Long and short videos in 2023

In the past year, short dramas have become the new generation of "electronic pickles". Under this trend, how should long video platforms develop and how should long and short videos cooperate? This article will analyze it, and you can take a look if you need it.

In the past year, all walks of life have ushered in a post-epidemic recovery. The domestic movie box office "recovered" the 50 billion mark after three years. The long and short video platforms have been producing hits from the beginning of the year to the end of the year. The smoke-filled "long and short dispute" seems to have become a thing of the past, and each platform is finding its own way to survive.

After external threats subsided and internal "cost reduction and efficiency improvement", iQiyi, Youku, Tencent Video and Mango TV are actively exploring more themes and types in addition to sticking to the basic audience base, trying to attract a more diverse audience group. The way out of the "zero-sum game" dilemma is to work together to push up the ceiling of user scale, rather than fighting in a small corner. The competitive balance between short video platforms is being broken by the accelerated commercialization of video accounts. While Douyin, Weibo, and Kuaishou are all working hard to build a "walled garden", the efficiency of traffic utilization determines the area and boundaries of the three "business empires" .

In 2023, short dramas have become the new generation of "electronic pickles", breaking down the barriers between long and short videos . Although short video platforms have taken the lead in this round, under the general trend of "short drama refinement" and "short drama branding", long video platforms still have great opportunities, and "long and short cooperation" is expected to enter the "second half" of the short drama era.

1. How effective is long video in reducing costs and increasing efficiency?

If the keyword for the long video industry in 2021 is "long-short competition", and the keyword for 2022 is "cost reduction and efficiency improvement", 2023 will be the year to test the results of "long-short cooperation" to reduce costs and increase efficiency" , and each platform has also handed in its own answer sheet. Compared with the close fighting in the past, last year each company was finding its own differentiated foothold, and the platform characteristics became more distinct. In addition to the showdown in the costume drama arena, they began to explore new content possibilities . Although it may not be able to pry open the market structure in the short term, it is subtly affecting the audience's cognition, thus bringing a new look to the industry.

The ratings of "The Rush" soared, which helped iQiyi open higher at the beginning of the year. One drama attracted 17 million new members, once again raising the upper limit of long-form video membership. Total revenue and membership service revenue also set historical records. However, the driving effect of the "phenomenal hit" came and went quickly. In the second and third quarters, iQiyi's membership scale fell back to a level slightly higher than the same period in 2022, and it still maintained a moderate growth after three price increases in three years.

In 2023, the number of "over 10,000 dramas" on iQiyi was the same as in 2022, also reaching 5, proving the stable output capacity of "film and television industrialization". Among the 23 dramas with a popularity of 8,000+, only "One Thought Guanshan" and "Imperfect Victim" are copyrighted dramas, and the rest are self-produced dramas. The "steady and rising" proportion of self-produced dramas can not only enhance the certainty of content and the controllability of quality, but also help to reduce costs and increase efficiency to the end. In the third quarter of 2021, iQiyi's content cost was as high as 5.3 billion yuan, and in the third quarter of 2023 it had dropped to 4.2 billion yuan, a decrease of 20.7%.

At the "China TV Drama Development Forum" of the Shanghai TV Festival in June, iQiyi's Chief Content Officer Wang Xiaohui said, "In the most difficult times, it was the TV series that saved the industry and saved iQiyi." In comparison, variety shows seem to be slightly overshadowed.

However, although there is no nationwide hit like "Kuang Biao", the role of variety shows in capturing and leading trends and providing emotions and companionship value to the audience cannot be underestimated, which is crucial to improving the stickiness of platform users . Both "China's Rap Peak Showdown 2023" and "Summer of the Band 3" have helped iQiyi consolidate its position in popular culture, while "Growing the Land", a "variety show dark horse", has demonstrated a different way of "meal replacement" for talent shows.

