Following iQiyi, Tencent Video VIP members have also started to increase prices, ranging from 17% to 50%. The price of members for consecutive years has risen from 178 yuan to 218 yuan. The price increase of video website members has once again aroused the resentment of many users. Why do video websites increase prices when they want to increase prices? Why do platforms start to increase prices when the number of users increases?
CNNIC’s report shows that by the end of 2020, the number of online video users in China has reached 927 million, and the utilization rate of netizens has reached 93.7%. Considering the user scale of video websites and the length of user usage, the price increase of video website members will have a greater impact on users. Just as they care about the price of firewood, rice, oil, salt, sauce and vinegar tea, users are equally sensitive to the membership prices of video sites that they may use almost every day. The increase in user-end costs will naturally arouse people’s disgust. In addition to the “unhappy” on the user side, we can look at the price increase of video website members from several aspects. First of all, the background of the price increase of video sites . Gong Yu, CEO of iQiyi, mentioned in the 2020 Q2 quarterly financial report meeting that the current gold membership price of iQiyi is actually the price set 9 years ago, but due to market competition, it has not changed in 9 years. . Compared to providing users with rich, high-quality content, this price is too low. The previous profitability of Internet companies was mainly concentrated in e-commerce, games, and advertising. In fact, these three do not directly charge users. Therefore, users are not sensitive to price issues in the Internet industry. It was not until 2015 that the user payment model became popular in the Internet industry. On the one hand, the Internet industry has begun to push users to pay, iQiyi held a VIP membership strategy conference, and its monthly paid VIP membership has just exceeded 5 million. On the other hand, the Internet industry has begun to crack down on piracy. The content industry, including online video, online music, and online literature, has begun to crack down on the piracy industry chain. The cracking down on piracy has paved the way for video sites to pay. It should be noted that the user payment model is not unique to video sites. For knowledge payment, music, novels, etc., more and more Internet products are beginning to adopt the user payment model. . IQiyi’s 2018 Q3 quarterly financial report shows that the total revenue for the quarter was 6.9 billion yuan, of which membership service revenue was 2.9 billion yuan, and online advertising service revenue was 2.4 billion yuan. The video industry has reached a new milestone, with membership revenue exceeding advertising for the first time. Despite this, the video industry is still getting rid of the problem of loss. When membership becomes a new profit point, it is an inevitable trend to increase single-user pay income. In other words, price increases are inevitable, but sooner or later. The international streaming media giant Netflix announced a price increase at the end of October 2020, and the prices of the US standard and premium subscription packages have been increased to US$13.99 (original price of US$12.99) and US$17.99 (original price of US$15) per month. Before this price increase, Netflix also raised prices in January 2019. The previous standard and premium subscription packages were priced at $11 and $14, respectively. Disney’s streaming service Disney+ also increased its prices in 2021. It is reported that starting from March 36, 2021, the subscription price of Disney+ in the United States will rise from US$6.99/month to US$7.99/month, and the annual subscription price will also increase. It rose by $10 to $79.99. In July 2020, the monthly subscription price of the TV streaming service YouTube TV was raised by 30% to $64.99 per month. Judging from the situation of Netflix, Disney+, and YouTube TV, price increases have been the consensus of the video industry, but in the domestic market, it is limited by the competitive relationship of iQiyi, Tencent Video, Youku, Mango TV, Sohu Video, etc., video websites Be much more cautious about member price increases. With the background of not increasing prices in the past 9 years and the fact that international streaming media giants have increased prices, iQiyi and Tencent Video have finally taken this step. Second, the impact of member price increases on the video website industry . According to iQiyi’s 2020 Q4 quarterly financial report, as of December 31, 2020, iQiyi’s total number of subscribers was 101.7 million, excluding the number of trial members was 100.7 million. Tencent’s 2020 Q4 quarterly financial report shows that the number of paid video service members reached 123 million. Although the number of member users of iQiyi and Tencent Video has exceeded 100 million, the entire video industry is still at a loss. There is no doubt that price increases can improve the revenue level of video sites. As to whether video sites can be profitable, it depends on the specific effects of the market after the price increase. In fact, the benefits brought by the price increase of video members do not stop at the video website. Video distribution is only one of the roles of video websites. In recent years, iQiyi, Tencent Video, and Youku have gradually penetrated the upstream of the industry chain, including setting up their own studios to produce variety shows, TV series, and investing in film-related companies. In addition, , They also cooperate with content creators to share. IQIYI’s “Hidden Corner”, “River God”, “Wonderful Flower Talk”, “China Has Hip Hop”, Tencent Video’s “Creation 101”, “Nuqing Xiangxi”, “Chen Qingling” and other self-made content, all Gained huge traffic and good user reputation. According to data released by iQiyi, in 2020, iQiyi will launch 80 account-sharing dramas. Among them, the costumed sweet pet drama “Young Master and Slow Travel” has an account-sharing amount of more than 75 million yuan, and the return on investment of “The Murder Case” exceeds 200%. . According to data from Tencent Video, as of November 30, 2020, the cumulative amount of Tencent Video’s TOP10 accounts for 2020 is 275 million yuan. Member price increases will stimulate video websites to improve their performance. The chain reaction brought about by this is that video websites will have more confidence in the investment in the film and television industry chain, which will promote the benefits of upstream companies in the entire film and television industry chain. With the increase of capital investment in the entire industry chain, more high-quality works may be born. Looking at it the other way around, When users pay a higher membership price for a video site, they definitely hope that the video site can produce more high-quality works After all, the VIP membership price is more expensive than before. If there is still a lot of spam content on the App, or if there is no explosive content for a long time, users will naturally switch to other platforms. At present, the domestic video industry is not only one choice. . The price increase will also indirectly stimulate the emergence of more high-quality content on the platform. Of course, the increase in member prices of video sites will lead to the problem of member churn rate, but in the long run, the user churn rate will rise back with the passage of time and the expansion of the user scale. Users are driven by content. Once the platform is born with more topical content such as “The Hidden Corner”, “Wonderful Flowers”, and “China Has Hip Hop”, a large number of users will be attracted by the content again. At present, pirated film and television content will be exhausted. The target of the crackdown, and it takes a lot of effort to find pirated content. The new generation of netizens obviously pay more attention to the quality of service than the payment itself. Therefore, although the price of video members increases, they are not willing to spend time looking for pirated content. In addition, free content needs to accept super-long title ads. If it is a TV series with dozens of episodes, more people are obviously willing to spend money instead of waiting for ads. There are also very few film sources for free users. This is also the case in the digital music industry. According to Guo Jing’s observations in the Internet circle, there are fewer and fewer music content that free users can listen to on QQ Music, Kuwo Music, and NetEase Cloud Music. , And the music content that can be downloaded is even less. The differentiation of content resources will also indirectly cause users to pay. Price increases are likely to become the mainstream of the Internet content industry in the future. Video, music, online literature, knowledge services, etc. will usher in a wave of price increases, and the Internet has completely resolved from the free era. Behind the price increase, what users need to see is not the price increase itself, but whether the price increase can bring about an improvement in quality. The gradual disappearance of piracy and the stimulation of price increases on the industry chain will allow content producers to see the dawn of the future. Look at price increases in the video industry rationally, rather than being linked to cutting leeks at every turn.
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