As the trend of paid video streaming emerges, are video sites ready to let users pay for it?
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Listening to music for free and watching movies online for free seem to be commonplace in China, but this "free" door is slowly closing! It is not difficult to find that the business model of video websites has gradually become a trend of paying to watch dramas after the advertising model, and various websites have successively launched charging strategies for some content. So what preparations have various video websites made for this seemingly future payment outlet? Can the paid model of video websites make users pay after years of preparation? Why has the trend of paid video faded out of sight? As early as 2008, some video websites had already begun to explore the video charging model. In 2008, Jidong.com officially launched the pay-on-demand brand "Jingdongpai". At that time, Jidong.com's paid channel focused on overseas blockbusters, and had cooperated with Hollywood film companies such as Disney, SONY, and FOX to launch an exclusive paid product "Hollywood Theater". In 2011, Jidong.com stated that 80% of its revenue came from user payments. In the end, Jidong.com, which played the "user payment" model, faded out of the video industry. In 2010, Xunlei Kankan launched the "Ruby Cinema" service, which charges users a fee. It has successively launched high-definition downloads and high-definition online viewing, charging about 1 to 2 yuan for a movie. In the early stage of the service launch, Xunlei Kankan launched a massive publicity campaign, but the "Ruby Cinema" later disappeared. Xunlei Kankan's revenue is still mainly from traditional advertising. It is worth mentioning that according to the payment data shown in Youku's Q1 2011 financial report, 94% of Youku's net revenue came from brand advertising, and advertising is still the main profit model of the website. Although the video payment trend that blew up seven years ago has been regarded as a development trend by the industry, it was difficult to promote it and eventually became a thing of the past. In summary, there are two main reasons. 1. Early users’ payment habits are immature In the early days, the trend of paying for videos was just beginning, and domestic users had long been accustomed to watching free and pirated videos, and their copyright awareness was not strong. It is understood that although various companies were trying the paid model at that time, the results were not ideal, as domestic users have long been accustomed to the annual fee model. In addition to the above-mentioned Jidong.com and Xunlei Kankan, in 2011, Sohu HD paid dramas were divided into two charging standards of 5 yuan and 3 yuan for a single episode, while iQiyi only had one standard of 5 yuan. Sohu HD also launched a 20 yuan monthly package, while iQiyi launched a 9.8 yuan monthly package for members. However, relevant revenue data has not been announced. Some industry insiders analyzed that although various companies were trying the paid model at that time, the results were not ideal. Domestic users have long been accustomed to free, and their acceptance of charging is not high. According to a survey conducted by a portal website in 2010, the results showed that only 383 netizens were willing to pay for video on demand, while 6,095 were unwilling to pay. Only 6% of netizens were willing to pay, which shows that users' payment habits were still very immature and it was quite difficult to achieve at that time. 2. The website video content is not enough to meet user needs If you want users to pay to watch videos, the only way is to provide high-quality and unique videos. However, many video websites were full of pirated content, and some content was uploaded by netizens. Few websites could launch their own unique content. Users would watch videos on whichever website had the content, and their loyalty was not high. It is understood that after 2010, video websites have paid more and more attention to copyright and video HD viewing experience. Many video websites are constantly spending money to purchase content and have begun to launch paid HD viewing experience, but everything has just started, the program content is not rich enough, and it still cannot meet the needs of users. Everything is difficult at the beginning. After 2010, the development environment of video websites has been continuously optimized, including the copyright of content, the development of experience towards HD, and the payment habits of users are also slowly being cultivated, all of which have made the payment environment mature. In addition, the bottleneck of advertising revenue is also one of the reasons why video payment has been valued again. Nowadays, the income of online video websites mainly comes from advertising. The website spends money to purchase video copyrights, attract users to earn traffic, and then use traffic to exchange for advertising revenue, but advertising revenue has entered a bottleneck period. Super long advertisements bring extremely poor user experience. Now if you watch videos for free on video websites, you will be forced to accept the advertising time of dozens of seconds at the beginning, and there may be several seconds of advertising in the middle. The contradiction between the income of video websites and the user experience is constantly intensified. If you want to improve the user experience, you naturally have to work hard on "removing advertisements", and the most basic way is to let users pay. The change in the overall environment has pushed video payment to the forefront again. What is the current payment model of major video websites? Currently, there are two main ways for users to pay. One is to open a membership service, which can be paid monthly, quarterly, or annually. The annual membership fee ranges from 150 yuan to 198 yuan. After users open a membership, they can enjoy the functions of watching dramas without advertisements, high-definition quality, and more movies. The second is to pay for content on demand, which provides some popular movies. Each light and shadow fee is about 5 yuan. Different websites will make some adjustments