Video Account’s 1 billion “ambition”: where does the confidence come from?

When it was first launched in 2020, Video Account only supported uploading short videos of less than 1 minute. Later, it launched live broadcast rewards, microphone connection, beauty features and other functions. In just two years, Video Account has established a huge user base with its social attributes. The author of the following article introduces the commercialization link of Video Account. Friends who want to learn more about Video Account, please take a look.

The much-anticipated World Cup finally ended with Argentina's victory. Previously, Douyin spent 1 billion yuan to win the broadcasting rights of the World Cup, which created enough momentum for the platform. In contrast, Video Account unfortunately missed this golden event that could have increased traffic.

However, although Video Account gave up the World Cup, it has never stopped competing with short video platforms such as Douyin and Kuaishou for private domain traffic. This year, Video Account not only launched Video Account Store, but also launched information flow ads, which shows Tencent's ambition to accelerate the commercialization of Video Account. Now, after two years of development, Video Account has already made efforts in many fields.

In the just concluded Double 12 event, Video Account also launched the four-day "Double 12 Quality Life Festival & New Year Goods Festival", and brands such as China Gold and Chow Tai Seng have entered the Video Account live broadcast room. With the expansion of the Video Account market, some brands are trying to find a new profit growth curve through Video Account. Can the Video Account, which is developing rapidly, carry the high hopes of brands and Tencent?

1. Tencent bets on video accounts

Tencent has always been ambitious to create a short video app that can rival Douyin and Kuaishou. To this end, long before the birth of the video account, Tencent had tested and launched more than ten short video apps, including Weishi, Maobing, and MOsheng. However, these apps received mediocre responses, and some have even been removed from the shelves. The monthly active users of the most popular Weishi are less than one-tenth of Douyin. Therefore, the emergence of the video account allowed Tencent to see the "turnaround point."

When it was first launched in 2020, Video Account only supported uploading short videos of less than 1 minute. Later, it launched live broadcast rewards, microphone connection, beauty features and other functions, gradually improving its commercialization links. From a commercial perspective, Video Account, which grew out of WeChat, has a unique advantage in private domain traffic. Moments, public accounts, mini programs, Kankan, Soso, WeChat Pay, corporate WeChat and other channels have established links with Video Account, and multiple channels can help Video Account attract traffic. In just two years, Video Account has established a huge user base with its social attributes.

According to the "2022 China Mobile Internet Half-Year Report" released by Quest Mobile, as of June 2022, the MAU scale of Video Account has reached 813 million, Douyin 680 million, and Kuaishou 390 million, and Video Account has successfully led the entire short video track. However, the flaw of Video Account is that the average daily usage time of users is less than one-third of that of Douyin and Kuaishou. Relevant data shows that the average daily usage time of Douyin is 118 minutes, Kuaishou is 119 minutes, and Video Account is only 35 minutes.

In essence, the short usage time of users is due to the weak appeal of the video account's content ecology to users. The video account was once criticized as "middle-aged Douyin" because of its large amount of general knowledge and information content. In order to enrich the content ecology of the video account, Tencent has gradually increased its content layout for the video account.

Looking back at the content path of the video account, in the early stage, the content creation was mainly driven by public accounts. WeChat has invited top public accounts such as Shidian Reading and Fan Deng Reading to join the video account. These accounts have gradually created a number of popular videos with the output content and the accumulation of fans of the original public accounts, which has also activated the early content ecology of the video account and attracted a large number of content creators to join.

However, as Video Account has always adhered to the "decentralized" development strategy, this has directly led to the lack of transparency in the number of fans and likes of Video Account creators, which has affected the brand's assessment of the commercial value of the creators. In addition, Video Account's content ecology and public domain traffic are not as active as those of Douyin and Kuaishou. These factors have led to Video Account's weaker appeal to content creators than Douyin and Kuaishou, and the number of phenomenal celebrities is relatively small. In terms of content, compared with Douyin and Kuaishou, Video Account's entertainment attributes are weaker, which to a certain extent limits the categories of brand advertising. Video Account urgently needs to explore more diversified content.

In order to provide fresh content to the audience, Video Account is also constantly exploring the field of live broadcasting. At first, Zhang Xiaolong, Zhang Peng, the founder of Geek Park, and Pan Luan, the host of "Random Books", conducted a live interview through Video Account, which was equivalent to directly providing free advertising for Video Account. Later, the Geminid meteor shower live broadcast conducted by photographer Li Zhenglin on Video Account became the first event to sweep the WeChat Moments of Video Account, which also made Tencent see the potential of Video Account in the field of live broadcasting and introduced concerts into Video Account.

