Ming Ming has a lot of audience, there are very good-looking drama, lovely art days are not good. Behind the endless losses, Ai Qiyi learns To fly, learns YouTube, learns Disney, but why are these profitable stories so hard to tell in China? Jin Mei, author of the Business Review of Yanshi textZhang Junzhi . . Edit.
Shorting Swiss lucky coffee so that the murky water company once again famous, every move has attracted attention. On the evening of 7 April, Murkwater assisted Wolffack in its offensive against another Chinese-owned company. This company is Ai Qiyi.As the country's first video platform, Ai Qiyi had in 2014 determined to achieve profitability, and then the idea became Ai Qiyi's distant dream. It's hard for Aichi itself to make a deal for losses. It is not without efforts, China Naifei, China Disney, online Disney, China YouTube, every name change, is the profit groping of Ai Qiyi, but why delay in success?Why can't I learn the institutions that Ai Qiyi wants to be? Why are these earnings stories so difficult to tell in China? At the time of aichi's long-term losses, the short video platform was on the rise, keeping Aichi behind in terms of revenue and valuation. Where on earth did Ai Qiyi lose?
1Ai Qiyi's was shorted
In its report, which helped Wolffack short Aichi, Murkwater said its face-to-face survey of 1,563 Aichi users in China between October and November last year found that about 31.9 per cent of its members had gained VIP access through membership channels of Aiqi's partners, such as JD.com and Xiaomi TV. These members are just "tricks" and don't pay for Ai qiyi, but Ai Qiyi charges this part of the user's fee into revenue and charges the partner's share.From this, they reasoned that Aichi's 2019 revenue had increased by RMB8 billion to RMB13 billion, accounting for about 27%-44% of its reported revenue. The report also said that in the 2015-2017 financial year, Acheger inflated its deferred revenue by 261.7 per cent, 165.5 per cent and 86.2 per cent. As soon as the news came out, Ache's share price plummeted 10 percent in an instant. In this regard, Ai Qiyi founder and CEO Yu Yu the first time in the circle of friends, "evil does not press right, see who wins in the end!" Over the next few trading days, aichi's shares climbed to $19.25, up 11.3 per cent from the day they were shorted, in solidarity with the big investment banks.Although successfully avoiding the agency shorting this robbery, but Achiyi's life is not good, the fact that a decade has not been profitable, as well as layoffs and other negative news, so that Ai Qiyi's future is full of uncertainty. By the end of the article, Aichi's share price had fallen back to $15.50, lower than the shorting of the second day's share price. The loss seems to be a fate that the long video platform can't escape. In 2019, for example, Youku, which backs Alibaba, lost $10.5 billion, and Tencent Video, which backed Tencent, lost $3 billion. Only Mango TV has a net profit of $1.1 billion, but given its complex relationship with Hunan Radio and Television, it is difficult for other agencies to replicate mango hyper-media profit stories.Ai Qiyi's loss is already a common topic. Yu Yu in the establishment of Ai Qiyi two years when the comment that the long video industry is a rich man's game, money to play, no money to automatically quit, do not buy copyright, you are dead. Today's market environment more and more confirmed this sentence, do not wait for death, do death.From 2015 to 2019, Ai Qiyi's revenue was RMB5,319 million, RMB11,237 million, RMB17,378 million, RMB24,989 million and RMB28,994 million, respectively. However, the content costs for the same period were RMB3,694 million, RMB7,541 million, RMB12,617 million, RMB21,061 million and RMB22,247 million, which almost ate up the increase in revenue. In the past five years, Ai Qiyi's net losses were 2,576 million yuan, 3,075 million yuan, 3,738 million yuan, 9,061 million yuan and 10,277 million yuan.No big Chinese market, why can't you afford to love YouTeng's profits?
2Who the hell is Ai Qiyi?
