Feng Xin, CEO of storm: in 2017, storm business will fully embrace information fluidization

After the financial report was released, the stock price of storm fell. You know, when it landed on the gem in early March 2015, Fengfeng once rose to the high price of 148 yuan / share with 28 daily limits, but now the share price of Fengfeng Group has been hovering around 40 yuan for a long time

"Storm once enjoyed a huge dividend of a shares, so we have the opportunity to further develop, but at the same time, storm also needs to bear the problems of a shares. There is nothing to complain about."

In an exclusive interview with reporters, Feng Xin classified the dilemma of Internet companies such as storm in A-share market as the dilemma of understanding: "the A-share market's lack of understanding of the Internet lasted for at least five years. A-share market operators and analysts did not understand the Internet as well as U.S. stock analysts. When they didn't understand it before, they blindly pursued the concept and found the foam, but now they are completely looking at the Internet with traditional thinking."

Feng Xin's traditional thinking refers to the business model of manufacturing industry. Revenue, production costs, channels, marketing, advertising, operating expenses and profits can be directly quantified and evaluated

Feng Xin tried to build a similar model to let investors clearly see the real state of the storm

As shown in the above figure, Feng Xin divides the development of Internet companies into three stages. The construction phase focuses on the construction of products, core modules, online and offline sales channels, APRU modules and user modules; The focus of the entry stage is to generate continuous data, which will increase ARPU value through the reduction of customer acquisition cost, so as to usher in a single user profit inflection point and business profit inflection point; The last is the harvest stage, and the business as a whole enters the profit-making period

"The customer acquisition cost of a user will decline with the growth of volume, and ARPU value will rise little by little from advertising to e-commerce. From zero, we will encounter the first inflection point, which is called the single user profit point; in addition, there is a range, which is the profit point deducting the management cost. If we find these two points, we will find that this business is the same as the traditional industry."

He hopes that by clearly telling investors the specific stage of the Internet company, investors can consider the value of the Internet company and understand the position of the company through this model

The following figure shows the business schedule drawn by storm VR according to Feng Xin's theoretical model

whether the new financial model proposed by Feng Xin can impress investors is still unknown. At present, the most noteworthy business is storm TV, the largest source of revenue at present.

storm TV is a business that storm group began to do after it was listed. In July 2015, storm group announced the establishment of storm TV in conjunction with ririshun, aofei animation and sannuo digital. In December of that year, the first generation of storm super body TV was officially released.

the annual report shows that at present, the proportion of storm TV in the total revenue has replaced the original advertising revenue and become the first. According to the financial report, the company's annual advertising revenue in 2016 was 578million yuan, accounting for 35.14% of the total revenue, and this business accounted for 70% of the operating revenue last year. The largest contribution in 2016 was the revenue from commodity sales, accounting for 55.68% of the annual revenue. The revenue from commodity sales here mainly refers to the revenue of storm TV.

storm TV sold about 800000 units in 2016, with a sales revenue of 930 million yuan, a year-on-year increase of 644%. The average revenue (ARPU) of storm TV users increased 10 times in 2016, with an annual average of 61 yuan and an average customer acquisition cost of about 400 yuan.

but it cannot be ignored that the terminal cost of storm TV accounts for 88.03% of the operating cost of the whole storm group.

the cost problem is a common problem faced by the entire TV industry." last year, everyone was unlucky, and the panel price rose too fast. " Feng Xin said with a wry smile, but he pointed out that the problem is not the rising cost, but the time difference between the rising cost and product pricing. "At that time, retail has set prices, and it takes time to change. If we don't hurry, we lose money. As a result, everyone loses money, and now we have made adjustments. No one in this industry is burning money now, but last year, the price suddenly rose, and we lost."

Feng Xin mentioned that the customer acquisition cost of storm TV will be reduced this year. He did not expect storm TV to become the first in sales, but hoped that storm TV could put the boot rate, user use time and user interaction times first. What storm TV still needs to do this year is "differentiation"

The content of storm TV is to access storm video and iqiyi. "We call iqiyi's platform, and the TV system is storm." Feng Xin said, "it is wrong for LETV to rely on its own strategy in the early stage, and the content must be widely accepted."

< Strong> comprehensive headlines today < /p > At present, the business of storm is divided into three lines: platform line is storm video, storm TV and storm magic mirror; content line is storm film and storm sports; Other business modules include finance, advertising, o2o, e-commerce, games, shows, etc

In Feng Xin's view, platform is the foundation and survival of storm, while content and business modules are relatively less urgent

The new strategy of storm also continues the previous style of "not burning money" - in 2017, storm business will fully embrace information fluidization. In other words, after the storm sports "headlines today", the storm TV, storm magic mirror and storm video and audio platforms under the storm will be comprehensively revised in the form of information flow

Last June, storm sports was officially established. At the beginning of the launch, Feng Xin emphasized the positioning of storm Sports: providing personalized content that meets user preferences through data analysis capabilities. Previously, Feng Xin disclosed his interest in today's headlines several times in public: "I have studied today's headlines for more than oneortwo years."

He highly affirmed the efficiency mode of today's headlines and agreed with the strategy of today's headlines. Taking storm sports as an example, its difference from Suning and LETV sports lies in the idea of burning money to get copyright

Feng Xin told reporters that during the match between Real Madrid and Barcelona last year, Fengfeng made a statistical analysis. "It's amazing. The download of pptv on the day of the game was 5-7 times that of usual, but the next morning we found that the people who watched the game information were 3-5 times that of the people who watched the live broadcast." Feng Xin believes that although the scarcity of sports copyright is important, the linear relationship between copyright and customer retention is not as good as information. Short video is cheaper, more important and more cost-effective

At the beginning of this month, storm sports officially announced that it had signed a contract with Sports Olympic power to obtain the rights of weekly live video broadcast of the 2017 season China Football Association Super League and the rights of full court short video and highlights on demand. Another company that has obtained the copyright of medium and ultra short video is today's headlines

editor: Nancy