At the end of 2021, Westlife's concert live broadcast had 27 million viewers, 170 million video views, and a peak of 1.5 million concurrent online users. Mayday's New Year's Eve concert live broadcast had 14 million viewers, and Mayday's duet with Jay Chou became a hot topic, with 200 million views.

From this point of view, the live broadcast of the video account is more inclined to take the sentimental route, and establish an emotional connection with the audience through nostalgic golden songs, etc., aiming to radiate audiences in multiple circles and strive to achieve full coverage of fans, thus paving the way for the commercialization of later traffic diversion and grass-planting.

Take live concerts as an example. The popularity of live concerts has allowed brands to see business opportunities, and they have used concerts to empower their brands and occupy the minds of users. Lincoln Motors and Backstreet Boys jointly broadcast concerts, and Polar Fox Motors also teamed up with Cui Jian and Luo Dayou to launch two concerts, "Rarely Arrogant" and "Ingenious Return", which not only achieved content out-of-circle, but also promoted the commercialization process.

After the above series of "big moves", Video Account has ushered in "incremental growth". According to Tencent's Q3 financial report, Video Account's advertising business complements Tencent's existing advertising business and has brought incremental advertising revenue to Tencent. Just as Tencent's social network revenue declined, Video Account's live broadcast service revenue also increased. The counter-trend growth of Video Account has given Tencent a glimpse of a way to make money in multiple places, and Tencent may bet on Video Account for a long time.

2. How can video accounts make money?

Analyzing Tencent's overall revenue, due to the obstruction of game licenses in recent years, Tencent's Q3 domestic game revenue fell 7% year-on-year to RMB 31.2 billion. With the decline of "cash cow" business, video accounts urgently need to take on the task of making money.

Tencent also wrote in its 2021 annual report: "We believe that Video Account will provide important commercial opportunities, including short video streaming advertising, live broadcast rewards and live broadcast e-commerce." And Video Account has lived up to Tencent's expectations and is going further and further on the road to making money.

The reason why the video account can achieve growth in commercial realization is inseparable from the continuous efforts in content construction. According to the "2021 WeChat Video Account Ecological Insight Report" previously released by Clour, blue V accounts account for 21% of the video account, but they are active and contribute 31% of the content, of which a large number of works are information content with an extremely fast refresh rate. Personal accounts account for 74% of the video account and contribute 62% of the content, among which information, life, emotion, education and other content are more prominent. Zhang Xiaochao, head of the video account team, said: "Pan-knowledge, pan-life and pan-information, these three directions are the focus of support for the official team in the future."

In order to support content creators, Video Account once launched a series of "Creator Incentive Plans", providing traffic packages to new creators while helping them realize monetization.

As the content soil of video accounts becomes more mature, the time users spend on video accounts is gradually increasing. Tencent's Q2 financial report data shows that the total user time of video accounts exceeds that of Moments by 80%, the total video playback volume has increased by 200% year-on-year, and the number of daily active creators and daily average video uploads have increased by 100% year-on-year.

After Video Account has accumulated enough private domain traffic, various commercialization models have gradually been implemented, with live streaming being the first to bear the brunt. In July last year, Video Account established a dedicated e-commerce team. This year, on Double 11, Video Account launched private domain activation, transaction conversion, merchant incentives and other gameplay, and provided public domain traffic incentives to merchants with better performance. Tao Jia, a lecturer of the Video Account team, mentioned a set of data in the 2022 WeChat Open Class: "The GMV of live streaming sales on Video Account increased 15 times at the end of 2021, the average customer unit price in the live broadcast room exceeded 200 yuan, and the overall repurchase rate exceeded 60%."

In July this year, Video Account also launched a Video Account store independently operated by the team, which aims to build a mall and thus achieve a closed loop of e-commerce. Objectively speaking, although Video Account has achieved a lot of results in the field of live e-commerce, there are still certain development bottlenecks.

Compared with Taobao, Douyin, and Kuaishou, Video Account lacks top anchors like Li Jiaqi, Luo Yonghao, and Simba. This makes it difficult for Video Account to compete with other platforms in terms of GMV created during shopping events such as 618 and Double 11. The "quietness" of Video Account during major promotional events to some extent confirms that its e-commerce journey is still in the growth stage, and there is great uncertainty as to whether Video Account's mall can be opened up.

