Short videos in 2023: Video accounts are rising strongly, and Internet celebrities are getting more and more anxious

2023 is an extraordinary year for the technology and Internet industries. This article looks back at the changes in the short video industry in 2023, analyzing the industry development trends from the rise of video accounts, the impact of declining traffic dividends on creators, and the commercialization of short video platforms. Recommended for students who are interested in the short video field.

As the last traffic highland of mobile Internet, short videos will reach their turning point in 2023.

According to a report by Mod Research Institute, by the end of 2023, the number of short video users in China will be about 1.012 billion, accounting for 94.8% of the total number of netizens. Among them, nearly one-third of short video fans are "intensive users", with an average daily usage time of nearly 3 hours per person.

However, after several years of rapid development, the incremental users of short videos are about to run out, which is a fate that no track can escape. Looking back, the growth rate of short video users has fallen to single digits at the end of 2022. Although the statistics for 2023 have not yet been released, the results are not difficult to foresee.

The impact of the slowdown in growth on the industry may be more far-reaching and comprehensive than expected: the battle for traffic between platforms, creators and MCN agencies will become more intense, and even chaos will arise from the chaos; the peak of traffic growth has forced practitioners to face up to the difficulties of commercialization, and it is still unknown how far new models such as payment can go...

The short video industry has been booming this year, but it is also a mixed bag. Led by leading platforms such as Douyin and Kuaishou, a new round of competition is unfolding and is becoming increasingly fierce.

1. The landscape is changing again: Douyin and Kuaishou are facing off, and video accounts are rising

Almost since its birth, the domestic short video industry has been dominated by Douyin and Kuaishou, and this situation has not changed for many years. From the perspective of active users, market share, revenue and other dimensions, Douyin and Kuaishou have firmly occupied the first echelon of the domestic short video industry, and there is not much gap between them.

As of the first half of 2023, Kuaishou's DAU was 673 million, and its daily active users increased by 8.7% year-on-year to 376 million. The cumulative number of mutually connected users exceeded 311 pairs, a year-on-year increase of 50%, which also demonstrated the platform's high user stickiness and community activity. Douyin, which has not yet gone public, has not disclosed user information to the public, but according to research reports from various independent institutions, its MAU still surpasses Kuaishou.

The close combat between the two heroes, Dou and Kuai, was like a tit-for-tat confrontation.

For example, with the rise of general knowledge content, Kuaishou just announced on August 23 that it would upgrade its "New Knowledge Creator" plan to provide traffic and monetization support for high-quality talents. On August 29, Douyin launched a knowledge open course content support plan to recruit high-quality creators and course content from universities across the country.

For example, in the application of AI big model technology, Kuaishou launched "AI Xiaokuai" to provide functions such as short video interaction, text modification and image generation. Douyin has come up with "AI Search", which also provides intelligent question and answer, intelligent retrieval and other services.

Douyin and Kuaishou have been fighting each other for many years, neither of them is willing to give in or submit to the other. Judging from the latest performance data, the two giants have also achieved good results in the past year, and the fight will continue.

In the third quarter of this year, Kuaishou's total revenue reached 27.9 billion yuan, up 20.8% year-on-year; adjusted net profit reached 3.17 billion yuan, far exceeding the market expectation of 2.66 billion yuan, and achieved full-caliber profitability for two consecutive quarters. Advertising revenue, mainly driven by short video business, recorded 14.69 billion yuan, up 26.7% year-on-year, a higher growth rate than live broadcast and e-commerce businesses, and its core position was further strengthened.

ByteDance has not yet announced its financial results for 2023, but reports say its total revenue in the first half of the year reached a staggering $54 billion, exceeding Tencent's revenue in the same period. From the perspective of revenue structure, advertising is still ByteDance's number one cash cow, and Douyin contributes the vast majority of its revenue, with its ability to attract money far surpassing that of its peers.

But the real enemy often rises outside of our field of vision. The "latecomer" of short videos is undoubtedly the video account based on WeChat. Backed by WeChat, the largest traffic pool in the Chinese Internet industry, the video account naturally has no shortage of users. In the past year, the video account has been very strong.

The mid-year development report of video accounts released by Xinbang shows that as of the end of June last year, the number of comments and reposts of video accounts increased by 70.1% and 68.1% year-on-year respectively, the average monthly number of content released by top creators also increased by 55.6%, and the number of creators with more than 10,000 fans more than tripled.

