The dilemma of Youku, the follower

I don’t know when it started, but Youku Video’s identity as the leader began to blur. It began to be pushed by the industry and accepted changes step by step. All the big moves seemed to be to save the poor stock price.

Today, Youku announced the establishment of a film and television company. Just a few days ago, Youku released its Q2 financial report, with a net loss of RMB 164.4 million, a 57% increase from the estimated comprehensive net loss in the same period of 2013, and the degree of loss reduction was far less than the same period last year. The two events seem to have no direct connection, but in fact, it was the latter background that led to Youku's move.

What is a follower? Before Youku established its film and television company, its competitor iQiyi announced the establishment of iQiyi Pictures and the 7+1 Film Plan more than a month ago, announcing that it would launch seven domestic films and one Hollywood film. Tencent and Alibaba also made moves one after another, and BAT all showed their trump cards and entered the film industry. Now that Youku has entered the game, it is inevitable that it seems to be late.

When video websites enter the film industry, their main advantage is their channels, and channel advantages and content advantages complement each other.

TV series are the biggest source of traffic for major websites, and exclusive copyrighted TV series content is still the core of competition among video websites. For Internet companies, continuously reducing costs and innovating business models and technologies are the fundamentals of progress.

Just yesterday, the competition for TV drama copyrights escalated again, with iQiyi announcing a joint venture with Huace, a film and television production company. The competition for exclusive content copyrights of video websites is in full swing. As copyright prices rise, video websites have to find another way and start directly from the upstream of film and television production.

At present, all major video websites purchase copyright content from film and television production companies. From this perspective, Youku is one step behind, which may be the next development direction of Youku.

Even though Alibaba has invested in Youku, the outside world generally believes that this is a loss-making deal for Youku, and Youku has received nothing but money. This is the price Gu Yongqiang has to pay to maintain the independent operation of Youku.

Now that Youku has established a film and television company, it is also unlikely to get any benefits from Alibaba Pictures. There is a precedent for this. After Alibaba acquired a stake in Youku, in addition to spending money to buy copyrights, in July and August, Youku successively invested 50 million yuan in China Media Group Guangdong, hoping to obtain a pass to enter the home Internet. Before this, almost all mainstream video websites had been tied to a license holder.

iQiyi uses the license provided by GITV, a subsidiary of China National Radio, and has long been a shareholder of the company. LeTV found another way to cooperate with Chongqing Radio and Television, and indirectly obtained the qualification, despite the strict prohibition of major licensees from cooperating with the radio and television.

Alibaba has been cooperating with the license holder Wasu for a long time. The godson did not receive any collateral benefits from his godfather, and had to spend a large amount of money to buy a stepping stone to the home Internet market when he was already stretched to the limit. This behavior is more like an athlete's relentless pursuit one minute after the gun was fired, and poses no threat to other opponents at all.

This shows Youku’s dilemma of catching up.

In terms of self-produced dramas, which are where all the companies are focusing their efforts, Youku, which started out as UGC, has a natural advantage. However, judging from the performance of each company's self-produced dramas this summer, Youku still only relies on "Never Expected" to support its presence, and no new star-produced dramas have been produced.

Looking at competitors, iQiyi's "Incredible Summer", Sohu's "Fleet of Time", Tencent's "The Darker Side" and others have all achieved impressive results.

Gu Yongqiang once vowed to invest 500 million in the self-produced drama market. In the current market situation, in addition to LeTV's self-produced content and self-created platform, iQiyi and Tencent Video are backed by "uncles" to enjoy the shade, while Sohu is Zhang Chaoyang who is devoting his life to making videos, and there is no doubt that the investment is huge.

In the long run, Youku's revenue model has not changed, its investment is still increasing, and Alibaba's investment will sooner or later become unsustainable. The Q3 financial report will probably be even uglier.

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.