The 2022 Video Account Consumption Insight Report shows that the live broadcast viewers of Video Account are mainly women aged 40-55. The purchasing power of this audience group is relatively weak compared with that of young women. In order to promote e-commerce business, Video Account has chosen to continuously expand the types of consumer groups. KOLs such as Crazy Xiao Yangge and Jiangyu Alim have settled in Video Account and opened small stores. Although they have not yet carried out live broadcasts to bring goods, they have all guided sales in the video content. In addition, according to media reports, Luo Yonghao, Dong Mingzhu and others are also preparing to enter Video Account.

Recently, Video Account has been vigorously improving its e-commerce services. The newly added rehearsal mode is intended to help anchors test the live broadcast effect, and the online preferred alliance is intended to help merchants promote their products. With the Internet traffic dividend reaching its peak, it is self-evident how difficult it is for Video Account to create top anchors. How to set up a more complete mall industry chain to attract top anchors to join the game may become a new direction for Video Account to explore.

3. The era of inventory has arrived. How much growth will the video account have?

In terms of exploring incremental content, Video Account has tried its best. As for profitability, under the premise that the WeChat ecosystem continues to open up to commercialization, it can be judged that Video Account has a certain room for development. Its move to increase the volume of information flow ads shows its ambition to make money.

In recent years, the advertising situation on the Internet is not optimistic. The "2022 China Mobile Internet Half-Year Report" released by Quest Mobile pointed out that from 2021 to the first half of 2022, the overall growth rate of the Internet advertising market size slowed down. In the first and second quarters of this year, the advertising growth rates were 3.9% and -7.6% respectively.

Under such circumstances, Video Account went against the trend, added information flow ads, and launched a bidding model. Users can directly jump to product links through Video Account. The effectiveness of information flow ads was also reflected in the Q3 financial report.

In the field of advertising marketing, advertising channels that have not been used before often have a "low cost, high return" window period for a period of time. With the increase in advertising and user fatigue, the effect is gradually declining. Therefore, some advertisers have also set their sights on the new "increment" of video accounts.

Source: Tencent third quarter report

According to Tencent's Q3 financial report, the online advertising business achieved revenue of 21.5 billion yuan in the third quarter, a year-on-year decrease of 5%, but the video account performed well. The financial report disclosed that advertisers have strong demand for video account information flow advertising, especially in the fast-moving consumer goods industry. Moreover, the video account has also brought incremental advertising revenue to Tencent, offsetting the weak demand for advertising in several industries.

Weilai Automobile's community knowledge sharing platform seeds linked with video accounts and launched a live broadcast knowledge column. Yang Lan, Wu Xiaobo and others entered the live broadcast room, and the number of live broadcast viewers reached 2.54 million. Anta also launched a Winter Olympics trivia contest on video accounts. Video account marketing has begun to become a new goal for brands, and how brands can use video accounts to achieve the purpose of going viral still depends on specific content planning.

As for how many information flow ads a video account can receive, it depends on the radiation group of the video account and the conversion effect of the ads, which is precisely the purpose of the video account to plan multiple live broadcasts. In the future, in order to attract a large number of new audiences, the video account will inevitably come up with more tricks. However, for the video account, if the information flow ads are too dense, it will also affect the viewing experience and be detrimental to the content ecology. Therefore, how to grasp the "degree" is a question that the official needs to think about.

QuestMobile released a set of data last year, showing that in the first half of 2021, Douyin, Toutiao, and WeChat (friend circle) became the top three in the ranking of Internet advertising revenue. Among them, Douyin accounted for 30.2%, Toutiao accounted for 16.4%, and WeChat accounted for 9.7%. This year, Tencent President Martin Lau said in a financial report conference call: "Video account advertising revenue is expected to exceed 1 billion yuan in the fourth quarter of 2022."

As a rising star, how much market share can Video Account grab? Can Video Account create larger-scale commercial realization for Tencent without cannibalizing the advertising share of Moments? These questions need to be answered by Video Account. Now that the fourth quarter has arrived, the answer is about to be revealed. After the 2022 annual report is released, let us wait and see what kind of answer the Video Account can hand in.

Author: Rain and smoke

Source: WeChat public account "TopKlout (ID: TopKlout)"