The rise of online video in China stems from the Chinese government's decades-long monopoly on media. The early revelry on China's video platform, which began with a video of a hoe-induced blood case, came from the media's subversion of monopoly. But as copyright awareness grew, people were unable to continue to make profits in the gray areas of copyright, and video platforms began to shut down. Some platforms have discovered the potential of live shows and games, singting out video and opening up a new track.Stay in place of the video platform, with the call board, subvert the traditional media ideas continue to adhere to. The long video platform became a battle of capital strength - the dead of the no money. It is no accident that BAT-backed Love Youten survived. But is the long video field really a three-fight situation?The vast majority of Chinese, the place to watch long video is actually television, but commercial media do research do not like to include it in the scope of research. In 1983, from the government advocated four-level television, from the country to the provinces and counties, the birth of thousands of television stations, plus dozens of radiation around the world satellite television channels, although these forces in today's new media in front of the huge amount of content looks a little "weak", but its weaving of a huge content network, it is easy to intercept users.These television stations not only have government funding, geographical proximity, channel resources and first-come-first advantage, and are completely free for the audience. They also have career preparation, high-quality social resources, so that some famous school graduates would rather give up the high salary of enterprises, but also to work here. Many television stations do not need, and it is difficult to accurately calculate their real cost input, but the high advertising revenue, social impact of television stations is obvious to all.The traditional media, represented by television stations, have gone through a very clear path over the past few decades, from relying on government subsidies to relying on advertising to feed themselves. By advertising brands for businesses, television stations are enough to make a lot of money. They are behind the brand products and services, not directly involved, merchants earn more money, and the media has nothing to do, but soon the television media realized the disadvantages of advertising dependence, will be television shopping, finance and other means to join, and constantly diversify their own income.Ai Qiyi relies on the user's free on-demand, the traditional TV user resources are part of the diversion. Its profit model and traditional television stations are very different, nothing but a network version of the pay-TV station. However, in content procurement, Ai Qiyi's disadvantage is clear. Previously, the same hot content, Ai Qiyi's purchase price is 2.54 times that of Shanghai Wenguang, which invisibly increases the cost of capital.Ai Qiyi's advertising revenue in the past three years was 8.159 billion yuan, 9.328 billion yuan and 8.271 billion yuan. So Ai Qiyi began to work on paid members, hoping to tell the story of Na fei.But in front of thousands of free Chinese, the willingness to pay is too weak and the ability to pay is too poor. And as the growth of domestic paying users slowed, Ai Youteng began a zero-sum game. No one dares to push users too hard, discount promotions pull members can not do. In addition, Nye has more than half of its international income, but aiqi art's international market, in a short period of time is simply not likely to make any difference.Long.Video is the closest thing to everyday life, so the cultural threshold for exotic consumption is high.Chinese culture "going out", has been struggling for so many years, in a year or two to rely on one or two companies to achieve, almost impossible.This is also the reason why domestic blockbusters have been repeatedly frustrated abroad.Can Ai Qiyi get some cheap content? Like medium and short video companies do?Video and short video platforms are now doing a good job, in part because of changes in user behavior habits, and because UGC makes content costs significantly thinner. Unfortunately, in the long video world, the UGC threshold is so high that it is almost impossible to achieve. This is also the reason why the once-popular big online movies disappeared. In the domestic content production environment, for the platform, bet on a hundred uncertain small projects, it is better to take a larger and more stable large project input and output ratio will be higher. The long video track YouTube road was blocked early.In the content, advertising, audience coverage can not cover the cost of the situation, Ai Qiyi rely on more ways to obtain profits has become inevitable, at this time, Disney is undoubtedly a good template. In terms of content, Ai Qiyi's achievements can be circled. The explosive content from "Tomb Stealing Notes" "Residual Crime" "Yan Jubilee Strategy", to "China has hip-hop" and the recent hot "Youth has you 2", constantly creating traffic miracles. The best way to cash out IP is Disney, so Ai Qiyi's "Disney Story" twists and turns unfold.
3Disney Curse
There's hardly a big media platform that dreams of turning itself into Disney. But in recent years, fewer companies have touted disney, and those trying to emulate Disney have fallen one by one. What's Disney's charm? Why does it look like poison to the media?Disney has attracted attention because it has changed the way media has been used to do business. The scope of economic benefits of the media will be broadened to a rich daily life.Disney has built a unique "round income" profit model, from the first round of revenue from original works such as animated movies, to the multi-form content revenue of these copies into DVD streaming media, to the ticket revenue of entertainment facilities such as theme parks, to the licensing, development and sale of derivatives, Disneyland and derivatives will be content down the line, forming a value development closed loop.Disney's profit model has long been a secret, but can it become Disney by closing the loop?The answer is clearly no. Brand building needs not only products, but also channel support. Disney is a very large empire, with the domestic media can not see the "imperial organization." In terms of Disney's content distribution alone, it has cable TV, radio, television, streaming platforms and other distribution channels, each small