Video websites seek payment models, industry integration is an important path

No one can give a definite answer as to whether the business model of video websites in the future will eventually be a paid model, but this does not affect any possibility of video websites currently trying and exploring the paid model.

Recently, there is news that 360 will jointly establish a new video website with Guangguang Media. The newly established video website will focus entirely on movies, including movie ticket sales and other derivative services. The profit model is mainly pay-per-view, and there are no advertisements throughout the process. This also clearly distinguishes it from the current advertising model that relies on purchasing copyrights to increase traffic and establishing brands through self-made content to attract advertisers.

Home entertainment promotes the development of video websites

56.com, which has gradually become a hot potato, was once again purchased by Sohu from Renren for US$12.9 million. This news, compared with the fact that Renren spent 500 million yuan to buy this video website four years ago, has become a most comedic tragedy.

As a leading company that adhered to the concept of UGC (user-generated content) in the early days of video website development, 56.com was once ranked as one of the three major video websites in my country along with Youku and Tudou. However, in just less than 6 years, the three major video websites that focused on UGC have all embarked on the path of transformation to PGC (professionally produced content).

The development prospects of UGC have been completely reversed compared to PGC. As more and more professionals and film and television companies enter the production field of video websites, their self-made program content through professionalization and corporatization has gradually begun to get rid of the "amateur" impression, and the advantages of PGC have begun to gain more and more support.

After LeTV acquired Huaer Films, iQiyi teamed up with Huace Films, and Mango TV joined hands with Mango Media, many video websites have to expand their content resources by opening related studios and bringing in film and television companies. This is also an important measure for video websites to focus on PGC and promote high-quality content.

In the past two years, with the rise of the OTT industry, the competition battlefield of video websites has begun to expand from PC and mobile terminals to TV terminals. Under the established circumstances that PC and mobile terminals have formed a free model, the paid model of the TV terminal has become another opportunity for video companies to open up a new business model.

In fact, the video-on-demand function, which is defined as family entertainment, focuses more on pushing high-quality content and improving user experience. Facing comprehensive coverage of family members, the content recommendation of video services requires both accuracy and quality, and at the same time, it must be able to compete with traditional TV programs. In view of this, small-scale or declining video websites like 56.com may face elimination, while large video websites that win the comparison will bring users a more complete user experience.

Broadcasting and Television Regulation Stimulates Market Screening

As we all know, foreign video websites have been focusing on the paid model since their inception, and most films have chosen the paid model at the request of the content providers, especially some American films, where the copyright holders have explicitly prohibited video websites from purchasing the copyrights and providing them to users for free. This marketing model can be said to have not only guaranteed the profitability of video websites, but also cultivated users' good viewing habits by providing high-quality films.

The development trend of domestic video websites has always been to explore and move closer to the paid model. As far as several mainstream video websites are concerned, they have tried the paid model by setting up paid areas. However, whether it is video resources, game experience, or even service software, domestic Internet users have long been trapped in the abyss of "free use". Enterprises that simply want to change this dilemma by their own efforts seem to be brave and lonely.

Of course, this is only the frustration of PC and mobile terminals, and when video websites reach the TV terminal, the market is no longer disordered, because the Internet video industry belongs to the radio and television regulatory system.

From the beginning of this year to now, a series of radio and television regulatory measures show that radio and television supervision of Internet service providers on the TV side is extremely strict and ruthless. The strong radio and television policy orientation will not only affect the content cost and business model of video websites, but also may eliminate small and medium-sized video websites, accelerate the integration of the entire online video industry, and extend the capital return cycle of video companies.

Judging from the current development of video websites, Qvod was shut down, Xunlei has been declining since its listing, and Youku Tudou had to be acquired by Alibaba. The tense industry integration trend has caused venture capital to pursue a quick exit, which has further accelerated the integration of the online video industry.

It is reported that in the "new regulations" on Internet video supervision announced by the Radio and Television Administration in the first half of this year, the Radio and Television Administration may appropriately relax the access mechanism and qualification certification of online video providers. All listed Internet companies such as Sina, Sohu, Tencent, NetEase, and TOM are considered to have the qualifications to provide video services, while unlisted companies will be subject to different circumstances. It can be said that this is a devastating blow to tens of thousands of small and medium-sized video websites in China.

Of course, after this severe storm, the positive outcome is that radio and television supervision will accelerate industry integration and resource centralization.

As policies are tightened, the profit dilemma of video websites has become increasingly prominent. The traditional advertising model has long been unable to meet the basic costs of the current video industry. Seeking new business models represented by paid models will be the only way for video websites to achieve sustainable development in the future.

The online video industry has become the largest application of the domestic Internet, and its huge market potential has also prompted the industry to accelerate integration and development. After the integration is completed, video companies may be able to focus more on content, and then seize the market and compete for users with better content resources.

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.