In 2022, our diagnosis of Tencent Video was that it "failed to get rid of its 'ancient idol addiction', and the tried-and-tested 'IP+traffic star' configuration also failed repeatedly". In 2023, Tencent Video made progress in getting rid of its "ancient idol addiction". From "The Three-Body Problem" and "The Long Season" to "Three-Point Wild" and "Legend of the Magpie Sword Gate", it has achieved breakthroughs in suspense, science fiction, comedy and other tracks, gradually breaking its stereotype in the minds of the audience. As the Douban "Ratings Research Center" team said, "Except for "Longing", Tencent's big dramas this year have not been able to stand up, but several dramas below the S level have performed well. "

Although the “theaterization” came late, X Theater still made us shine. However, after the high-profile opening of “The Long Season”, the subsequent works failed to further polish this brand. The first series of the “Firefly Unit” focusing on women’s issues, “Hometown, How Are You?”, like the “third series” of X Theater, “Under the Bustling City”, fell into the dilemma of “good reviews but not box office success”. It seems that for Tencent Video, it is not a matter of one day or one night to reverse the impression of the platform and attract “non-ancient idol audiences”. Whether it can gain a foothold in new fields such as science fiction, comedy, and suspense also depends on whether it can continue to produce high-quality works in the future.

The reason why Tencent Video's membership scale can achieve "three consecutive increases" in 2023 is that the animation sector is the biggest behind-the-scenes contributor. In last year's new member acquisition list, 6 animation works occupied the list, and the annual series of "Douluo Dalu" and "Battle Through the Heavens" have cultivated a large number of annual members who automatically renew their memberships. The platform stickiness is far from comparable to the popular dramas in a single month, which has created a "basic plate" for Tencent Video that is difficult to shake in a short period of time, and is jokingly called "the 'stabilizing force' of the goose" . iQiyi and Youku are also catching up in the animation track, trying to avoid homogeneous male-band IPs and focus on differentiated content strategies.

At the end of the year, the popularity of "News Queen" put the spotlight back on Youku, and the 10 years of independent cultivation in the Hong Kong drama market finally reaped the rewards. In the 2023 Yunhe Data TV series "Effective Playback Market Share" TOP 20 list, Youku's exclusive dramas have four on the list , the same as Tencent Video, and have achieved multiple blossoming in themes such as fairy tales, comic adaptations, suspense, and modern idols. This achievement was achieved when the monthly active users lagged behind iQiyi and Tencent Video, which is enough to prove the high "hit rate" of Youku.

Especially in the field of live-action comic adaptations, Youku, which has two hit dramas "The Young Man" and "Under the Stranger" in 2023, has seized the initiative, leading this genre to achieve production upgrades and audience expansion, and explored a replicable successful methodology .

In the top 10 of "effective broadcast market share of feature films" in 2023 by Yunhe Data Variety Show, Mango TV's exclusive drama variety shows occupy 4 seats, which shows that its leading position in the variety show track has not diminished. However, just like in 2022, Mango TV still has to rely on the old "variety show N generation" to support the scene, and the problem of lack of innovation has become more and more prominent .

2. What does the “internal circulation” of short videos depend on?

At the end of last year, news from the three major short video platforms in China revealed their respective development trends under the competitive balance - ByteDance strategically withdrew from the game and VR businesses, behind which was the ruthless consideration of "ROI first" in traffic allocation; Video Account revealed that the total e-commerce transaction volume (GMV) in 2023 will exceed 100 billion yuan, showing the outside world the unlimited potential for commercialization; Kuaishou announced a new round of organizational structure adjustments to safeguard the continued advancement of its "internal circulation" strategy.

If we say that Video Account has not had a significant impact on the status of Douyin and Kuaishou since its launch, and the three companies have occupied their respective ecological niches, then as the commercialization of Video Account accelerates and it builds its own "internal circulation system" in business lines such as e-commerce and local life, it is destined to come into direct conflict with Douyin and Kuaishou, and the efficiency of traffic utilization will become the "decisive factor" that determines the commercialization prospects of the three companies .

In addition to the overall contraction of its gaming and VR businesses, ByteDance has also temporarily slowed down the expansion of its food delivery business, selecting core cities as the MVP (minimum viable product) for verification. Behind the strategic shift is still the "red line" of traffic efficiency. A survey by China Merchants Securities showed that although some stores that have launched Douyin have reached tens of millions of exposures, the transaction volume is less than 100, and the transaction volume/exposure volume is less than 0.01%. Even if the route of high average order value is taken, it still means a serious waste of traffic.