based on their own positioning. Let's take a look at what Youku, iQiyi, and Tencent Video have done? 1. Youku Tudou Group: Increase investment in online content Youku's current membership payment model is 20 yuan/month and 169 yuan/year. As early as 2010, Youku Tudou Video began to test user payment services, creating models such as movie on demand, monthly membership viewing, and high-definition live broadcasts of concerts. According to Youku Tudou's official data, Youku Tudou's Q1 2015 financial report shows that Youku Tudou Group's user business revenue increased by 706% year-on-year in the first quarter. User business revenue has achieved a month-on-month growth of more than 60% for five consecutive quarters and contributed 11% to total revenue. By the end of 2014, Youku Tudou had 1 million monthly active members. It can be seen that Youku Tudou has put a lot of effort into user payment, mainly to increase investment in online content. Liu Dele, president of Youku Tudou Group, said in his interpretation of the first quarter financial report of 2015 that in terms of return on investment: the return on investment of content produced by professional partners and user-generated content is the highest, followed by original content, and finally the return on investment of film and television dramas. In 2015, the investment in all types of content will be increased, mainly in self-generated content, PGC and UGC, to enhance the online content ecosystem, and online content has gradually become the most important content category for the growth of Youku Tudou Group's revenue and traffic. 2. iQiyi: Self-produced online dramas iQiyi's current membership payment model is 19.8 yuan/month and 198 yuan/year. Recently, iQiyi said that the number of monthly paid VIP members is currently 5.017 million. Among iQiyi's 500 million independent users, members account for only 1%, and there is huge room for conversion. According to Gong Yu, 70% of monthly users who paid for the first time will choose to continue to renew. It can be seen that the income from membership fees cannot be underestimated, and there is still a lot of room for market development. This piece of cake must be firmly grasped. In order to attract more users to join the membership, iQiyi charges users through its exclusive self-made online dramas, such as the self-made online program "U Can U Bibi", the talk show "Xiao Song Qi Tan", the TV series "Psychological Crime" and "Grave Robbers' Chronicles", etc. Recently, iQiyi's "Grave Robbers' Chronicles" has adopted a pay-to-watch model. From July 3, members can watch all episodes for free, while non-members can only watch one episode a week. iQiyi hopes to use super IP TV series and fan effects to drive the growth of membership. 3. Tencent Video: Playing high-quality foreign TV series Compared with iQiyi's membership fees, Tencent's price is relatively lower, with membership fees of only 150 yuan per year. Compared with iQiyi's self-produced online dramas, Tencent Video's main model for attracting users is to play high-quality foreign TV series, such as "Game of Thrones", "The Newsroom", "Band of Brothers", "Boardwalk Empire" and other award-winning dramas produced by HBO. It is understood that the payment model is actually similar to that of iQiyi. It is understood that Tencent Video will launch a weekly American drama. If you want to watch it for free, you have to wait for one episode to be updated per week, while paying users can watch all episodes. In addition, Tencent Video will begin to try a charging model on its own network. Previously, Tencent's self-made online drama "The Darker Side" achieved good results. Its producer Bai Yicong said that a special episode will be produced and netizens will have to spend five yuan to watch it. Free users can only watch it every Monday, while paying users can watch the entire episode every week. 4. Sohu Video: Relying on top copyrighted content Sohu Video's current membership payment model is 5 yuan/month and 49 yuan/year for ad-free users. Movie and TV members can enjoy 600 member movies for 15 yuan/month and 119 yuan/year. As for paid viewing of dramas, no relevant service instructions have been released yet. Sohu Video's self-produced drama "Diaosi Nanren" is relatively successful, but compared with Tencent Video, Youku Tudou, iQiyi and other companies that vigorously develop PGC and UGC content, Sohu Video relies more on "top copyright content", which is mainly the copyright content of popular dramas and ace variety shows. Obviously, these are not exclusive content of Sohu Video. Of course, Sohu is also aware of its shortcomings. In November 2014, Sohu officially acquired 56.com and planned to work with 56.com to try to create a comprehensive platform for long videos, PGC and UGC. Recently, Sohu announced that it would introduce the format of the top American variety show LipSyncBattle (translated by netizens as "Lip Sync Battle") to China. The Chinese version will be broadcast online on the Sohu Video platform. 5. New member: Alibaba Video TBO aims to be the Netflix and HBO of China Alibaba's video website is named Tmall Box Office, or TBO for short. It will provide domestic and foreign film and television programs, as well as programs produced by Alibaba. Alibaba TBO has great ambitions. Its positioning is to redefine home entertainment and become China's HBO and Netflix. Alibaba said that TBO is different from most domestic competitors. 