The membership scale has peaked, and Tencent Video wants to save itself by advertising.
Author/wordless
Produced by/New Pick Business Review
Since 2024, Tencent Video has continued to be popular.
Image source; Tencent Video
Following the "Breaking the Circle" of "Flowers" at the beginning of the year, "Celebrating More Than Years 2", which returned after five years, also became the "drama king". Yunhe data shows that on the premiere day of May 16, the effective broadcast market share of "Celebrating More Than Years 2" was 17.9%, topping the daily list. On the 27th, the market share of "Celebrating More Than Years 2" was more than half, reaching 51.2%.
Considering that the foundation of the long video platform's revenue generation is high-quality content, two hits in a row may bring huge commercial returns to Tencent Video, allowing it to gain a large number of subscribers.
However, it should be noted that while the popularity of "Celebrating More Than Years 2" remains high, it has also been widely criticized. According to the statistics of Douban users "Come to see the month", the average number of advertisements in the episode of "Celebrating More Than Years 2" is as high as 7.94, which greatly affects the user's viewing experience.
This also shows from the side,Tencent Video's performance is not as bright as expected,With the mobile Internet traffic dividend peaking,Tencent Video is difficult to continue to capture the new generation of users,Can only continue to tap the "residual value" of advertising。 In the long run, even loyal viewers may also be resistant to Tencent Video.
1. Increase the quality of content,
Tencent Video is finally profitable
Once upon a time, Tencent Video has always adhered to S+, big stars, big productions and other modes to create content, and most of the content themes are Xianxia ancient sayings, modern life, marriage and family, etc., and the quality is uneven.
Since 2020, with the pressure of the economy, the increasingly stringent requirements of capital for streaming media platforms, and iQIYI's reliance on high-quality content to turn losses into profits, Tencent Video has also begun to change its operation strategy, committed to creating high-quality content in suspense, science fiction, comedy and other fields.
Source: Tencent Video
In this context, in the past two years, Tencent Video has launched high-quality content such as "The Three-Body Problem", "The Legend of Magpie Knife Gate" and "The Long Season". Among them, the most noteworthy is "The Long Season", which is the first work of Tencent Video X Theater, with a popularity value of over 26,000+ on Tencent and a Douban score of 9.4 points, breaking the highest rating record for domestic dramas in the past 8 years.
Source: Vlinkage
Overall, Tencent Video also ranks among the best in China's streaming market in terms of the amount of premium content. According to the data collected by Vlinkage, in 2023, among the domestic dramas with a Douban score of more than 8 points, Tencent Video has 9 dramas, accounting for 39.13%, ranking first.
Compared with iQiyi's precedent of achieving annual profitability only by "Hurricane", Tencent Video, which has more high-quality content, can naturally break free from the quagmire of losses.
At the beginning of 2023, "LatePost" reported that Tencent Video's annual revenue in 2022 exceeded 10 billion yuan, and it began to make a profit from October. At the annual press conference of Tencent Video Film and Television held on June 19 of that year, Sun Zhonghuai, vice president of Tencent and CEO of Tencent Online Video, also revealed that Tencent Video has been profitable for four consecutive quarters.
It is foreseeable that the two popular dramas "Flowers" and "Celebrating More Than Years 2", which will come out one after another in 2024, will further consolidate the profitability of Tencent Video.
Second, the industry market has peaked,
It is difficult to grow the number of paid members of Tencent Video
Although Tencent Video's high-quality content library is constantly enriching, it should be noted that the reality that China's mobile Internet traffic dividend has peaked also determines that there is a natural ceiling for the commercial return of Tencent Video's high-quality content.
图源:QuestMobile
According to the "2024 China Mobile Internet Spring Report" disclosed by QuestMobile, as of March 2024, the number of mobile Internet users in China is 1.232 billion, an increase of only 22.21 million year-on-year, and the industry has entered the era of stock.
The industry traffic market has reached the top, and the user scale of the streaming media platform has also reached a bottleneck. According to the data of Lighthouse Professional Edition, since 2024, the total number of daily dramas on the whole network in China has hovered in the range of 3.2-360 million, and only in the context of the emergence of highly topical content such as "Celebrating More Than Years 2", "Between the Ink Rain Clouds" and "The Story of the Rose", it has briefly touched a high of about 380 million.