unit is enough to shock.As of September 2019, Disney's U.S. cable tv includes Disney (3 channels, 202 million subscribers), ESPN (5 channels, 344 million subscribers), and Freeform (85 million subscribers). subscribers), FX (3 channels, 227 million subscribers), National Geographic (2 channels, 145 million subscribers), A-E (6 channels, 434 million subscribers). Disney-owned cable TV has about 1,455 million subscribers in the United States.Outside the U.S., Disney has about 1,342 million subscribers. Disney operates about 100 Disney-branded TV channels that broadcast in 165 countries in about 35 languages and reach 520 million subscribers. ESPN, which specializes in sports content, operates about 15 ESPN-branded television channels and broadcasts in about 55 countries in three languages, reaching 665 million subscribers. FOX operates about 190 Fox-branded channels and broadcasts in 95 countries in about 40 languages, reaching 220 million subscribers. National Geographic, the documentary channel, operates about 80 National Geographic-branded channels and broadcasts in 90 countries in about 45 languages, reaching 316 million users. Star operates about 80 channels and broadcasts in 10 languages, reaching 221 million users.In addition to cable television, the broadcaster ABC has reached an alliance agreement with 240 local television stations to cover 100 percent of U.S. television households. Six of Disney's eight stations are American Ten Family Television. In terms of streaming services, Disney plus, ESPN plus, Hulu, Hotstar also added an important one. Such a strong distribution network, greatly diluted its content costs, such an organization is AchiYi and other domestic media for a time difficult to achieve. Disneyland and derivatives are its biggest innovations. It's not hard to see how Disney connects ads, customers and products with media content. It interacts with products and services at this level more than other traditional media. Disney's financial composition alone accounts for 35 per cent of theme parks and resorts and 45 per cent of profits. Products and services seem to be very small, but behind them are the entire industry and services industry, whose imagination can be seen.Disney's business model has matured over the past hundred years, starting with Mickey Mouse's low-lying animated images. Disney's media content IP as the core, to create user demand, to sell products and services, thus forming a self-ecological. On the product side, more products are introduced into their own "ecological" pools through self-employment, licensing, etc. The appeal and vitality of IP is Disney's moth. Early on, relying on precise low-child animation, Disney focused on running out of its entire industry chain of business models. The closed loop of this content is good, but it still has a ceiling. Ip's user base determines Disney's online launch. That's why Disney's acquisition of Fox, among others, will bring in images such as Marvel. Only in this way can the user's age span be greater, can the enterprise's plate become larger.But in contrast, Ai Qiyi is far less focused on users and content than Disney. The content of the media platform is all content, the user's focus is not enough, which makes it difficult for the media to make a hole out of Disney's mode.It is also well known that Disney's offline playgrounds and other businesses are heavily capital. It's hard for the average media company to gnaw at this hard bone. China's media's own industrialization capacity is not high, let alone a major project such as a theme park.From the point of view of derivatives development alone,That's itLackluster.Even a bag, a cup, to introduce any product of their own"Platform" to come, it is difficult to really realize value creation.For an organization, it's often out of the do.With Disney's mass IP continuous heart force and maturityBusiness processes are different, a lot of domestic IP is a while over, it is difficult to make the platformMake a profit and exerciseGood ability to empower your own products.In the IP shaping and operation capacity, as well as the subsequent replenishment capacity did not get up, rush to learn Disney, will inevitably lead to the break of the capital chain, especially offline investment cycle is long, high cost. That's why disney mode is the poison of other media. As a result, in 2018, Yu changed his game to make Ai Qiyi from "Chinese Disney" to "Online Disney".
4Who became Disney first?
Is there any space for Disney's imagination online? In China, the answer is yes.At a time when Aichi is in trouble, the short video track is unusually hot. Aichi has a market capitalization of $12.157 billion. But fast-forward has reached a valuation of $28.6 billion after completing round F financing, with revenue estimates of more than $50 billion in 2019. Bytes are worth $75 billion and revenue will exceed $100 billion in 2019. These short videos, why put the long video king Ai Qiyi behind? The reason behind this is that they construct a profit model similar to Disney's. First of all, from the content level, short video penetration is more in line with the people's fragmented reading needs. UGC's patterns and proven algorithms recommend that the quality and diversity of content are relatively guaranteed and inexpensive. Huge traffic advantages, resulting in high advertising revenue.In addition to advertising revenue, short videos make it easier to customize content and connect users to products. Daily consumption is undoubtedly a huge piece of cake, so the quick-hand profit includes: the reward of content producers, the share of product sales, advertising and marketing costs.More than the Huang Qi has also said to fight more into COSCO and Disney, the logic is actually the product and user base of the precise connection. Also, short video content doesn't need to frame the IP of the product at all, which is higher than the Disney ceiling.Recently, fast hands, shaking sound have been up the e-commerce target, this piece is indeed promising. China's online penetration is very high, the media is relatively easy to rely on online commodity connection, to achieve industrial penetration. Specific operational level, people's ability to bring goods is much larger than the content, so the flow of lower fast hands, but than shake sound to obtain better e-commerce results. At this point, the long video platform is even less dominant. Youku's idea of "buying while watching" was given high hopes by Jack Ma. But ironically, it's not Youku that really happens, it's