Long video platform: Everyone wants to become a "hit-making machine"

In the competitive landscape of long video platforms, creating "explosive" content has become the key for various platforms to compete for user attention and willingness to pay. As consumers' demand for high-quality content grows, platforms such as Tencent Video, Youku, iQiyi and Mango TV are improving content quality and market competitiveness through strategies such as self-produced dramas, variety show innovation and business collaboration. This new game with "good content" as the core not only tests the platform's content production capabilities, but also affects its business model and profit prospects.

"When I get home from get off work tonight, I'm going to watch Youku's updated drama "Border Water Memories", then I'm going to catch up on IQiyi's "Nine Prosecutors", and Tencent Video's new talk show..." For Chloe, nothing is more relaxing than watching a drama when she gets home from get off work.

"In order to catch up with these dramas, I recently subscribed to Youku, iQiyi, and Tencent Video," said Chloe.

Compared with the past when video membership mainly relied on "borrowing", the public's "willingness to spend money" on long video platforms has increased significantly. For example, in the first half of this year, Tencent Video achieved double-digit growth in membership revenue for two consecutive quarters thanks to the strong launch of four hit dramas, including "Flowers", "Joy of Life 2", "The Legend of Phoenix" and "The Story of Rose".

The increase in consumers' willingness to spend money is due, on the one hand, to the market's long-term education on the "paying for content" mentality, and users' increasing awareness of payment; on the other hand, it is the "explosive high-quality content" that platforms continue to produce, which drives users to gradually form payment habits.

The long-video "ecological" competition that used to be a "sword-fighting" competition that relied on talent shows, IP dramas, and popular variety shows to compete for traffic is now evolving into a content competition in which each company "competes in self-made internal skills" and "competes in form innovation."

01 While others are competing for traffic, long video platforms are competing for time

"To be honest, if the dramas and variety shows on several platforms didn't happen to suit my interests, I would have watched the selected clips on the short video platform. It's efficient and fast, and most importantly, it saves money," said Chloe.

Many years ago, short video platforms had not yet emerged, and a "big and comprehensive" video platform was almost the "ultimate goal" of every long video platform.

In 2020, Tencent Video proposed the "Rainforest Ecosystem", one of the purposes of which is to allow PGC (long video), PUGC (medium video), and UGC (short video) to circulate within the site. At that time, iQiyi was also very "ambitious". In addition to video content, iQiyi also laid out multi-modal businesses such as online literature, comics, games, and VR. iQiyi CEO Gong Yu also mentioned the need to build an ecosystem from "apple tree" to "apple orchard"...

But now, with the development of the times, people's entertainment methods are becoming more and more diverse, and new entertainment needs are emerging in an endless stream. In terms of the allocation of leisure time, consumers can only leave a small amount for long video platforms. At present, how to compete for users' "limited entertainment time" is a challenge that long video platforms need to face together.

So, how can we make users willing to spend money and time on long video platforms? The answer is not complicated, that is high-quality "good content".

In the past, long video platforms were highly dependent on purchasing content. The formula of "big IP + big traffic" made various platforms compete for "bidding", which pushed up the salaries of actors, IP copyright fees, directors and screenwriters, etc. Therefore, the cost of content is very high, and the effect of content playback is difficult to accurately predict. In an era when entertainment methods are relatively limited, TV stations and long video platforms that have no shortage of audiences can still maintain "operation".

However, with the rise of online games and short video platforms, consumers have more and more choices for entertainment on the Internet, and long video platforms that rely on advertising and membership income have inevitably fallen into a "growth dilemma." Under the situation of "too many people and too little porridge", the trial-and-error strategy of blindly "burning money" to pile up content is difficult to maintain the healthy operation of the platform.

Therefore, long video platforms have also embarked on a path of "reducing costs and increasing efficiency." Layoffs, reduction of non-core businesses, membership price increases, and production of self-produced dramas to reduce content costs. Although purchasing big IPs is still indispensable, today's standards and requirements are no longer the same.

