Video websites taste the benefits of paid music, and social networking sites follow suit

Member subscription paid services are a product of this trend and have been successfully used in various fields such as streaming media, social networking, media information, and online retail. Companies such as video sites Netflix, Amazon and Apple have gained early insight into this trend and achieved great success.

As income levels continue to increase, consumption upgrades are accelerating, copyright awareness is increasing day by day, saving choice time and enjoying quality services have become the choice of many netizens. Member subscription paid services are a product of this trend and have been successfully used in various fields such as streaming media, social networking, media information, and online retail. Companies such as video sites Netflix, Amazon and Apple have gained early insight into this trend and achieved great success.

Video websites have tasted benefits

. Among the most eye-catching Internet companies that have developed during this period, Netflix, Amazon and Apple must be among them. Netflix's market value increased by 133% in 2015 and 50% in the most recent year, ranking among the top ten Internet companies in the world; Amazon's market value recently exceeded US$400 billion, not only surpassing Facebook, but also becoming the world's fifth largest company; two years later, Apple's market value once again exceeded US$700 billion, moving towards a market value of one trillion yuan, leading the way. One thing these three strong companies have in common in their business models is that they all adopt a member-paid subscription model.

Netflix is a company that is constantly changing and innovating. It first disrupted offline DVD rental stores through online mail-order, and then disrupted DVD rental through streaming media, and is challenging HBO and other radio and television networks.

Membership is Netflix's basic business model, and this company is also the earliest, most thorough and most successful Internet company to adopt a membership subscription model. In the U.S. market, Netflix offers three levels of membership services: basic, standard and premium, with monthly fees of $8,$10 and $12 respectively. Subscribers can watch all programs anytime, anywhere in their movie library, without ads. At the end of 2016, Netflix services had covered more than 190 countries and regions around the world, with more than 90 million members, of which 89.09 million paid users, accounting for 95%.

The fee-based membership system has brought huge sums of money to Netflix and stimulated the transformation of video websites that had previously regarded "free" as a selling point. Hulu officially launched the subscription service Hulu Plus in 2010, and announced the end of the free viewing model in August 2016; YouTube, the world's largest video website, also launched a paid subscription service in October 2015, gaining 1.5 million users in one year. The broad market prospects attract new entrants. Amazon launched its independent Prime Video video streaming service in the United States in April 2016. At the end of that year, PrimeVideo was opened to 200 countries and regions around the world.

Member payment has become a development hotspot in China's video industry. Yien data shows that in 2016, the number of effective video payment users in China reached 75 million, an increase of 241%, becoming the world's third largest video payment market after North America and Europe. Among them, the number of paid members of LeTV, iQiyi and Tencent Video has exceeded 20 million. According to iResearch data, it is expected that user payments will account for 38% of total video revenue by 2019, becoming the second largest source of revenue in the video industry.

The emergence of music websites to imitate

music streaming is one of the most mature areas for member-paid applications, and the competition is extremely fierce, among which Spotify and Apple's Apple Music are represented. Founded in 2008, Sweden-based Spotify is the world's largest music streaming service, with more than 100 million monthly active users and 40 million monthly paid subscribers. Relying on the advantages of terminal equipment, Apple launched Apple Music, a music streaming service in 110 countries and regions in June 2015. In just one and a half years, its paid subscribers exceeded 20 million. Amazon is a fierce new player, launching its new music streaming service "Amazon Music Unlimited" in October 2016. Amazon has also launched an exclusive subscription plan "for Echo devices" that charges just $4 a month, half the price of competitors.

While continuing to provide free services, domestic online music has begun to focus on developing membership payment services, and progress is rapid. Kugou began to implement paid services at the end of 2015, and the number of paying users exceeded 10 million in less than a year; the number of paying users of QQ Music also reached 10 million in 2016; the number of paid Music subscriptions of Netease Cloud increased threefold in the first half of 2016.

Amazon has emerged

in the field of online retail. Amazon pioneered a member subscription service model and achieved great success. Amazon launched Prime, a VIP-like membership service, in 2005. Consumers only need to pay an annual fee of US$79 (now increased to US$99) to enjoy free two-day delivery service and can use e-books, music, videos and other digital content products for free. For specific groups of people and specific products, Amazon has also launched "Amazon Students" and "Amazon Mother". They can enjoy other specific benefits in addition to the Prime service.

In the industry, Prime is known as Amazon's "strangest and most successful business model" and plays an important role in promoting consumption and increasing user stickiness. In April 2016, Bezos first elaborated on Amazon's three major business pillars in a letter to shareholders, with Prime among them. Data shows that as of the third quarter of 2016, Amazon has 65 million Prime members in the United States, and 52% of Amazon's U.S. consumers are Prime members; the average annual expenditure of Prime members reaches US$1200, twice that of non-members. Prime service began to be internationalized in 2007 and launched in 2016, two populous countries, India and China. Currently, Amazon has launched Prime services on 14 sites except Mexico and the Netherlands.

The success of Prime has made domestic e-commerce giant Jingdong envious. In 2015, Jingdong announced the launch of Plus membership service, and this year it began to increase its promotion efforts. Unlike Amazon Prime's main free shipping and streaming services, Jingdong Plus's biggest feature is exclusive price discounts. For a bottle of French red wine priced at 250 yuan, the exclusive price for Plus members is only about 150 yuan. This is very attractive to those who rely deeply on online shopping.

Social networks also play membership-based

social networking sites often divide members into ordinary members and advanced members. Advanced members can enjoy certain privileges and value-added services. Among the top three global professional social giants, Xing of Germany and Viadeo of France both use member fees as their core profit models, with 50% and 40% of their revenue coming from member paid services respectively; global workplace recruitment service giant LinkedIn launched advanced member subscriptions in 2007. Service, member fees were once its largest source of income, and 17% of its revenue still comes from member paid services.

In China, QQ Super Membership is a paid membership service. In addition, the paid membership system is most widely used in the field of dating and social networking. More than half of Jiayuan's revenue comes from member fees.

In fact, over the past 20 years since the commercialization of the Internet, the consumption habits of netizens have also been constantly changing. Member subscription services effectively meet people's needs for accurate services in the era of content overload. They have become a very mature business model and an inevitable result of the in-depth development of the Internet. In the future, people paying for high-quality content and excellent services will become a common practice in the Internet industry.

Editor: Nancy