Why can’t Chinese video websites retain users and make money?

The profit model of video websites has been a difficult problem since its birth. From advertising to paid user methods, video websites have never stopped trying. Netflix's charging model has always been a dream for Chinese video websites. Although Chinese video websites have launched membership models, the reality is very bleak. Although this article summarizes the three major reasons for the unpopularity of the membership system, namely poor user experience, shortage of personalized resources, and weak social attributes, in fact, the fundamental of the membership system is how many products the video website provides to members that users really want to pay for. If Chinese video websites do not solve the simple content method of porters, no matter how beautiful it is on the surface, they cannot be compared with Netflix. We compiled this article to analyze the membership system of video websites in order to arouse everyone's thinking about the essence of the membership system of video websites through these superficial analyses.

Not long ago, a debate about video ads was launched online: on the one hand, video websites believe that ads are a legitimate way to make money, and are also the cost of purchasing copyrights. Blocking ads will reduce the number of videos that can be watched, and ultimately affect the user experience; on the other hand, users expressed dissatisfaction with the current video ads that are more than one minute long, and believed that low-quality and lengthy ads are the culprits that destroy the user experience. The dispute between the two sides eventually led to another topic: video websites provide membership services that can remove ads, and the price is not very expensive (ranging from a few yuan to more than ten yuan a month). Why do netizens prefer to endure 60-70 seconds of ads rather than become members?

Perhaps it is easier to see the current status of the membership system of video websites with data. Take the fourth quarter financial report of Youku Tudou Group in fiscal year 2013 as an example: the group's net income reached RMB 901.3 million, an increase of 42% over the same period of fiscal year 2012, of which advertising net income accounted for RMB 801 million. The revenue growth mainly came from the business growth of brand advertisers and the increase in the average investment of advertisers (the increase in the number of advertising broadcasts). It can be seen that the website's value-added services represented by paid membership have not made any contribution to Youku Tudou's revenue growth.

Why is the membership system of video websites unpopular among netizens? This article will analyze it from three perspectives.

Reason 1: Does membership really “improve” the experience?

Currently, the membership privileges of video websites are mainly divided into three aspects: 1. Skip ads; 2. High-definition experience; 3. Exclusive videos.

Among these three privileges, "HD experience" is not very meaningful. The so-called "HD" mainly refers to 1080P resolution. The minimum network speed required to watch 1080P online is 4Mbps, that is, only when other network services are stopped, 4M network users can barely support the online playback of 1080P videos. Judging from the current network conditions in China, the experience of ordinary users watching 1080P may not be better than 720P.

The advantage of "exclusive videos" is not obvious. Free BT seeds are everywhere nowadays, and users can find them by patiently searching for a few minutes. Most users will not spend money on a website just to watch a few videos. Moreover, the works in the video libraries of various websites are not exclusive. Maybe the videos that are exclusive to members of website A are available for free on website B.

The only privilege that is really useful to most users is “skipping ads”. However, when a user sees a 60-second ad that cannot be muted, he will first feel disgusted with the website, and then think about how to avoid ads. The crux of the problem lies here - paid members should indeed have a better experience than ordinary users, but this does not mean that the website can use methods that reduce the experience of ordinary members to reflect the "superiority" of members. When users pay to become members in order to "skip ads", the membership system does not actually "enhance" the experience, but only "complements" the experience. This method, which is similar to blackmail, can make some users compromise, but it also comes at the cost of reduced user favorability.

Unfortunately, most video websites are currently forcing users to become members by reducing the overall site experience. As you can imagine, it certainly won't be recognized by users at the value level.

Reason 2: The website relies too much on external resources and users lack a sense of belonging

Currently, video websites rely on external purchases for film and television resources. Users go to whichever website grabs the resources. However, the unknown nature of resources makes it difficult for netizens to predict which website can stably output high-quality content. For example, the exclusive online broadcast media for the first season of The Voice of China was Youku, but in the second season it suddenly became Sohu Video. The changes are too fast, and users cannot feel a sense of belonging to the website, so naturally they will not become paying members.

In addition, unlike text-based media, most video websites are currently reprint platforms and rarely participate in the production of video resources. Without producing content, it is naturally impossible to output values, and it is impossible to gather users with similar value orientations. When the brand appeal of a video website is far less than the attractiveness of the video resources, how can users want to become fans of the video website?

This is also the reason why online self-made dramas rose in 2013. The appearance of "Diaosi Nanren" and "Wanwan Xiangxiang" means that video websites have begun to change. I believe that most video websites have already understood that a user who only watches the programs and has no interest in the website itself will not want to contribute money to the video website. Online self-made dramas are the first step for video websites to build their own brands.

[Maker 100 Comments] Currently, due to the high copyright fees, video websites need to spend a lot of money to purchase copyrights, and the operating costs remain high. In terms of personalized content production, although various companies are involved, due to the cost and personnel, most of them are only superficial and cannot form a truly competitive content advantage.

Reason 3: Few social elements cannot satisfy users’ vanity

Membership is a reward from the website for user behavior that meets expectations, which is an incentive mechanism. In terms of form, the membership system adopts a hierarchical approach, granting a series of privileges to allow member users to experience "being particularly respected." Unfortunately, the current membership system of video websites does not show this "superiority" - except for a membership logo on the user's avatar, other aspects are no different from ordinary users.

An example in stark contrast is QQ members. The red-name privilege of QQ members is based on the users’ need to be “respected” – QQ identifies QQ members in a highly visible friend list, making members more visible and making them feel more “unique”.

At present, except for UGC websites such as Youku and Tudou, most video websites have no connection between users. The community atmosphere is too weak, and the membership system naturally has no soil to survive. The identity of members on video websites is vague, and the title of membership does not make them feel proud.

Four ways to solve the membership system dead loop

The imperfect membership system and the crude and brutal advertising display system are the main reasons for the operational dead end of video websites: the membership system is unattractive - users can only watch ads - ads are too long and too poor in quality - users begin to use ad-blocking plug-ins - advertising costs increase, website profits suffer - websites lengthen ads and increase membership fees - more and more people use ad-blocking plug-ins, and the number of member users decreases - advertising costs continue to increase... This has become a common problem for domestic video websites.

In my opinion, video websites need to do the following four things to improve the current situation:

1. Reduce users’ negative feelings towards the website by optimizing the presentation of advertisements;

2. Enhance the interactivity of comment content to complement social attributes;

3. Increase the proportion of self-produced video content, convey values ​​to netizens, and gain recognition from users;

4. Highlight the distinguished status of members through more complete page design and more exclusive activities.

With these, a sustainable membership system can be established.

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.