In this context, it is difficult for the number of paid members of many streaming media platforms to grow rapidly. As early as 2021, the number of paid members of Tencent Video reached 124 million. By Q2 2022, this number dropped to 122 million. In Q1 2024, despite the blessing of dramas such as "Flowers" and "Ice Hunting", the number of paid members of Tencent Video will continue to decline to 116 million.
Coincidentally, iQIYI is also facing similar challenges. In Q1 2023, driven by "Hurricane", the total number of daily average subscribers of iQIYI will reach 129 million. In Q4, iQIYI's average daily subscribers dropped to 100.3 million. Due to the peak of membership scale, starting from Q1 2024, iQIYI will no longer disclose data related to the number of members and monthly average single member income.
图源:QuestMobile
Tencent Video、iQiyi's membership scale has peaked,To a large extent, it is because the popular content has a strong timeliness,After watching the popular content,When other content is not attractive,Users will no longer stay in the platform,Continue to pay for the platform。 According to data disclosed by QuestMobile, in March 2024, the off-season of content supply, the monthly active users of iQiyi, Tencent Video, and Mango TV fell by 19.5%, 2.3%, and 3% year-on-year, respectively.
It is true that streaming media platforms can continue to increase the supply of content and attract users to pay, but the reality that the user scale has reached a bottleneck also determines that it is difficult for streaming media platforms to promote the company's performance by endlessly increasing content supply. Because if you increase investment in content regardless of the cost, and the scale of downstream payment is very limited, then the streaming platform may even fall into the quagmire of losses again.
3. Tapping the residual value of advertising,
Tencent Video may be counterattacked
Although the scale of mobile Internet users and the ability to pay are reaching a bottleneck, the Internet advertising market is still growing steadily because ad service providers can capture revenue by buying users' attention.
图源:QuestMobile
According to data disclosed by QuestMobile, from Q2 2023 to Q1 2024, the scale of China's Internet advertising market will be 168.2 billion yuan, 167.13 billion yuan, 232.06 billion yuan and 152.91 billion yuan respectively, a year-on-year increase of 14.1%, 3.6%, 9.8% and 4.6% respectively.
Against this backdrop, many Internet companies have performed well in their advertising business. For example, in Q1 2024, Tencent's online advertising revenue will be 26.5 billion yuan, a year-on-year increase of 26%. Coincidentally, the advertising revenue of Station B also increased by 31% year-on-year to 1.67 billion yuan in the same period.
In this context, Tencent Video no longer focuses on the subscription payment business model, but hopes to generate revenue through advertising. During the broadcast of "Celebrating More Than Years 2", Tencent Video launched a new viewing mode, and users can watch advertisements in the Tencent Video App in exchange for the viewing time of "Celebrating More Than Years 2".
Source: Netflix
In fact, not only Tencent Video, but also overseas streaming giant Netflix also sees the potential of the advertising business. In November 2022, Netflix launched a low-cost subscription model with ads. This model is popular because of the lower cost of subscriptions. In May 2024, Netflix revealed that the subscription model with ads has more than 40 million monthly active users worldwide. Netflix executives predict that from 2025, the advertising business will become an important contributor to the company's profitability.
However, it should be noted that Netflix's advertising model and non-advertising model are clearly distinguished, on the other hand, Tencent Video not only provides advertising services for non-member users, but also repeatedly increases advertising efforts for feature films watched by member users.
Source: Douban "Come and see the moon"
"Flowers", which will come out in early 2024, has been on the Weibo hot search list because of "10 advertisements in an episode of flowers". According to the statistics of Douban user "Come to See the Moon", the total number of title brands of "Flowers" reached 40, and the highest number of advertisements reached 11 in one episode. "Celebrating More Than Years 2" also has a similar trend, with a total of 32 title brands and an average advertising time of 117.86s.
With such a vicious placement of advertisements, it is difficult not to disgust the audience. According to the aggregate data, 8% and 40.2% of the audience have negative emotions about the advertisements in "Flowers" and "Celebrating More Than Years 2", respectively.
Considering that non-subscriber users can also watch "Celebrating More Than Years 2" in the context of watching ads, the increase in advertisements for Tencent video dramas will greatly reduce the value of member users.
In the long run, Tencent Video viewers' enthusiasm to pay may be greatly hit, and they will turn to free advertising to watch content, or switch to other streaming media platforms.
From this point of view, the current strategy of Tencent Video is very much like a zero-sum game, which only allows non-members and members to pull each other, but does not create incremental revenue.
This also seems to have decided that Tencent Video will inevitably have the fate of peaking performance.