Most video websites are still losing money. How to solve the profit puzzle?

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Among them, the game between members and advertisements, two major factors that affect profitability, is considered to be a difficult puzzle for video websites. Among them, the game between members and advertisements, two major factors that affect profitability, is considered to be a difficult puzzle for video websites.

Logically speaking, with ultra-high clicks and expanding membership, the profit of video websites should not be a problem. However, the truth is just the opposite. Most video websites are still losing money. Among them, the game between members and advertisements, two major factors that affect profitability, is considered to be a difficult puzzle for video websites. The palms and back of their hands are all flesh. How to balance and grasp the balance? In the new entertainment ecosystem, video websites still have a lot to do.

Original title: Video websites solve profit puzzles. The year 2016 has just passed was a year of rapid development for video websites in China.

It has become the norm for an online audio-visual work to have more than 100 million clicks and views. The newly released "2016 China Online Audiovisual Development Research Report" shows that as of June 2016, the number of online video users in my country reached 514 million, accounting for 72.4% of the total number of Internet users. Not only that, in 2016, the number of members on almost every video website doubled.

Members: A large number does not mean that they are willing to pay. Anyway, 2016 is an unusual year for video websites that have been dreaming of "making money sitting" for many years.

During the year, with the increase in membership restrictions on video websites, the intensification of crackdowns on pirated resources, the seizure of exclusive content, and various bundled sales, the membership sales of various video websites doubled. In March 2016, LeEco announced that the number of paid members exceeded 20 million; in June 2016, iQiyi announced that the number of VIP members exceeded 20 million; in November 2016, Tencent Video announced that the number of paid members exceeded 20 million; In November 2016, LeEco announced that the number of paid members exceeded 50 million for the entire ecosystem (including film, television, music, sports, etc.); in December 2016, Youku announced that the number of members exceeded 30 million... However, although the numbers are good, the authenticity is not so good.

LeTV membership is mostly accompanied by free hardware; the growth of Youku members directly benefits from Alibaba, which uses activities such as "Double 11" to give away membership for a certain period of free; the promotion of Tencent members is related to the joint promotion of various QQ diamonds to jointly organize preferential activities... Many analysts interpret this kind of "water-filled" member registration as a "singing too many phenomenon", which is to increase the number first and give the public the impression that paying has become a habit of people.

In fact, when the time for giving away these members based on various "coincidences" comes, how many members have developed the habit of paying and are willing to renew the fees? I'm afraid the situation is not so optimistic. However, for most video websites, such "seduction" behavior has to be done, because the number of members is not only a reflection of a video website's comprehensive strength, but also the only way to cultivate users 'awareness of payment.

Advertising: Long time does not necessarily mean high value. The membership ecosystem is imperfect, and advertising is still the main source of income for video websites.

Of course, video websites are not short of advertisers. However, with the development of the times, the behavior of video websites to post advertisements at random places has made users disgusted.

Our reporter observed that the advertisement before a hit drama in Sohu Video started lasted for 75 seconds; the advertisement before an episode of iQiyi TV series was broadcast lasted for 80 seconds; and the advertisement time for a 10-second video in LeTV reached 30 seconds. In addition, websites such as Sohu Video and iQiyi will also insert a 5-second "Haike Tour" advertisement on the program playback terminal. Add the end advertisements after the video playback, pop-up advertisements during playback, advertisements on both sides of the video program, etc. Video websites have placed almost every place where advertisements can be placed.

With so much advertising, will video clicks buy it? The answer is no. Relevant data shows that 16% of online video users refuse to watch pre-placed ads, and 39% say it is difficult to see the 30-second ads. Abroad, the situation is similar. A survey showed that the completion rates of a 30-second advertisement in long videos, medium videos, and Short videos were 90%, 73% and 63% respectively.

"The longer the video is, the more tolerant the clicker will be for advertising; and vice versa. This is a unified understanding of the tolerance of online video advertising in foreign countries." Analysts at Analysys International pointed out that the expression of many online video advertising time is too single,"completely failing to leverage and utilize the more relatively interactive value transmission of the entire new media." From this perspective, if advertising lacks enough creativity, it will not be as long as possible, and the more the better.

Game: Change user perceptions or change yourself?

Most netizens in China still have a free attitude towards online video. Based on this premise, some users don't even mind longer and longer advertisements.

For some member users, how to get their money's worth is their main consideration. At present, most video websites reflect member value through ad-free, member first viewing, exclusive clarity, and member exclusive content.

However, some video websites classify members through platforms, content, etc., which makes many members feel cheated. In this regard, some video websites that have developed based on member interests face more difficulties. Take the bilibili website as an example. In May 2016, the website added patch ads to five new films, which was strongly opposed by most users. In October 2016, the station launched a "big member" system of 25 yuan a month and 233 yuan a year. As a major member of the website, you will be able to enjoy "major member" benefits including viewing "titanium alloy quality" videos (1080P native resolution videos), expressions in the comment area, and spatially autonomous head pictures. However, this move is regarded by many veteran members as a landmark event that the station is commercialized and reduced to a money-making tool. For a website that started as a community of user interests, such opposition means that advertising has hurt the group sentiment of website members, which is related to the survival of the website.

Analysts believe that the key to the future development of websites like bilibili should be to find a balance between commercialization and cultural identity, glue core users and ordinary users together, and build a new cultural community.

For most video websites, members don't want to watch ads, so they need to be given enough permissions; ordinary users mean traffic, and traffic means that netizens have enough popularity to attract ads. Such games and balances are indeed difficult to solve.

"For video websites, the scale of paying users means a more stable source of revenue. Compared with the advertising model, this is a more stable revenue structure, which is conducive to helping video websites improve content procurement, content production and user experience. However, advertising revenue is still the main source of revenue for video websites, and the proportion of user paid revenue will increase significantly." Ma Shicong, an analyst at Analysys New Media, believes that video websites should work hard on good content, better experience, and greater protection of user rights in the future, so as to attract more users to pay.

"As long as the proportion of user fees and advertising revenue is evenly balanced, video websites will take a big step towards profitability." Ma Shicong said.

Editor: yvette