Summit·People| Xiao Du Fund Yin Han: Short Video evolve again, what three obstacles must we overcome?

Yin Han believes that after Short Video enter the capital cooling-off period, traffic acquisition, content ecology and profit model are three obstacles that the industry needs to overcome urgently.

The 2017 China Pan Entertainment Innovation Summit hosted by Een was held as scheduled at the JW Marriott Hotel in Beijing on November 29. This year's summit has the theme of "New Entertainment" and contributed three major venues and pan-entertainment index ceremonies in one day, covering 5 roundtable forums and 12 keynote speeches.

At this summit, Yin Han, CEO of Xiaodu Fund and Vice President of Baidu's Video Investment Department, delivered a keynote speech entitled "Value Investment in New Media PGC Content". Yin Han believes that after Short Video enter the capital cooling-off period, traffic acquisition, content ecology and profit model are three obstacles that the industry needs to overcome urgently. At present, all major video platforms are spending huge sums of money to subsidize Short videos PGC, and practitioners should make good use of platform dividends; in terms of content layout, they must be based on high-quality content and grasp the trend of verticalization and scale; in addition, In the case that the overall industry's profit ratio is less than half, platform subsidies, Short videos customization, advertising and content implantation are still the most important ways to make profits.

The following is a transcript of the live speech:

Yin Han:

Hello everyone, thank you Yi En for giving me this opportunity to share with you some of our thoughts on Baidu Video in the field of Short Video.

I believe that everyone is no stranger to the mention of Short Video. This has become a mainstream way for us to entertain our daily content. For example, when we encounter a major event, we will habitually watch the video playback. Some blockbusters or hit dramas are released. We don't have time to watch it. We can quickly get conversation information with everyone through a minute or two to watch. When we go shopping on e-commerce platforms, we often see the matching of some clothing and accessories through videos to help us make shopping decisions. The entire Short Video have gradually replaced pictures and texts, becoming the mainstream way for everyone's daily entertainment, and have also become a standard feature on major platforms, whether media platforms, social platforms and even e-commerce platforms. It can also be seen from the figure that Short Video have indeed experienced explosive growth since 2016, and this trend has continued in 2017. There are many reasons why this phenomenon occurs. The deployment of 4G and 5G, including WIFI, and the entire network, and everyone no longer cares about mobile phone costs. Video is a perfect way to obtain information. Under this premise, more and more people like to watch some Short Video anytime and anywhere. The explosive growth of Short Video has further promoted the fragmentation of content consumption. In the past, we basically had time to watch TV dramas and videos for the whole period at night. With the explosion of Short Video, the peak period of consumption of Short Video per capita per day has increased to 6-7 times, and the per capita duration has also steadily increased.

Looking at the changes experienced by the entire Short videos field from the perspective of capital, we have seen that from 2016 to 2017, the financing of the entire Short videos was a hot period. There were about 100 investment and financing of Short videos in 2016-2017, but we also have to see that there are now nearly 20,000 players on the entire Short videos track, and only 5‰ have received Series A financing, so we can say that the entire Short videos has entered a capital cooling-off period. Why did Short Video go from rapid capital boom to a cooling-off period? What are the reasons? The entire Short videos is distributed through the Short videos platform and uses personalized recommendation algorithms to distribute content. This content production mechanism and decentralization mechanism have led to the rapid accumulation of many people in the entire Short videos field. On the track, Short videos itself has some advantages, such as its large production scale and low cost, which also leads to content entrepreneurs particularly wanting to use Short videos to start businesses. So this track was instantly crowded with nearly 20,000 players with Short Video, and even some people from traditional media came to this track to carry out dimensional-reduction attacks.

In such a hot situation, some of the thresholds and bottlenecks encountered in the field of Short Video have been quickly exposed. In our view, the three thresholds faced in the field of Short Video are traffic acquisition, how to obtain traffic faster and more, how to let your content win, and the third is how to make money.

Learn about the three thresholds faced in the field of Short Video. The first is traffic acquisition. The entire Short videos relies on Short videos platforms for distribution, and traffic is basically controlled by these platforms. But the good news is that the entire Short videos platform is still in a state of racing. The traffic dividend of the platform is still there. We often hear that a certain platform subsidizes short video entrepreneurs with 1 billion, 2 billion or even 10 billion yuan. For Short videos entrepreneurs, the dividends of the platform are still there. We need to hold onto the thighs of these platforms tightly. The so-called traffic mentioned here may be a concept of large traffic. It is not only what we think of as a platform to divert content, but also a kind of large traffic. For example, we cooperate with the platform on data and have some accurate data to release in better aspects. We cooperate with the platform on the brand, and even develop some customized programs for the platform on the program, including cooperation with the platform on capital and business to obtain the concept of large traffic.

The content link is actually firmly held in the hands of Short Video entrepreneurs. We know that in 2016 and the first half of 2017, because the content of Short Video was very scarce, there were some low-quality content on the entire platform, which has quickly attracted a lot of traffic. However, as this industry becomes rich, more and more high-quality content or high-level entrepreneurs come to this track, our content must win with high quality. High-quality content is our foundation. Traffic will increasingly gather towards high-quality content, and high-quality content will gradually form its own IP and form its own brand, so high-quality must be a key to this part of our content.

In addition, we have seen the following trends in content, such as extending to vertical categories. If you often have the opportunity to visit Youtube, you will find that the categories and richness of domestic Short Video, including quality, have a lot of room than Youtube. Short Video entrepreneurs have a great opportunity to enter these vertical fields. We can also see from some domestic data that pure entertainment data used to occupy the absolute head, but now more and more like pan-entertainment. Even some other vertical categories of traffic are dispersed.

Another trend is MCN and MCN forms content matrices and Short Video alliances through contracting or self-building. What are the benefits of MCN? It generates content in a rapid and large-scale way, and can achieve industrialization and streamlining in terms of upper traffic and lower monetization, and can quickly cover vertical categories. We believe that MCN is also a trend in terms of content. Short Video can quickly cover vertical categories and scale them up.

The last threshold may also be the most difficult one, the question of how to make money when realizing profits. I believe this may not only be a challenge for Short Video entrepreneurs, but also for the entire Short Video industry. We can see that in incomplete statistics, more than half or more of Short Video start-ups are in a state of loss. Even the vast majority of income comes from subsidies from the platform. The entire realization can be said to be very bad, but precisely because it is bad, it may also be an opportunity for us.

This year, Baidu Video is also focusing on exploring ways to realize large-scale monetization, such as in-depth advertising cooperation with our brand advertisers, and jointly developing many advertising combinations with PGC on our platform, so as to connect the two. We hope that through our efforts, we can accelerate the commercialization of Short Video monetization and explore a path to large-scale monetization. In addition to monetization, Baidu Video has also brought some support to the PGC of our platform in terms of traffic. In addition, we have also established a Xiaodu Fund to provide financial assistance to these Short Video entrepreneurs and PGC content. Therefore, we also hope that Short Video entrepreneurs can further strengthen cooperation with Baidu Video.

In our view, Short Video or the entire content industry is a long-term outlet. Maybe capital is sometimes hot and sometimes calm, but this outlet will not be eliminated. In a sentence from the 19th National Congress of the Communist Party of China, this may be a growing need of the people for a better life. This is a long-term demand, so in our opinion, this trend will be there for a long time. Baidu Video believes that everyone present at the venue will also It will help the development of the field of Short Video or pan-entertainment. I hope everyone will gain both fame and fortune in this.

That's all for today's sharing, thank you all!

Editor: yvonne