What have video websites reflected on behind Youku’s losses?

April 8 (Reporter Zhang Zhichang) For a long time, the imbalance between input and output has been an insurmountable dilemma for the video website industry.

At the end of last month, Youku Tudou Group released its fourth quarter financial report, which showed that Youku Tudou's fourth quarter revenue was 1.26 billion yuan, a 40% increase over the same period last year, and a net loss of 318.1 million yuan, a significant increase from the net loss of 24.6 million yuan in the same period of 2013.

As soon as the financial report came out, it caused a stir in the video website industry.

Although it is a well-known fact that video websites continue to burn money, as the current No. 1 in the video website industry, even Youku has a huge hole of 318.1 million yuan. It is conceivable how difficult life is for other video websites.

The aftershocks of the copyright dispute are still there

In interpreting the financial report, Liu Dele, president of Youku, said that in terms of investment returns, professionally produced content and user-generated content have the highest investment returns, followed by Youku's original content, and third are Hong Kong dramas and Korean dramas; compared with the above three, the lowest investment returns are the hot domestic dramas and popular domestic variety shows, which are in a fierce competition and have reached a "red ocean" state. This is because the copyright prices of these contents have soared to a state where video websites cannot make a profit.

In recent years, major video website companies have been desperately buying copyrights to increase traffic and attract users in order to compete for the top spot in the industry. The copyright war in the video website industry in 2011 is still fresh in the minds of major video website companies.

The roller coaster-like growth of online video content copyright prices can be said to reflect the importance of content copyright to online videos, and also reveal the changes in the survival logic of the video website market. Copyright content is not only a direct means for video website companies to stake out territory and compete for the first place in the industry, but also the most effective weapon for their websites to attract users and increase traffic.

Although the frenzy of content copyright competition has quickly passed, looking at the actions of major video websites in content over the past two years, it is not difficult to find that intensive purchase of copyrights to expand the company's visibility and reputation in the video website industry is still one of the policies for major video websites to seek a breakthrough.

In fact, after the copyright dispute has subsided, major video website companies have realized that no company has the real strength to monopolize the entire copyright content market. Although copyright content is still the most basic survival resource for major video websites, with the change in the market logic behind copyright content, major video networks have reduced the operating weight of copyright content and instead rely on improving comprehensive strength to enhance user experience.

Advertising model urgently needs to change

The emergence of disputes over online video copyright can be said to be the result of both the birth of the content copyright market and the stimulation of the single advertising model in the video website industry.

As we all know, copyright, bandwidth, and labor costs are considered the three major obstacles in the video website industry. As bandwidth and labor costs gradually stabilize, the price of copyrighted content naturally becomes the key point of competition in the industry. In addition, as the profit model of the video website industry, that is, the single advertising model, gradually becomes clear, the market concentration of the entire video website industry naturally focuses on the price of content copyright.

The most direct manifestation of this single advertising model is to purchase copyrighted content in exchange for playback volume, and then realize monetization through advertising to offset costs such as bandwidth, content and labor.

It is the long-term existence of this business model that explains why the No. 1 video website industry, Youku, has seen a widening of its net losses despite a substantial increase in revenue. In fact, as early as when the price of online video copyrights skyrocketed irrationally, the exploration of business models by the video website industry had become imminent. However, at that time, the entire industry did not have too much concern about the imbalance between input and output, which led to the continued brewing of this dilemma.

The lack of diversified income sources has undoubtedly become the most urgent issue for the current video website industry. Take LeTV, which is also a video website, as an example. It is precisely the early accumulation of video content copyrights that has enabled it to continue to achieve profitability by relying on copyright content distribution.

Recently, Youku, which has realized the serious imbalance between input and output, has also begun to make real changes. First, it announced the adjustment of its organizational structure and established six business units and nine content centers, hoping to correct the disorderly expansion of enterprises in the capital market through transformation and upgrading to a cultural and entertainment ecosystem; second, it continues to expect that the video website industry can collectively make some rational adjustments and changes.

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.