared with the copyrighted content such as movies, TV series, and animations on video platforms, Internet communities that are mainly based on pictures and texts often lack the differentiated advantages that make users pay for membership.

Information on the official website shows that the current monthly subscription for Zhihu Yanxuan members is 19 yuan, and the annual subscription is 198 yuan; the monthly subscription for Bilibili members is 25 yuan, and the annual subscription is 168 yuan; the monthly subscription for iQiyi, Youku, and Tencent Video are 30 yuan, 25 yuan, and 30 yuan respectively, and the annual subscription is 248 yuan, 258 yuan, and 198 yuan respectively.

Video platform users are willing to purchase memberships to remove lengthy ads and watch exclusive content, but many ads on graphic platforms are not as direct as those on video platforms, and the value of exclusive content is difficult to verify. After the trend of paying for knowledge has long gone, Zhihu has chosen a text payment model that has been verified on a large scale, that is, online literature. In layman's terms, stories.

Zhihu used to suffer from stories. After opening registration in 2013, the threshold of Zhihu has been lowered as it has become more popular. Traffic naturally favors simpler, more interesting and more exciting content. In addition, users will do anything to gain exposure, so it is not uncommon to make up stories. Extreme cases are "Children's Rhymes" and "Pirate King Luffy".

In 2016, "Tong Yao" defrauded other Zhihu users of more than 100,000 yuan by fabricating an identity, female photos and chicken soup answers; "Wang Lufei" played more than 200 roles in 2017, and his experiences in answers included digging Ganoderma lucidum, serving as a special forces soldier, taking the top science exam, and working at Google.

Zhihu claims to "share your knowledge, experience and insights with the world", but taking "experience" as an example, the platform and users have no way of distinguishing the authenticity of "experience". "Thanks for the invitation, I'm in the United States, earning a million dollars a year, and just got off the plane" has gradually become the standard for Zhihu. The platform soon found that it was better to seize the traffic code openly rather than cover up and crack down on storytelling.

In April 2019, "Mengwa" wrote an answer to the question "Why do concubines in the harem have to compete for favor" in the form of a palace fighting novel. This article "Palace Wall Willow" set a precedent for Zhihu online articles to go viral. Previously, "Mengwa" answered more than a dozen questions, and the number of likes for each question ranged from dozens to thousands. As of the time of writing this article, "Palace Wall Willow" has received more than 440,000 likes and nearly 23,000 comments.

Similar to "Palace Wall Willow", there are "Washing the Lead" and "Walking and Stopping". These three novels are called "Zhihu's Three Cruel Articles" by netizens. They are so popular that film and television companies have purchased their copyrights for filming. This also opened up operational ideas for Zhihu. At the end of 2019, Zhihu launched a story contest and vigorously increased the number of online articles. Originally, "Zhihu, share your newly made-up story" was just a satire by users on the phenomenon of fabricating experiences on the platform, but it unexpectedly became a true portrayal of it. Since then, many online articles have begun to be filled with questions related to experience.

Users ask questions to see other people's life experiences for reference, but now when they click on the answers, they often see "Creation Statement: The content contains fictional creations." Most of the member salt-selected content mixed in the answers is long and can easily occupy the entire screen of a computer or mobile phone. Users need to scroll down for a long time to see other content. In the recommendations of the salt-selected column, the vast majority of the top articles are also of this type of online articles, such as "The Beautiful Female Lead, Winning Online" and "The Night of the Demon".

Judging from the speed of monetization alone, the road of online literature seems to be very smooth.

Data from the prospectus and financial reports show that in 2019, 2020 and 2021, Zhihu's paid membership business revenue was 87.99 million yuan, 320 million yuan, and 669 million yuan, respectively, accounting for 13.1%, 23.7%, and 22.6% of the total revenue in the same period; in the first nine months of 2022, the revenue from this business has reached 828 million yuan, accounting for 33.3% of the revenue.

When all kinds of fictional emotional stories such as sadomasochism, infidelity, and revenge are squeezed into the answers that should be objective and serious, the discussion atmosphere no longer exists. Over time, it is not difficult to imagine what the community ecology will look like.

The experience has deteriorated and old users have left, but this does not seem to hinder the complacency of Zhihu's management, especially its founder Zhou Yuan. In August 2022, after the number of paying members exceeded 10 million, Zhou Yuan published an article in his Zhihu column titled "12 Years, Midway and 10 Million Yanxuan Members", emphasizing that the membership business has gone from loss-making to self-sufficiency to feeding back to the community, which will make the community ecology stronger.