90% of the content requires payment to watch. You can choose to buy episodes or watch them on a monthly basis. The remaining 10% is free. Video payment has been implemented for a long time. Are users willing to pay for it? Although the above mainstream video websites have shown that video payment has been implemented for a long time, online video websites are facing two important problems that are the same as five years ago: Are users' payment habits mature? Can they readily accept the payment model? Is the quality of the paid content on current video websites really worth paying for? 1. Users’ payment habits are more mature but still not mature enough According to the survey results of "2014 Online Cinema Film Payment Willingness" conducted by Analysys in March 2015 in conjunction with 1905 Movie Network, only 26% of viewers accept the price range of 1 to 3 yuan to watch a film, while more than 40% of viewers choose "no purchase as long as it costs money". From the data, many users are not willing to pay to watch dramas. Of course, compared with the above-mentioned survey in 2010, only 6% of people were willing to pay. In addition, according to the survey, the number of monthly paid VIP members of iQiyi reached more than 50.17 million. Although it only accounts for 1% of the total number of users, the year-on-year growth rate is 765%. It can be seen that in the past few years of development, the cultivation of user payment habits has been greatly improved. However, industry insiders have analyzed that, for now, the vast majority of users prefer to accept video ads rather than pay, and a small number of people will use ad-blocking plug-ins to avoid ads. It will take some time for users to mature their payment habits. 2. The increasing focus on content quality still needs further improvement According to the 35th "Statistical Report on the Development of Internet in China", as of December 2014, the number of online video users in China has reached 433 million, and the utilization rate of online video users is 66.7%. The report shows that 47.4% of online video users said that they "only watch the content they care about, and don't care whether it is self-made by the website". From these data, it can be seen that whether it is UGC content or PGC content, users will only pay for high-quality content in the end. And in order to make users pay for self-made content, only truly powerful content can attract a huge number of online video users. From the content perspective, there have been great breakthroughs compared to 2010, whether in exclusive richness, high-definition experience, or video quality. In terms of exclusive richness, video websites introduce high-quality foreign video content. For example, last year Tencent Video and HBO launched a strategic partnership to exclusively introduce multiple award-winning series such as Game of Thrones and The Newsroom and put these contents into VIP. Now Alibaba TBO is also following the model of HBO and Netflix, providing high-quality foreign videos and internally produced content. Secondly, the websites pay more attention to self-made exclusive online dramas and programs. According to relevant data, since 2013, the content expenditure of video platforms has been rising year by year, and the scale of self-made investment has also been rising. In 2015, it will grow to 2 billion yuan, accounting for 25% of the total investment in copyright and self-made. Video websites invest in filming and broadcast them exclusively on their own platforms to attract users. Websites have invested in self-made online programs: Youku "Lovers' Journey" and "Wanwan Expected", Sohu Video "Diaosi Men", iQiyi "Strange Talk", Tencent Video "Are You Normal?" As self-made video columns, they have become big money-making columns. In addition, video websites have begun to upgrade their cross-platform cooperation and become video + TV + content providers, such as Youku's "The Voice of Youth", iQiyi's "I Go to School", Tencent Video's "We Are 15", etc. The model of cooperation between video and TV stations has been continuously strengthened at the content level. Although the richness of self-made content on video websites continues to increase, there are still some problems, which are particularly evident in the monetization of self-made online dramas. Audiences have always been dissatisfied with the quality of domestic dramas. The same topics are used, such as fairy tales, anti-Japanese dramas, bloody romantic dramas, etc., without innovative content; "50-cent special effects" are even rougher in video production, which makes users see the flaws at once, which makes users complain a lot. Take iQiyi's exclusive drama "Grave Robbers' Chronicles" as an example. Although the number of clicks quickly exceeded 100 million after it went online, the original fans continued to give negative comments, the special effects were crude, and the plot adaptation was seriously unbalanced. It can only be supported by the strong fan base of the actors. When the crudely made TV series is put on the pay-per-view mode, it is estimated that few people are willing to spend money to watch it. 3. Learn from the successful experience of foreign video websites HBO and Netflix in original content Netflix's main method is to vigorously develop original content. Most of the content provided on Netflix is complete film and television dramas. Its charging model is to charge users a membership fee of US$8.99 per month, and there are no advertisements in the videos. Providing users with a large amount of high-quality exclusive content without advertisements just captures the pain points of users when watching dramas. The great success of Netflix's self-made "House of Cards" is a good example. HBO's successful transformation is also inseparable from its high-quality self-produced content. HBO was once seriously injured in the fight for movie copyrights, and finally transformed to the self-produced route. Fortunately, HBO's self-produced content is of high quality and has a strong appeal to users. Its representative classic dramas are well-known to everyone, such as "Game of Thrones", "Sex and the City", "The Sopranos", and "Band of Brothers". In short, no matter what the current situation is, if you want to succeed in the paid TV drama streaming market, content is king. Conclusion The ideal of paying is full, but the reality is a little skinny, but this does not mean that paying to watch is still a long way off. Video websites have accumulated a large number of users, and converting them into paying members will bring great benefits. Cultivating users' paying habits and providing high-quality content are complementary. As long as you provide content that users feel is worth the money, naturally many people are willing to pay. The remaining question is how to provide quality content that is popular with users. 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. |
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