After the whole set of combined punches, although the number of new dramas in 2023 decreased by 16% compared with 2021, the effect is still obvious. iQiyi and Tencent Video achieved full-year profits respectively, and Youku's losses further narrowed. The "losses in exchange for market" of long video platforms has become a thing of the past.

At the same time, the "high-quality" platform-made content has undoubtedly been recognized by the audience. For example, Youku's "Border Water Past" recently scored 8.1 on Douban, and the latest score has risen to 8.2, becoming the highest-scoring domestic suspense drama on Douban this year; IQIYI's "My Altay" also became popular in the first half of this year with its high-quality reputation, and even promoted local cultural tourism; Tencent's "The Long Season" and "Flower" also won both word-of-mouth and box office success.

"Where there is traffic, there is the market." When applied to long video platforms, this sentence means "good content is traffic, and there is a market."

02 Youku, iQiyi, Tencent Video and Mango TV: A new game has begun

The trump card of high-quality content has been found, but how to play it? How to play it? In the game of "Youku, iQiyi, Tencent Video and Mango TV", the answer seems to be clear.

First is Tencent Video. As a large group with multiple businesses, the synergy between Tencent’s businesses has undoubtedly been fully demonstrated in Tencent Video: the upstream and downstream linkage of “China Literature Group-New Classics Media-Tencent Video” and the three-horse race have provided sufficient ammunition for the continuous output of high-quality content and the creation of more certain hit content for Tencent Video.

Its recently released financial report also specifically mentioned that "in the first half of 2024, among the three TV series with the highest ratings on China's online video platforms, the top two were produced by New Classics Media and broadcast by Tencent Video, and all three were adapted from novel IPs of China Literature Group."

From the hit drama "Fang Hua" at the beginning of the year to the three consecutive hit dramas in Q2: "The Legend of Phoenix", "Joy of Life 2" and "The Story of Rose", they have made great contributions to the two main sources of revenue for long-form videos, namely "membership income" and "advertising income". Tencent's financial report shows that in the first half of this year, Tencent Video launched a number of popular TV series, driving the number of paid long-form video members to increase by 13% year-on-year to 117 million, and advertising revenue in the second quarter increased by 30% year-on-year.

Youku, which used to perform relatively poorly among the three major platforms of Youku, iQiyi and Tencent Video, has been on a strong start in the first half of this year by adopting strategies such as small-scale wins with big risks and meticulous development, becoming a dark horse in the industry.

For example, this year Youku's "White Night Theater" has produced three hits in a row. "Pale Fire" received a high score of 7.6 on Douban. "New Life" and "Waterside Past" broke through the usual narrative framework and rhythm of the drama industry and won both box office and reputation after broadcast.

In terms of costume dramas, Youku's "Flower Order", "Xi Hua Zhi" and "Mo Yu Yun Jian" also had three hits in the first half of the year. Among them, "Mo Yu Yun Jian" has accumulated more than 2.3 billion views, and the average number of views per episode is close to "Celebrating Yu Nian Season 2".

Mango TV continues to leverage its competitive advantage in variety shows, holding the only hit in the variety show market this year, "Singer 2024". With sufficient experience in variety show production, investment promotion, and even ecosystem building, serial development and various "extra editions" and "special business" derivative programs have also made Mango members more sticky and willing to pay.

The financial report shows that in the first half of this year, Mango Super Media’s membership business revenue was 2.486 billion yuan, a year-on-year increase of 26.8%.

Looking at the report card for the first half of the year, unlike the "hit" report card of Youku, Tencent Video and Mango TV, iQiyi seems to have been a little mute in presenting its hits, no longer having the crushing pressure of the "drama kings" such as "Kuang Biu", "Chang Feng Du" and "Lotus Tower" in the past.

