The popular dramas you can’t watch, the VIP memberships you can’t buy

The popular dramas you can’t watch, the VIP memberships you can’t buy

Recently, Tencent Video's "high-end version without advertisements" has sparked widespread discussion and doubt. From the initial ad-free membership to the current member-exclusive advertisements, and then to the possible launch of higher-level membership services, the business model of video platforms seems to be constantly challenging consumers' bottom line. This article deeply explores the current status of video platform membership services, consumer dissatisfaction, and the logic behind this business model.

"Does anyone remember that we initially bought video memberships just to block ads?" Recently, Tencent Video proposed or launched the idea of ​​a high-end version without ads, and conducted research on the features or gameplay that users want, need, and suggest to add. In this application form for recruiting product experience officers, it is mentioned that the main selling points of the "high-end version" of Tencent Video are no ads, faster speed, and visual upgrades, but it also requires additional payment, and the specific price has not yet been determined.

This move immediately triggered widespread speculation and complaints from the outside world: "In the beginning, all major platforms only had pre-roll ads, using the ad-free membership rights to attract purchases. Later, as more and more people signed up for membership, I don't know which platform started it, but ads were inserted into member-only content. From VIP to Super VIP to SVIP, you have to pay to watch ads, so now they want to make more money by being ad-free, right?"

In fact, the conflict between long video platforms and paying users has a long history. Recently, a seven-year "old fan" of iQiyi decided to bring the platform to the dock again on the last day of the first-instance appeal period. The dispute stems from "iQiyi's previous changes to restrict the resolution of third-party screen projection, allowing only official clients to be used for unlimited resolution projection", and as a gold VIP member, the user's projection resolution is limited to 480P.

In this regard, some netizens passionately said, "What we see now is that one person won the lawsuit, but the cost of defending his rights is higher than the loss. In reality, how many people like him have the time and energy to pursue accountability?"

But whether it is the widely criticized "there are advertisements after membership" or "changes in membership rights", in essence, they reflect the same problem: although it is consumers who pay for the service experience, the video platform has the final say.

1. You will need to recharge Tencent Video "SSVIP" in the future

"Membership is so expensive now, can't there be a unified membership that can be used on all major platforms? Moreover, I have already paid for membership, but there are so many ads at the beginning and in the middle, which takes up several minutes of the progress bar." "The current broadcast rhythm of dramas is basically four updates a week. I really can't bear to pay for two or three months of membership for a drama, after all, membership is so expensive! The key is that the VIP on the mobile phone is not enough. If you want to watch it on TV, you have to activate another membership service. It's too difficult, my family!"

"What you think of as advance on-demand: On October 4, 2021, iQiyi, Tencent, and Youku announced on the same day that they would officially cancel advance on-demand. In fact, advance on-demand: various gift packages that you can purchase separately to watch the finale in advance, and even the extra episodes have to be paid extra." "Because the platform limits the number of terminal login devices for VIP accounts, there are not enough for families with a slightly larger population, so every family must open a membership separately, right?"...

Judging from the feedback from relevant users, Tencent Video's tentative launch of a "high-end version", coupled with iQiyi's recent involvement in membership rights disputes, has undoubtedly brought out a lot of consumers' "complaints" about long-form video membership services.

Tencent Video tries to launch a "high-end version"

"I now feel that paying the annual fee is a waste." Although Wang Jing is already a loyal paying user of long videos, she is indeed a little overwhelmed by the increasingly expensive membership fees and the privileged services that can only be enjoyed after grading. "Now you have to watch variety shows on Mango TV, and watch dramas on iQiyi, Youku and Tencent Video. If you want to enjoy the big screen effect on TV, you usually have to open an SVIP account. If you are obsessed with a hit drama, you have to pay a direct access fee to the finale on top of the membership fee." Wang Jing told Zinc Scale that because she bought the basic VIP package of the platform, she can only watch dramas and variety shows on her mobile phone or tablet. "It does not support watching the whole family on TV, and even the tricky method of casting the screen is not available. First, there is a delay that will affect the effect, and you have to occupy a mobile phone or tablet to cast... There is no way around it. If you want to watch it, you have to upgrade to SVIP or buy an exclusive membership for the TV channel."

But Wang Jing found that there are many problems here. "Many things you want to watch are scattered across major platforms. For example, if I want to follow "Singer 2024", I have to buy a Mango TV membership. If I want to watch popular dramas like "Longing", I have to buy a membership on the corresponding platform. When you become an annual member of a platform because of promotional prices, it will be painful to watch content on other platforms. Not only is your annual fee burning, but you also have to spend dozens of yuan on a monthly or quarterly subscription for that piece of content on other platforms."

It is also difficult to avoid these repeated payment times through TV membership. Although the resource library of TV VIP can integrate some content from several major long video platforms, it usually does not include popular dramas, such as "Joy of Life 2", which has been broadcast on the platform for more than a month. "This time I held back and had to wait until it was on TV to watch it. I don't want to be a sucker anymore."

2. Paying users are controlled by exclusive content

Tencent Video's "Joy of Life 2" and "The Story of Roses", Youku's "Ink Rain and Clouds", iQiyi's "My Altay", Mango TV's "Singer 2024"... This year, the major long-video platforms have basically had popular works or word-of-mouth works that have exploded. As a platform, of course, we can't miss this sky-breaking wealth, so users have seen a lot of "fancy revenue-generating" operations: for example, when chasing dramas, there is a high probability that advertisements are interspersed in the dramas in all directions, VIP and SVIP are required, the show is about to end and the show is reduced, and advanced on-demand is required; when chasing variety shows, because the live broadcast can't drag the progress bar, it has become normal to listen to a few songs in the advertisements. Even if you are a VIP with the highest rights, you will not miss any advertisements.