In fact, it is precisely by relying on the meticulousness of traffic efficiency that ByteDance has the opportunity to surpass Tencent and close in on Meta in terms of revenue in 2023, which is mainly driven by information flow advertising and e-commerce business . According to data from Great Wall Securities, Douyin's advertising loading rate in 2022 was close to 15%, which is close to reaching the ceiling that affects user experience, which means that the focus of Douyin's future commercialization will be mainly on e-commerce business.

According to LatePost, from January to October this year, the GMV of Douyin's e-commerce content market (short videos, live broadcasts) has exceeded 130 million yuan, approaching the ceiling calculated by the company team (2-3 trillion yuan per year) . In order to reduce the pressure on the loading rate of content e-commerce, Douyin has vigorously developed shelf e-commerce since 2021, guiding users to actively search and browse on the site. At present, the shelf market has contributed 30% of Douyin's e-commerce GMV, but the penetration rate growth rate has begun to slow down.

As the content traffic dividend gradually reaches its peak, Douyin will begin to wade into the deep waters of traditional e-commerce's "low-price and good products", thus meeting Pinduoduo head- on. When Douyin becomes the biggest fish in the short video e-commerce pond, in addition to working hard to expand the area of ​​the pond (such as the recently tested "worth watching" function), it can only swim to other ponds and fight hard.

Compared with Douyin, video accounts with an ad loading rate of less than 3% do not have to worry about the ceiling problem . Tencent's financial report shows that the video account playback volume increased by more than 50% year-on-year in the third quarter, and it is still in a stage of rapid growth. Not only that, more and more WeChat users are actively opening video accounts, switching from fragmented viewing to immersive consumption. The growth hacker "2023 Video Account New Volume Research Report" shows that 42.2% of the video account DAU in December 2022 came from the discovery page, and this proportion should be further increased in 2023 .

As the distribution ratio of social and algorithms begins to tilt towards the latter, video accounts are also shifting from the "private domain era" to the "public domain era". Not only are the authorities encouraging businesses to direct private domains to the public domain, but more and more businesses are relying purely on public domain traffic to increase their volume without any private domain accumulation. This puts higher demands on the algorithm distribution efficiency and ROI conversion rate of video accounts. Creating a commercial internal cycle will be the only way forward .

Tencent's third-quarter financial report also specifically mentioned that "pan-circulation advertising revenue (advertising revenue linked to WeChat mini-programs, video accounts, public accounts, and corporate WeChat landing pages) increased by 30% year-on-year and contributed more than half of WeChat's advertising revenue."

However, if WeChat wants to make a breakthrough in the internal circulation of e-commerce, it may need to bid farewell to the past strategy of driving business growth through product mechanisms, and take the initiative to undertake the "dirty and tiring work" that it has never done before, and work hard in the fulfillment links such as supply, logistics, and after-sales to ensure that the products and services are rich and accurate enough. Only in this way can the video account ads not be "small games, dental fillings, and selling elderly shoes every day. Once the loading rate is increased, the viewing time will drop immediately."

As the only listed short video platform in China, Kuaishou's stock price fell by more than 20% in 2023. Although it has gotten rid of its addiction to live streaming and its advertising revenue accounted for 52.6% in the third quarter, it urgently needs to prove its future potential to investors after its daily active data was surpassed by Video Account and ranked third in the industry.

The good news is that in the face of the double-sided attack from Douyin and Video Account, Kuaishou still firmly maintained its basic user base last year and formed an efficient internal business cycle around its user base. Currently, the proportion of internal cycle advertising has exceeded 60%.

The recent round of organizational restructuring is to strengthen the synergy between e-commerce and advertising, thereby further improving the efficiency of the "internal circulation". After all, Pinduoduo's rapid growth last year shows that the consumption potential of "old irons" in the sinking market needs to be further explored. If Kuaishou can become their main consumption base in the future, it may be able to replicate Pinduoduo's miracle.

3. Short dramas, Douyin and Kuaishou are leading the way, while iQiyi, Youku, Tencent Video and Mango TV still have a chance

The keyword we selected for the entertainment industry in 2022 is "electronic pickled mustard", which highlights the emotional value of "collective carnival" and "remote companionship" that are difficult to replace in dramas and variety shows in the era of short videos.

In 2023, the hottest keyword in the entertainment industry is short drama, which has replaced variety shows and become the latest generation of "electronic pickles".