Taobao live.In the user with the productionProduct direct connection aspect, long video has not tried?There must be.Oriental TV has done a program, "The Goddess's New Clothes", will also design clothing reallyDo.Offline stores and online red shops.But the effect is not good, the ultimate effect is the brand advertising effect,Moreover, the lack of continuity makes it difficult to form value precipitation.Long video while watching while buying the mode effect is not good, on the one hand, the purchase activity easily affects the viewing experience, on the other hand, it is difficult to seize the user's most impulsive moment. And the platform recommended goods are often single and boring, the recommender is also very lack of object sense, which makes trust difficult to build.Some television stations in shaping the brand, through the mouth to shape the brand, but the various long video platforms are difficult to give a clear brand impression. It's hard to really "speak" a platform with a mouth or a spokesman. Therefore, the larger ability of long video is the ability to grow grass, IP shaping, the "opportunity" into a purchase, in order to let the media touch the manufacturing, service industry cake.Ai Qiyi home-made drama, for the platform to the upstream extension of the industrial chain provides the possibility. But the platform's content self-control logic more stay in the content exclusive level, still does not really extend upstream. The media became a noisy stage, but the invited stars retreated, the value of the stage itself is unsustainable. Therefore, only by turning oneself into a club can we give birth to more commercial value. Recently rely on "Youth has you 2", Ai Qiyi also did a lot of derivative programs and products, which is a good attempt to break the only production of the program. In addition to a large number of spin-off programs, during the program, Mengniu real fruit grain active version of Tmall monthly sales of more than 150,000. Ai Qiyi joint NEWBALANCE launched the "Youth has you" exclusive with the same five-color training clothes, 997H series, training students with the same shoes in the flagship store monthly sales growth.Throughout 2019, Ai Qiyi's "other revenue" of games, IP value-added licensing, e-commerce, live streaming, artist brokerage, etc. reached 3.7 billion yuan, accounting for 13% of total revenue, a record. But these products, for the time being, are not yet large. And whether IP development is sustainable, whether the user's consumption can be cultivated from the stage into habit, is a very big challenge to Ai Qiyi. In terms of variety content, the homogenization of the various platforms is very serious, which makes it more difficult for Ai qi art to construct "online Disney".
5Conclusion.
Ai Qiyi's content ability is indisputable, but any single point of breakthrough, can only be a lively time. And only by positioning themselves precisely in a specific crowd and content, "online Disney" attempts, in order to appear a continuous stream of user value transmission, thus forming an ecological closed loop. Tencent video dominates the sports circuit, and Aichi needs to find its own Mickey Mouse as soon as possible. On May 9th, Ai Qiyi established Beijing Gee Restaurant Management Co., Ltd. to enter the catering industry, the heart of diversity is called out. But when IP doesn't have sustained magnetism and heart force, it's hard to get lasting value from these attempts. As the leader of the domestic long video platform, Ai Qiyi is not the market leader. Whether it's home-made dramas or IP and spin-off shows, it's a trick traditional media has long played, and there's nothing new like Mango TV. At a time when traditional television stations are starting to set up MCN institutions and marching into short videos, Ai Qiyi is a little embarrassed. So Ai Qiyi launched the standard YouTube medium video product - with the moment.Ai Qiyi into the video field, B station can not get around. B station itself the community atmosphere, Ai Qi art for a short time is difficult to form. Although the content is the root of the platform, but the richness of the content ecology and the atmosphere of the circle, determines the time people stay. It's not something that can be achieved simply by building content. Therefore, Ai Qiyi want to from B station, or shake the sound, quick hand to grab users, it is not easy. Back-to-back Baidu's "on-the-go" is really most like YouTube. On May 13, Baidu Mobile Ecology announced that it wants to open up Achiyi, Encyclodeda and other product platforms. With more than 200 million users connected, it looks great. But you know, it's not just Google that's making YouTube, it's the recommended algorithms behind it, the advertising algorithms, Google's resources, and so on. Therefore, "on the moment" want to break through, more need to make up for the lesson is to improve their algorithmic ability, the user and content of the perfect match, and form a different from YouTube, can be called a profit closed loop.Of course, if this lesson can be made up for the aichi art itself is also very helpful. From the IT era to the DT era, to meet the user's personalized, thousands of people's needs, to achieve the customization of products and services, is the general trend of the times. At this point, short video to do more advanced, Ai Qiyi's digital ability is not enough. In addition to some hot dramas, the author rarely sees Ai Qiyi give really good-looking recommended episodes. In general, Ai Qiyi is still a content pool that requires people to search out the content. But in an age of information flooding, what people need is custom-made, high-quality content. The ability to match content with users is the king of short- and medium-term video, but also the reason for the recent outbreak of some information platforms, long video is actually the same.Only to make up the content and users match this lesson, in order to let Ai Qiyi really understand the user, for each user to form a thousand people a thousand-faced service, rather than inginstead of actually catering to that part of the identified user needs. Of course, it's also good for Aichi to find its own unique "Mickey Mouse" and make a unique "online Disney." Otherwise, there is only the advantage of user size, in the fox wolf competition of various long video platforms, short video to the medium-long video test case, Ai Qiyi is difficult not to rely on heavy money to buy drama to maintain the advantage.
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