In the comment section of this article, a user from Shanghai sent the most likes: "Can you please stop bombarding our valued Yanxuan members with low-quality online articles?"

02

Advertising

By gathering professional answerers to create influence, Zhihu has taken the first step in building a high-quality content moat, and gradually gained a place in the domestic Internet industry due to its uniqueness.

However, the integration of the question-and-answer ecosystem into online writing undoubtedly goes against the previous community tone and means a head-on confrontation with old players such as Yuewen, iReader, and Jinjiang. This in itself has left many users scratching their heads, not to mention that the free and paid models in the online writing industry are still in the game. Free online writing products such as Tomato Novels and Midu Novels are very popular, and their survival rule is still the advertising logic of "the wool comes from the pig". It is easy for Zhihu to lose both the wife and the army.

The advertisements listed in Zhihu's financial report include hard advertisements in the opening screen, information flow, banners and other locations, while the content commercialization solution is soft advertisements that embed brand copy and product links in answers. Zhihu launched "Zhi+" in 2020, which is similar to Douyin's "Star Map" and Bilibili's "Fireworks". Its role is to act as an intermediary between brands and creators, promote transactions, and collect transaction commissions.

If a certain answer is considered to be of high quality and suitable for brand placement, the brand can directly cooperate with the original content; if targeted original content is needed, the brand can also issue tasks and invite creators to write on the topic. "Zhi+" content generally appears in high-traffic locations such as "Homepage Recommendation", "Next Answer", and "Recommended Search".

Broad advertising has always been the basic plate of Zhihu's commercialization, among which the growth curve of soft advertising is particularly prominent. In 2019, Zhihu's hard advertising revenue was 577 million yuan, and soft advertising revenue was only 640,000 yuan; in 2020, hard advertising revenue increased to 843 million yuan, and soft advertising revenue increased to 135 million yuan; in 2021, hard advertising revenue was 1.161 billion yuan, and soft advertising revenue was 974 million yuan; in the first nine months of 2022, the two figures were 652 million yuan and 828 million yuan respectively.

Over the years, it has become quite common for domestic graphic and text Internet communities to use advertising as the main monetization model. It should be said that although hard advertising disturbs users, everyone knows that this is the cost of being free, and these ads have nothing to do with the style and quality of the content, and they do not interfere with each other. However, soft advertising is different. It is necessary to fully penetrate into the content.

Unlike the grass-growing community Xiaohongshu, Zhihu used to claim to be rational and objective, and users had to clearly indicate their "conflict of interest" when answering questions. However, now more and more answers are directly turned into advertisements, so it is normal for users to be disgusted.

Some users have found that questions about brands often quickly gather a group of neatly formatted answers, as well as some reviews and comparisons, which end with product links. Users spend time and energy reading from the beginning, but as they read, ads pop up, and their trust collapses instantly. This sense of disillusionment is not only directed at the answers or the answerers, but also at the platform.

According to Haike Finance, the areas where Zhihu's content commercialization solutions, or soft advertising, perform relatively well are mainly 3C digital, e-commerce, education and training, etc., because they are closer to commodities and transactions. The presence of a large number of soft advertising in these areas has greatly reduced its credibility in the industry.

The Zhihu account "Blue Immortal" with 226,000 followers is said to have sold more than 50 million yuan worth of goods in 2020 with an article with product links, making him the so-called "No. 1 seller on Zhihu". However, according to Haike Finance, this account, which focuses on smart TV reviews, mainly published answers with more than 1,000 likes in 2020-2021, and many of the latest answers published in 2022 have only a few likes.

Zhihu launched a male advertising community "CHAO" in 2019, attempting to separate soft advertising and existing communities, but it did not gain market favor and soon disappeared.

Community atmosphere, user scale, and commercialization have gradually become Zhihu's "impossible triangle": in the early stages of development, the user scale was small, the community atmosphere was good, and the platform struggled with commercialization; in the middle and late stages of development, the user scale expanded, the commercialization process accelerated, and the community atmosphere caused dissatisfaction among users.

Commercialization has brought destructive power, and the atmosphere of the Zhihu community can no longer return to the early days of the business. Some netizens have invented a nostalgic and sentimental word to comment on the few rational and objective contents now, calling it "Zhihu's legacy."

