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Why support byte skipping instead of Tencent winning iqiyi?

via:博客园     time:2020/7/11 15:24:05     readed:93

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Wen/Da Entertainment

Source: One Entertainment Watch (ID:yiyuguancha)

In 2020, it seems that anything is likely to happen. For China's video industry and the entire film and television industry, the biggest problem at present is not only when the cinema will open, but also who Baidu will eventually sell iqiyi to?

Tencent is seeking a 56.2 per cent stake in iqiyi, which it has approached with baidu, iqiyi's biggest shareholder, Reuters reported on Monday.

Baidu, iqiyi and Tencent all declined to comment. However, three days later, news came out that Tencent might withdraw from the bidding for iqiyi due to price problems, and Alibaba's name appeared in the ranks of bidders along with the news.

For the merger of iqiyi, a large company with a market value of nearly $20 billion, it is naturally a more undercurrent game process under the water. But in fact, in addition to Baidu as the seller and Tencent and Alibaba, another company is also mentioned frequently in this acquisition case, which is generally recognized as the byte beat of Baidu and Tencent's current strong rivals.

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Scene map of iqiyi in Nasdaq in 2018

One Entertainment Watch

Regardless of Baidu's negative attitude towards byte skipping, it's hard to imagine that byte hopping, which loves to create competitive advantages by spending money, can resist such temptation. After all, once Tencent really gets hold of it, the war in the field of long video will really be over. But if iqiyi can be directly brought under his command, byte skipping will become a super new force in the field of long video.

Long video war, can not hold

Now, behind the three major domestic long video platforms is bat, which used to be regarded as the three giants of China's Internet. Tencent built Tencent video, while Baidu controlled iqiyi and Ali finally got Youku, which merged with tudou.com, through acquisition. Regardless of the content and operation strategy, if we try to find out what the three video platforms have in common, there is no doubt that they are all losing money and never making profits.

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Graph source network

Iqiyi's 2019 financial report shows that the annual content cost is 22.2 billion yuan, and the annual operating loss is still as high as 9.3 billion yuan; Tencent's 2019 financial report disclosed the operation of Tencent video for the first time, saying that the video business loss was far lower than that of its peers, but it was only controlled to 30 Alibaba has never released the number of Youku members and the specific amount of losses, but Youku has always been in a state of loss, and it is no secret that the whole large cultural and entertainment sector has long been a drag on Ali. In the financial report in 2019, the overall loss of Alibaba's entertainment industry, including Youku video, is 157.96 Billion yuan, most of which is obviously caused by Youku.

Long video is an industry with heavy assets and high investment. From the perspective of the cost of each company, it costs a lot to buy content and compete for copyright. In the domestic abnormal film and television environment, it is not cheap to make content by ourselves.

Tiktok is at the other end of the scale, but long video is becoming more and more powerless in revenue. Early Kwai's advertising revenue is the main revenue, but now the advertising market is being eaten up by the newly rising short video represented by jitter and fast hand. The PUGC video area is also constantly carved up by B stations, mainly based on social and UCG.

The successful case of Netflix makes youaiteng start to expand the number of members and increase the income of members as the goal. However, despite the significant growth in the number of members, the actual membership fee can not be significantly increased. Under the background of more than 100 million subscribers on the head platform, due to the fierce competition, any one who rashly increases the membership price may face the impact of competitors and lose members.

Independent iqiyi is in

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The apple orchard model of iqiyi

From the perspective of revenue, since the third quarter of 2019, iqiyi's revenue has reached 7.4 billion yuan, and the growth rate of revenue is less than 10% for the first time. This situation has not been improved much in the following two quarters. Specifically, iqiyi's revenue mainly comes from two businesses: membership subscription fees and advertising. In 2019, the two businesses have delivered very different results.

Therefore, at the current juncture, the news that Baidu intends to release iqiyi shares in its hands is obviously not groundless. Among the three video platforms, iqiyi has strong self-control and sufficient industry qualification, but it is still in the loss, but it is the one with the least supply. Although Baidu is still the largest shareholder of iqiyi, its net profit in the first quarter of 2020 is only 3.1 billion yuan. Baidu, which has been lagging behind Tencent and Alibaba for a long time, has been unable to give iqiyi a blood transfusion.

In addition, baidu's only dominant desktop end is also difficult to bring iqiyi any traffic dividend, because long video competition glue, so long video business for baidu itself may be re-evaluated. It is no exaggeration to say that both sides should seek each othe

Zhang Yiming, who is rich and generous, is expanding his ambition for long video.

Forced conversion of watermelon video,

It's better to throw money to iqiyi

From the previous watermelon video and byte hopping layout of the film and television industry, we can clearly see the ambition and investment of byte skipping in the field of long video. The purchase of iqiyi will enable the previous layout to directly obtain an important super display platform.

Apart from money, it's hard to see that they have any conditions suitable for the long video industry from the products and revenue logic of byte hopping.

Whether today's tiktok or jitter, its core competitiveness is always recommended by exclusive algorithm, constantly recommending content to users, and then proceeds through advertising information that is constantly updated.

And come to the long video field, although at present each country still has the advertisement, but the film and television content often exceeds 30 minutes to 1 and a half hours length, decided the user to stay in the fixed page time will be greatly extended, and for the film and television works, the recommendation algorithm is very difficult to have too much effect. This makes the advantage of byte jumps difficult to play out.

However, the large-scale purchase of film and drama copyrights, the large-scale poaching of up owners from competitors, the budget of 4 billion for self-made variety shows, and the continuous investment in the upstream and downstream of films and TV series make it impossible for the outside world to ignore the attempt of byte skipping to enter the field of long-term video.