(Picture from New List Research Institute)

In the short term, Video Account cannot challenge the dominant position of Douyin and Kuaishou, but it has shown its potential as a dark horse. Since Ma Huateng called short videos "the hope of the whole audience" in his internal speech, Tencent will definitely invest more resources to support Video Account in the future. In 2023, Tencent will strategically search and cut off many unnecessary marginal businesses. In 2024, it will focus more on growth-oriented core businesses such as Video Account. With great efforts, there may be miracles, and short videos may soon present a new pattern of "three pillars".

In addition to the three giants of Douyin, Kuaishou and Video Account, more and more platforms are using short videos as basic components. For example, Alipay launched a short video portal on its homepage in April last year, and announced the full opening of the UGC creation portal for Life Account in November, encouraging users to publish more short video content; the peak DAU of Pinduoduo's short video business "Duoduo Video" exceeded 150 million at the beginning of last year, close to one-third of Kuaishou; Meituan APP also launched a first-level short video portal in the second half of last year and increased recruitment efforts for related positions. These players are more focused on serving their core businesses by making short videos, and are not in the same competitive dimension as Douyin, Kuaishou and Video Account.

As the followers close in step, the next stage of competition in short videos will be far more fierce than expected.

2. Internet celebrities are anxious: traffic dividends are decreasing, and failures have become the norm?

As mentioned at the beginning of the article, the growth of short video users has slowed down, which is a warning signal for all short video platforms - it means a decline in traffic dividends.

You know, the user overlap rate of several leading short video platforms is already extremely high, and it is not easy to retain users. Once the incremental users are exhausted and it becomes difficult to attract new users, the competition for existing users will become extremely cruel. Statistics from QuestMobile show that only 25% of users use only one short video application, and more than half of users use 2 or 3 applications at the same time. Among them, Douyin and Kuaishou have the highest overlap rate, reaching 65.4%.

In this context, not only are the platforms nervous, but short video creators and MCN agencies are also scrambling for traffic. In order to retain fans and quickly generate revenue, the industry has seen a trend of vicious competition, some creators have taken the wrong path, and the industry has seen false marketing, vulgarity, and even borderline content.

Every year, there are collapses of top short video stars, but in 2023, they seem to happen more frequently, and the time interval from becoming popular to crashing has become shorter.

Douyin's October limited top streamer "Yu Wenliang" set a series of crazy statistics, such as a 1 million followers in 7 days and 3 million followers in a single month. However, he was criticized by fans for holding 10 live broadcasts on the eve of Double 11, and responding to another internet celebrity "Tao Yuanming" saying "live broadcast is to make money" by saying "I said what I think". After the 10 live broadcasts ended, Yu Wenliang lost millions of followers in a few days and was reduced to his original state overnight.

Also collapsing after the live PK were the two top stars "Xiu Cai" and "Yixiao Qingcheng", who had gained countless silver-haired fans born in the 50s and 60s.

Last August, "One Smile Allures the City", who has over 19 million fans on Douyin, and "Xiu Cai", who has over 12 million fans, staged a "confrontation of the century", with a live broadcast PK attracting over 20 million netizens to watch. But shortly after the live broadcast ended, "Xiu Cai"'s account was banned by Douyin officials. The official reason for the ban was ambiguous, but according to the revelations of fans, it was closely related to "Xiu Cai's" behavior of inducing rewards.

The ban on "Xiu Cai" also played a role in deterring others. "A Smile Allures the City" took the initiative to stop updating for two months, and only quietly resumed updating on November 4. "Xiu Cai", "A Smile Allures the City", and "Yu Wenliang" are just the tip of the iceberg. We can add many familiar names to the list of top short video streamers who have failed in the past year.

The platform is solid, the influencers are changing, and the algorithm is like Schrödinger's. No one knows who will remain popular and who will be the next one. But it is not difficult to see that the influencers are really anxious, eager to increase fans, eager to divert traffic, and eager to cash out. It has long been a consensus in the industry that the number of fans of short video influencers lacks gold content. Under the algorithm recommendation mechanism, the platform always controls the distribution of traffic. Although small fame depends on promotion and big fame depends on luck, the luck factor is too illusory after all. Seizing the window of popularity and using the traffic provided by the platform to find ways to cash out is the only choice for most influencers.

When the short video traffic dividend decreases, Internet celebrities can only speed up the pace of monetization, which then breeds various chaos. In the final analysis, this is the inevitable result of the fierce competition for short video traffic. To cure these chaos, we need to rely on strict control by platforms and regulators, and secondly, we need to establish a healthier, more sustainable and longer-term business ecosystem.