03

Where is the new impetus?

Zhihu has tried many commercialization paths, but projects have come and gone, and only a few remain.

As mentioned above, paid knowledge was once one of the hottest trends in the domestic Internet industry, and many people entered the market. Zhihu's traffic comes from a wide range of knowledge, so it is natural for it to take advantage of paid knowledge. However, Zhihu's ability to control it is insufficient, and many innovative businesses have been preempted by other companies. Moreover, this trend itself comes and goes quickly. Except for a few extremely limited platforms such as Luo Zhenyu's Get APP and Fan Deng's Fan Deng Reading Club, many products have already failed.

Zhihu followed the trend and launched a series of paid knowledge products in 2016, such as Zhihu Live, Zhihu Bookstore, Zhihu, etc. In 2018, Zhihu also upgraded the "Knowledge Market" to "Zhihu University", which shows its ambition to establish a huge paid knowledge system.

Zhihu seems to have strengths in terms of big V reserves and user base, but it is clear from the implementation that these are far from enough. Take Zhihu Live as an example. The product interface is similar to WeChat, and the content is told in a single voice message. This method of use is neither as convenient as the voice live broadcast of course platforms such as Xiaoetong, nor as intuitive as the video live broadcast. After several revisions, the current Live is the original segmented voice directly integrated into a complete recording by the Zhihu backend, which makes people feel that if they had known this earlier, they would not have done it in the first place.

When Live was first launched, Zhihu had little supervision over the speakers' accounts and did not control the content. Ajiu, who has 20,000 followers on Zhihu, told Haike Finance that in early 2017, the Zhihu manager sent her a private message inviting her to host a Live. She tried two or three times, and she set the topic, content, and price herself. She chose to talk about some content related to her master's research topic. The price was set at 19 yuan at the time, and there were hundreds of listeners per session on average.

Ajiu said that out of curiosity, she also watched other people's live broadcasts, with a variety of topics, such as "How to eat Chongqing hot pot", etc. However, after a period of time, the process of hosting a live broadcast became particularly cumbersome, and even required the housekeeper to provide undergraduate and master's degree certificates.

There is nothing wrong with the standardized management of the platform, but the operation strategy of over-expansion is obviously not conducive to the development of the product itself. When Live started, there was no threshold, which led to a mixed bag of content and user dissatisfaction; it was quickly narrowed afterwards, the content supply decreased, and the product could not attract users, and finally few people mentioned it. Following a similar direction to Live, Zhihu tried all the mainstream knowledge payment products on the market, such as paid voice, paid questions, courses, and e-books, but ultimately failed to find a way to fully ignite user interest.

While relying mainly on broad advertising and paid membership monetization, Zhihu is also calculating the value of knowledge accumulation, and vocational training comes from this. Since the first quarter of 2022, Zhihu has separated vocational training from "others" as an independent revenue business. In the first three quarters of 2022, Zhihu's vocational training business revenue was 39.5 million yuan, 46.2 million yuan, and 78 million yuan, respectively. The scale is still small, but Zhihu has high hopes for it, and recently officially launched the vocational education APP Zhixuetang.

Zhixuetang is still in its early stages, and currently only 6 courses are available, covering topics such as writing, operations, postgraduate entrance exams, film and television post-production, and data analysis. These courses, with prices ranging from 0 yuan to 1 yuan, are what the knowledge payment industry calls "leading courses", which means using low prices to attract users and then introducing other more expensive training courses in the course content.

It remains to be seen what the next step of Zhihu's vocational training will be, but this business itself is really nothing new. Offcn Education, Huatu Education, New Oriental, etc. have been deeply involved in this field for many years and have good brands and reputations. Zhihu does not have the ability to compete with them in terms of traffic or professional level. This is more like a story deliberately told to investors.

The shrinking of Zhihu's monthly active users, or MAU, is a cause for concern, as it partly reflects Zhihu's loss of value on the user side.

In the third quarter of 2022, Zhihu's MAU dropped to 97 million, a decrease of 4.2 million from 101.2 million in the same period of 2021, and a decrease of 8.9 million from 105.9 million in the second quarter of 2022.

The new story is still being pushed, soft and hard advertising are being used vigorously, and vocational training is also running fast, but Zhihu's losses are still expanding. Zhihu is like stumbling forward in an extremely long and narrow dark passage, but until now it has not seen the light that heralds hope.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.