Almost every episode of "Singer 2024" has been criticized for having too many advertisements

But as Wang Jing said, "There is no way. If you want to watch these contents, you have to be led by the platform." On the one hand, this is thanks to the exclusive content "moat" that the long video platform has initially established.

Since 2013, the country has begun to focus on video copyright supervision, and long video platforms have also begun to work together to combat piracy, purchasing a large amount of copyrighted content to seize the user market, and have since focused on launching exclusive dramas that the platform either participates in or produces in order to maintain its competitive advantage. Today, these exclusive contents have become the basis for the platform to control users in various senses.

On the other hand, it is also due to the slowdown in the growth of paying users of long videos.

In 2019, long video platforms officially entered the "hundred-million-level" membership era. iQiyi and Tencent Video announced that their membership numbers exceeded 100 million in June and November respectively. However, while the proportion of membership fees in the platform's revenue continued to increase, the growth rate of paying users quickly fell back. For example, iQiyi's subscription membership growth rate in Q1 2019 was 58%, while the year-on-year growth in Q1 2020 was 23%; Tencent Video's membership grew from 43 million to 82 million in just one year, but it took half a year to rise from 82 million to 89 million. In order to maintain its development momentum, long video platforms must find new business growth points.

The earliest attempt was in 2015, when iQiyi took the lead in allowing viewers of "Grave Robbers' Chronicles" to experience the "members' sneak peek" service. According to iQiyi CEO Gong Yu, this paid attempt led to a 100% increase in iQiyi's VIP members week-on-week, and the number of monthly paid VIP members in the month of broadcast reached 5.017 million, a year-on-year growth rate of 765%.

Next up is The Untamed, the first TV series to use advanced on-demand streaming. When it aired in 2019, the cost was 6 yuan per episode, and 30 yuan for all episodes. According to the production team of The Untamed at the celebration banquet, the number of people who paid for on-demand streaming reached 5.2 million, and the total amount of advance payments reached 156 million yuan.

Afterwards, these effective paid services were quickly adopted by the industry on a large scale. It was not until 2021 that the Shanghai Consumer Protection Committee and the China Consumers Association named the advanced on-demand service, pointing out that the "episode-by-episode unlocking" was suspected of bundled sales and violated consumers' right to choose independently. In response, iQiyi, Youku and Tencent Video all announced that they would officially cancel the service.

But the reality is that just over a year later, the three gift packages customized for VIPs of "Dream of Red Mansions" that allow them to watch the finale in advance, the "extra update gift" for the finale of "Yuan Zhi Yu", and the 24 yuan direct access to the finale service of "Mo Yu Yun Jian", these advanced on-demand services that are just a rehash of the old ways have caused the boomerang to hit back, but the ones who are hurt more deeply are not the platforms, but the paying users who have no choice.

3. Shifting revenue pressure to old members

Let’s not talk about value-added services such as advanced on-demand viewing, just from the perspective of “ad-removing”, from the earliest membership just to remove the opening advertisement; to the platform integrating advertisements into video content through various means, resulting in members being unable to completely avoid these patch ads and embedded ads; and in the future perhaps there will be a long video service that is ad-free, but will require an additional fee… Such operations that continuously compress the consumption experience of member users and sell VIP rights at a discount are confusing but very reasonable from the platform’s perspective.

The product placement in "Joy of Life 2" made many viewers dissatisfied

It can be said that as the growth of paid members slows down, long video platforms can only focus on deepening the existing user base. Only by continuously refining services can they make targeted use of every user demand and pursue monetization more comprehensively . In the development history of long videos, monetization anxiety has always been a major constraint that is difficult to avoid. Although after the scale of paid users exceeded 100 million, the two major leading platforms in the long video industry, iQiyi and Tencent Video, have been pulled back from the quagmire of huge losses to a certain extent, as the scale of long video members has reached the ceiling, even the scale of iQiyi and Tencent Video members is still hovering around 100 million (with slight increases and decreases depending on the amount of popular content). Obviously, the bonus period of rapid user growth has passed.

In the era of stock competition, long video platforms have to face new problems: first, content creation is weak, lacking innovation and differentiation, resulting in insufficient content attractiveness; second, user purchasing power is reduced, and consumption willingness is weakened, affecting the profitability of the platform; third, the competitive pressure in the short video track has increased, user attention is distracted, and loyalty has decreased.

A report pointed out that more than 17,000 long-form videos were launched in 2023, and the stock of works on major long-form video platforms reached more than 120,000. Online audio-visual is still an important supply of "entertainment feast" for the public. In the past year, the long-form video industry has been attacked by short dramas. Data shows that the number of key online short dramas launched in 2023 doubled, and the stickiness of short drama users increased rapidly. 40% of users watch them frequently and 30% of users have paid for them.

This is more directly reflected in the financial reports of long video platforms: in the first quarter of this year, iQiyi achieved revenue of 7.9 billion yuan, a year-on-year decrease of 5%. The membership service business, one of its main businesses, had revenue of 4.8 billion yuan, a year-on-year decrease of 13%.

Of course, this financial report also mentioned that iQiyi's monthly average revenue per member (ARM) hit a new high, with a sequential increase for six consecutive quarters. Online advertising service revenue was 1.5 billion yuan, a year-on-year increase of 6%, mainly driven by the growth of performance-based advertising business.

In the first quarter of 2024, iQiyi achieved revenue of 7.9 billion yuan, a year-on-year decrease of 5%.

This also explains why long video platforms are racking their brains to find various ways to raise the payment threshold for individual members. After all, compared to focusing on popular content with too much uncertainty, shifting revenue pressure to member users who have lost the right to choose is undoubtedly a faster option .

Written by: Meng Huiyuan, edited by: Chen Dengxin

WeChat public account: Zinc Scale (ID: znkedu)

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