3. To accelerate commercialization, what trump cards do short video platforms have?

The short video regulatory policy has to be tightened every once in a while, and a new round of strict control was ushered in at the end of last year. On December 12, the Cyberspace Administration of China announced a one-month special campaign to "clear up and rectify the problems of short video information content orientation", focusing on rectifying three types of problems: the spread of false information, display of inappropriate behavior, and the spread of wrong ideas.

The difference is that in this round of strict policy control, leading platforms such as Douyin, Kuaishou, and Video Account are even more nervous and concerned than regulators. Perhaps the platforms also understand that the chaos of short videos has reached the point where it must be eradicated, and only in this way can they ensure long-term development in the future.

In addition to investing a lot of manpower to clear illegal accounts, the platform's regulatory rules have also been continuously refined, and the creative environment for short video talents has become more standardized. Taking Douyin as an example, in November, it announced a crackdown on improper "big and small accounts" that led to inappropriate trends, prohibiting the organized and batch release of homogeneous and low-quality content. In addition, major platforms have also implemented real-name systems. Kuaishou accounts with more than one million fans and Douyin accounts with more than 500,000 fans are required to display real-name authentication information.

As for the commercialization of short video platforms, it is not a new topic. The revenue-generating channels of several leading platforms are already very clear. E-commerce and local life are the best answers at this stage, and short dramas are a new rising outlet.

The popularity of short dramas soared in the second half of last year, and everything happened quite suddenly. Now all major platforms are rushing to standardize management systems and clear bad accounts, and have not yet entered the stage of refined operation. In contrast, the pillar status of e-commerce and local life has long been verified by time and is now more solid.

Douyin and Kuaishou have both pinned their hopes on e-commerce for commercial growth. Kuaishou CEO Cheng Yixiao said at last year's Kuaishou E-commerce Gravity Conference that e-commerce is the "lifeblood" of Kuaishou's commercialization, and promised to invest 60 billion yuan in traffic to support merchants.

However, for some people who do not have the conditions to sell goods through live streaming, who only know how to create but not how to sell goods, or vertical creators whose conversion rate is too low, the platform's heavy investment in e-commerce business cannot solve their monetization problems. Moreover, there are still many users who prefer content that does not involve selling goods, and many users are not used to or even disgusted with shopping in live streaming rooms.

In view of this, returning to the short video creation scene, the platform also needs to provide creators with some more direct and lower threshold monetization methods - Douyin's trial payment model provides creators with new monetization possibilities. Douyin's payment model was quietly launched without large-scale publicity, obviously trying to test the user's attitude first. The price range of its paid short videos is 1-10 yuan/piece, and the platform charges a technical service fee of 30% of the total amount. At first glance, it seems conscientious, but the user's attitude is quite complicated. It is still difficult to determine whether it can be promoted on a large scale.

Since Chinese users are used to free Internet, content payment has not yet been fully implemented in China. Bilibili has previously tested a paid model for self-made content, but the results were not ideal and it was later abandoned. Even iQiyi, Youku and Tencent Video, which once wanted to rely on paid memberships to solve content problems, now have to strengthen commercial means such as advertising. Because domestic users are still quite cautious about paying for content, their acceptance of the paid model is far less than that of overseas users. As the leader of the short video industry, Douyin dared to take the risk to be the first to try it out. It must be said that it took great courage and brought new monetization possibilities to creators.

In contrast, building a marketing base for film and television and promoting film producers to increase their budgets has been more successful. Taking cinema films as an example, from the Spring Festival movie "Red River" to the summer movie "Gone Girl" and "All or Nothing", to the New Year's Eve movie "Twinkle, Twinkle Star" which set a new pre-sale box office record, all of them regarded short video platforms such as Douyin and Kuaishou as the main marketing platform, put in a lot of materials and consumed a lot of budget.

From exploring content payment to building a marketing front, platforms and creators have reached a consensus: in addition to selling goods, high-quality content is another way to realize monetization.

Short videos are the brightest "wave" in the content wave. Proper use of algorithms and traffic is certainly important, but the core competitiveness is still content. In 2024, we look forward to more truly high-quality content creators and more truly high-quality content emerging on short video platforms. We also expect short video platforms to form a positive cycle in the content ecology and achieve higher-quality growth.

Author: Hernanderz

WeChat public account: Value Research Institute Pro (ID: quanwaicaijing)