If the last wave of short dramas was a joint exploration of long and short video platforms, then the outbreak of the short drama market in 2023 will be mainly dominated by short video platforms. The self-made route of long video platforms is difficult to form a scale effect, and the "stormy advance" under the traffic baton of short video platforms has suddenly made short dramas a new generation of national entertainment. In 2022, the number of domestic micro-short dramas filed was close to 2,800, a year-on-year increase of 600%. In November 2023, the number of micro-short dramas filed exceeded 300 in a single month. In the face of the good news that short video platforms often "recharge over 100 million", and in the face of the industry carnival of Hengdian becoming a "vertical store", long video platforms seem a little lonely.

However, the short drama industry, which has been growing wildly and full of chaos, has already been hit hard by the regulatory authorities. The entry of "regular forces" is squeezing out the profit-seeking "grassroots teams" from the market, and high-quality production is becoming a consensus among platforms, practitioners, and audiences. High-quality short dramas will surely replace those homogeneous, routine, and low-quality content in the future and become the mainstream of the market. This has already happened in the online movie industry. In the field of high-quality short dramas, long and short video platforms have already been working hard for a long time and are expected to compete with each other in the future.

Not only that, the consumption of short dramas is also changing from "passive choice" based on algorithm recommendations to "active choice" based on platforms and brands. Audiences are no longer accepting all comers, but are starting to select carefully . Based on this industry trend, long video platforms are expected to "turn disadvantages into advantages."

Although long series are still the main battlefield of iQiyi, Youku, Tencent Video and Mango TV, short series are expected to become the main force for attracting new users to long video platforms in the future, attracting more users from the sinking market, thus breaking the ceiling that has been pressing on the industry for many years.

In the first three quarters of 2023, Tencent Video released 154 new short dramas, taking the lead among long video platforms and occupying 8 seats in the top 10 annual short drama dominance list of Yunhe. In April, the short drama "Provoke" even entered the top 10 weekly list of new users on Tencent Video, which can be regarded as a positive signal for the industry. Starting in 2022, iQiyi and Youku also began to "re-energize" the short drama track, and successively launched a number of works with remarkable market performance.

Although Tencent Video has launched the "Shifen Theater" focusing on short dramas and has begun to try brand-based operations, iQiyi, Youku, Tencent Video and Mango TV have not yet formed a distinct brand image in the field of short dramas, nor have they formed sufficient differentiation from "Mini Program Short Dramas". In the future, on the basis of sophisticated production, long video platforms should fully mobilize their advantages in IP, production, technology and other aspects, and take the initiative to carry the banner of "short drama boutique", "short drama IP", and "long and short drama linkage". Of course, long video platforms also need to reconcile the conflicts between long and short dramas in the business model, such as the membership model and "single drama payment" can be parallel.

In 2023, short video platforms have become the "main venue" for the explosion of the short drama industry because they have established an industrial ecosystem that runs through all aspects of production, trading, and distribution, and have run a "light subscription" business model that is very different from long videos . Behind the competition between Douyin, Kuaishou, and Weibo is the PK between the creator ecosystems, and film and television companies and MCN organizations have become the objects of their scramble to win over, after all, they are the main force in the creation of high-quality short dramas.

Since 2020, Kuaishou has launched a series of content support plans, including the "Photosynthesis Plan", "Star Plan" and "Drama Star Plan". Although Douyin started later, it has also cooperated with ten leading film and television brands, including Changxin Media, Lemon Studios, Noon Sunshine, Huace Film and Television, and Perfect World. The brand effect, audience maturity and commercialization capabilities of the platform determine the return on investment of high-quality short dramas, and also determine the cooperation choices of professional creators .

On December 14, Mango TV and Douyin announced that they would jointly develop short dramas, and subsequently promote in-depth cooperation in secondary creative videos, brand marketing and other aspects. This means that "long-short cooperation" may also continue to advance in the field of short dramas, and the evolution of long and short video platforms can also go hand in hand . In 2024, we hope to hear more news about platform cooperation. After all, the barriers between long and short videos are being broken, and there is no need to build up barriers between platforms.

Author: Zhang Yuan; Editor: Mei Qi

Source: Public Account: Cultural and Entertainment Value Officer (ID: wenyujiazhiguan), value deconstructor of cultural entertainment, new consumption, and commercial technology.