CEO of iQiyi Gong Yu: The online audio-visual industry is not far from full profitability

On December 8, at the 4th China Online Audiovisual Conference, Gong Yu, founder and CEO of iQiyi, arrived as scheduled. As an industry magnate who has participated for several consecutive years, Gong Yu said with emotion: "After ten years of development, the online audio-visual industry can finally feel mature now." Where is maturity reflected? Gong Yu said that the first is that the market concentration of comprehensive audio-visual websites has increased, and the second is the rise of original content.

As Nie Chenxi, deputy director of the Central Propaganda Department, director and party secretary of the State Administration of Press, Publication, Radio, Film and Television, and director of the National Copyright Administration, said,"Online audio-visual is facing rare development opportunities." The online audio-visual industry is rising day by day. At the 4th China Internet Audio-visual Conference, we not only heard the good news that the online audio-visual industry is approaching profits, but also received the latest information on the deep integration of the Internet.

Where is maturity reflected? Gong Yu said that the first is that the market concentration of comprehensive audio-visual websites has increased, and the second is the rise of original content.

Although the online audio-visual industry had original works ten years ago, Gong Yu believes that truly high-quality and large-scale original works just started a year or two ago. Excellent original online content not only brings traffic and member income to video websites, but also gives birth to an accessory product-a new generation of creative personnel has been cultivated.

So,"When will the day come when the online audio-visual industry talks about profitability?" This is a question that reporters ask Gong Yu every year. In 2014 and 2015, Gong Yu told reporters: "This year is still not the time to talk about profit." Yesterday, Gong Yu finally said: "I have expectations for iQiyi's profit timing, but I can't announce it yet. Regarding the profit nodes of the industry, I think this industry is not far from comprehensive profit. My analysis is not based on good wishes or subjective judgments, but based on rational analysis based on basic data such as costs and income."

There is still a chance for small companies

. Gong Yu recalled the scene when he was preparing for iQiyi more than six years ago.

"At that time, I studied domestic audio-visual websites and collected more than 100 audio-visual websites in my favorites. I watched them day and night for many days." At that time, Gong Yu's feeling about the audio-visual industry was that the characteristics of each website were unclear, and the difference between the smallest website and the largest website was not very big.

The consequences of homogenization can be imagined. Today, six years later, the audio-visual industry has undergone a major reshuffle, and the market concentration of comprehensive audio-visual websites has increased significantly. "This is a sign that the market is mature, and everyone also hopes that their company will come to the end." Gong Yu said.

Looking at the current mainstream comprehensive video websites: iQiyi, Tencent, Youku Tudou... there is support from Internet capital like BAT. Does this mean that the online audio-visual industry is moving towards oligopoly and small companies have no chance?

Gong Yu responded in an interview with reporters after the meeting that market concentration has increased for these comprehensive commercial websites. But on the other end, that is, professional and vertical audio-visual websites, are actually more open. Even in every field, one, two or more excellent websites can be born. "For example, when it comes to 'second element', everyone knows about Station B. This kind of website is very difficult for our comprehensive website to build."

The payment model is fairer

. In Gong Yu's view, another sign of the maturity of the online audio-visual industry is the rise of original content. High-quality original online content not only brings considerable traffic to audio-visual websites, but also cultivates a new generation of creative personnel and makes the audio-visual website company's revenue model richer and healthier.

Especially for the paid model, the number of paid members of iQiyi has grown rapidly in the past two years. In Gong Yu's view, the payment model is quite fair.

"The traditional business model in our audio-visual industry is the advertising model. Whether it is a TV station or a website, a few people decide whether to purchase or not, or the premium of a few people determines the price, although there are various mechanisms to ensure fairness and rationality. But after all, it is not as good as all users deciding whether a work is good or bad." Gong Yu further elaborated,"From a long-term overall perspective, we believe that the payment model is fairer. A fair business model or transaction model is more conducive to high-quality works getting more returns, so this business model is also conducive to improving content quality."

"Fear and fear every day"

Even original content and payment models have become the general trend of the online audio-visual industry. But when talking about the shortcomings that this industry is facing, Gong Yu said frankly that high-quality original online content is actually far from enough.

"We lack too many good stories, good models, and good ideas. Although online original works have cultivated some new home players in the past, they are still far from market demand." He analyzed: "In this case, the remuneration and remuneration of actors or creators skyrocketed. This is determined by the relationship between supply and demand in a market economy-the demand side is too strong and the supply side is too small."

"The new generation of creative personnel is a gap in the current market and an opportunity." Gong Yu said that online audio-visual companies are now doing a lot of things to translate traditional film and television industry content onto websites. This simple translation is not a successful business model. "The work of translation must be done, but breakthroughs are innovation."

In his exchanges with reporters, Gong Yu also admitted that his anxiety came from innovation. Although iQiyi ranks at the forefront of the industry, he is "in fear" every day. "I wonder every day, are there any innovations today? Not today, it's okay. Not yet tomorrow, not yet this week, then I am very anxious. It is not only innovation in content, but also innovation in technology, innovation in business models, etc. So whether we can continue to innovate is my biggest concern."

Gong Yu also talked about big online movies, and he said he was very optimistic about this form."For big online movies, we will definitely focus on the 'head market' of big productions, but we will also give sufficient living space for works targeting the focus market. Let literary and artistic works and niche commercial film types have more space."

Editor: yvette