In the first half of the year, iQiyi had only one drama with a popularity of over 10,000, namely "The Wind Chaser" which was launched in the first quarter. Even its flagship "Misty Theater" has not received good reviews this year. Dramas including "Misplaced", "The Boy Who Can't See My Shadow" and "The Unspeakable" have not reproduced the myth of the past hit dramas of the Misty Theater, and lost to Youku's "White Night Theater" in the "suspense brand" war.

According to iQiyi's second quarter report, iQiyi's membership revenue and advertising revenue in 2024Q2 decreased by 9% and 2% year-on-year.

iQiyi's "missing" hit may be related to the "dispersion" of the platform's content focus. In 2024, iQiyi still wants to have a "broad and large" content layout.

In April this year, iQiyi's Chief Content Officer Wang Xiaohui mentioned at the iQiyi World Conference that "future hits lie in realism." At the same time, balancing the fan group structure is also what iQiyi has been talking about and doing.

Therefore, in addition to exploring realistic themes, iQIYI has also launched "Micro-Dust Theater" and "Everyone Theater", focusing on the stories of ordinary people, and presenting artistic and commercial literary works through short series and stylized image exploration. Among them, "My Altay" does embody avant-garde and texture, but the theme and content also make it difficult for this drama to become a hit among a wide audience.

Compared with the relatively clear strategic direction of Youku, Tencent Video and Mango TV, iQiyi's current development path does not seem to be clear enough. In 2024, long video platforms will undoubtedly start a new game based on "good content".

03 Long video platforms are in urgent need of "explosive products"

In fact, the deep immersion brought by high-quality long-form video content is difficult to achieve with short-form video content. Therefore, long-form video will still be one of the important ways for the public to "replenish their spirit".

Today, Youku, iQiyi, Tencent Video and Mango TV all have their own unique strategic approaches, but if they want to gain a foothold in the hearts of consumers, they still need to continuously produce "explosive products".

Why does it have to be a “hot item”?

Whether it is the commercial derivation of IP value, or consumers upgrading from monthly membership to annual membership, or the overseas release of major dramas, the occurrence of these events must be based on "heat". "Heat" will drive the conversion of traffic. Without "heat", there will be less "topic" and lack of "social added value", and it will be difficult for consumers to continue to pay for platform content.

But "hot products" also mean "uncertainty". In an environment full of uncertainty, the development of commercial things tends to pursue "certainty" because "certainty" means low risk and stable returns. Hot products are anti-certainty and anti-standard, and there is no winning methodology. In other words, it is the product of "right time, right place and right people", and even has a bit of luck.

The audience's aesthetic fatigue is decreasing. If a work of the same type and subject matter is copied after "Knives Out", even if the artistic level can reach the same level, the probability of becoming a hit will be greatly reduced, because it will no longer be fresh to the audience.

In the business world, there is no such thing as a general who always wins. The only difference is that successful people are good at learning from their failures and increasing their chances of winning. Just like the "hit creation" of long video platforms, it is impossible for every content to become a hit, but there are always ways to increase the percentage of hits.

So, how can long video platforms increase the probability of producing “explosive hits”?

From a certain perspective, the operating methods of the short drama and movie markets are worth learning from: first of all, it must be fast. We must know that consumers' aesthetic preferences and the social public opinion environment are changing all the time, and content output is undoubtedly racing against time; secondly, accurate population segmentation. As mentioned above by "Tidal Business Review", major mainstream long videos have gradually found their own characteristics, targeting the target audience, predicting the focus points based on human nature and broadcast time, so that the content itself can have the ability to attract attention; in addition, using technical means to "replay the hot products" and analyze key points and key data from various dimensions is also a possible way to "copy the hot products."

"One reason why I don't subscribe to a long-term membership is that if there are no good dramas to watch, I would feel that the membership fee I paid that month was wasted. But once there is good content, I will renew my membership as soon as possible." Chloe said.

You see, that's how business works.

Author: Camille
Editor: Ray
This article was originally written/authorized by the author of Operation Party [Tidal Business Review], WeChat public account: [Tidal Business Review], and published on Operation Party. Reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.