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A free Premiere of the movie "the lost mother" in watermelon video

A common saying in the industry is

A byte beat may not be the ultimate goal of achieving Netflix pure business model and industry status, but if you have the chance to win it is called

A combination of viral short video, PUGC medium and long video, and video-level long video may make it possible to create a balance between advertising-based algorithms and member-paid dual-track revenue.

The wizarding company, which has been poached by heavy money, has released its first exclusive content in watermelon videos, but it has been in the shaking sound for only a week, with a total of 2.08 million fans accumulated by 33 videos, and the growth rate is not unpleasant.

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Watermelon video and jitter on tiktok's home page

In addition, watermelon video forced transformation process, even if Zhang Yiming constantly smashing money, but also a lot of shackles, whether watermelon video hatching ability and operation ability, in the last two years.

Iqiyi's mature self-control ability and unlimited expansion of resources in the industry can quickly grasp the core weapon to win the long-distance video battlefield with only a hard hearted byte beating. Why do we have to struggle to force watermelon video?

Worldwide, even Disney and Netflix,, which are as good as Facebook、Google or content-hungry, haven't had a platform that has more than 100 million users in all three different video domains. Now, I'm the one who won

Tencent Ali byte Three Kingdoms kill,

Competition can benefit users

At this time, selling iqiyi shares may have more advantages than disadvantages for both sides. The only problem is, who will Baidu hand over this ten-year-old platform to.

In a Reuters report, people familiar with the matter said the cooperation between Tencent and iqiyi will improve the bargaining power of both parties in producing and purchasing content, and reduce marketing costs, otherwise these costs will be used to steal users from each other.

The above mentioned points are obviously also the current video platform is not profitable several important reasons, obviously in the current content platform, the most capable and ambitious to win to receive iqiyi is really only left Tencent video.

On the one hand, Tencent video relies on Tencent's huge membership system, especially the diversion based on wechat and QQ, which gives it a congenital advantage in attracting customers and advertising.

With Tencent's strong internal resources and external bargaining power, Tencent's video has been in a state of loss all year round, but it still has the least loss relative to its two competitors, in 2019

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Press conference on cooperation between Tencent pictures and Xinli media

On the other hand, Tencent video and iqiyi do have certain complementarities in the content level, especially the relatively mature self-made content of iqiyi in recent two years can bring more diversified content to Tencent video.

After merging iqiyi, Tencent video will undoubtedly become the absolute leader in the field of long-term video in China. It can almost rely on its own efforts to end the long-standing money burning war, and can also invest more resources in resisting the encroachment of short video and medium video on user time.

In addition, the growth of new users of Tencent video is becoming more and more difficult. According to Tencent's financial report in the first quarter of 2020, the growth rate of Tencent video members can't match that of iqiyi. The number of new registered users increased by 6 million in the first quarter, only half of that of iqiyi. Tencent video self-control ability of the shackles also began to appear. Through the acquisition of iqiyi, there is no doubt that it can directly bring in at least tens of millions of new users.

The ability does not necessarily mean that it must be done. Tencent video's motivation to acquire iqiyi can only be to reduce costs or improve profits and competitiveness.

However, it is also difficult to say whether the merger of the two sides can form a situation in which one plus one is greater than two. After all, the number of users may not be satisfactory. Based on the low subscription fee, most users subscribe to both platforms at the same time, and the merger may significantly reduce the number of users.

And the same came out

Today, Alibaba through a series of acquisitions to create a large entertainment business, seems to have become the largest business in Alibaba. In June this year, Zhang Yong even personally ordered him to transfer Zhuo Zhuang ran, CTO and Youku COO of Ali grand entertainment, to Feizhu. Zhuang zhuoran is the young executive who has achieved the best performance in the entertainment sector in the history of his tenure. In such a state, it is hard to imagine that Ali will spend another 10 billion yuan to buy back an iqiyi and increase investment in integration.

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(Zhuo Zhuang ran)

Almost all analysis will mention that Tencent's acquisition of iqiyi is more to prevent byte skipping. After all, in recent years, almost no company has caused bat more troubles than byte skipping.

But obviously, even in the purchase of iqiyi, byte skipping may also make Tencent not so comfortable.

After all, in the commercial market, the high price has always been the simplest and simple truth, and it is not new that Zhang Yiming and byte jump give high premium on key acquisitions. Baidu takes the initiative to let the byte jump into the long video competition of burning money mire for them is actually also happy to see its success.

As an unlisted company, byte skipping will not release most of the key financial data. However, in January 2020, interface News reported that byte skipping completed the whole year's performance, with annual revenue of more than 140 billion yuan in 2019, an increase of nearly 280% compared with the previous year. People familiar with the matter also disclosed that byte skipping has more than $6 billion in cash at present. In addition, according to the previous report of Bloomberg news, some private equity transactions have valued the Chinese company in the secondary market between $105 billion and $110 billion.

Therefore, no matter in terms of revenue capacity, market value or cash flow, byte skipping is not as good as Tencent and Alibaba, but it has already been in the first echelon of domestic Internet enterprises. More importantly, in terms of globalization, tiktok has achieved something that neither wechat nor Taobao has ever accomplished, and the long video platform has also come to the sea.

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Global downloads of tiktok (chart source: sensor tower)

Once tiktok really starts to face the problem of globalization, byte skipping needs to open up a field in the domestic market and provide more imagination for its 100 billion valuation.

Back at the user level, Tencent's video and iqiyi merger is clearly not a good thing for users, Tencent let users

For any industry, competition is more beneficial to both product form and users. This is why if byte leaps and takes iqiyi, it will form a better situation. What China's film and television industry needs at present is precisely a troublemaker, not a reaper.

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