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KFC’s family bucket presents a chicken McNugget? If it weren’t for the current decline in share price, revenue, and business, it’s hard to imagine that Alibaba’s membership plan might include Tencent Video’s VIP rights, but in the upcoming Double 11, it’s very likely to happen.
On October 11, a number of media reported that an employee certified as Alibaba Group said on the workplace social platform, “88 VIP points will be exchanged for free Tencent Video membership, which has been tested in internal grayscale and is expected to be launched before Double Eleven.”
In the news on October 12, Tencent Video temporarily denied the news. However, the long video business has not been easy to do, and Alibaba Entertainment may only be able to warm up with its opponents.
Holding a group to keep warm or helpless?
Among the current membership rights of 88VIP, Youku, a subsidiary of Alibaba Group, is the only long-form video platform that has membership rights and interests. Once the free exchange cooperation with Tencent Video is reached, users will have more choices of video content, enhancing the overall rights of 88VIP and attracting more paying members.
On the other hand, this is tantamount to announcing a compromise in the competition of domestic long video platforms, or at least lack of confidence in the attractiveness of Youku’s content. In addition, Ali has been reducing the budget invested in big entertainment to ensure the ability of its e-commerce business to cope with the rise of new forces.
In fact, in the previously announced financial report, Youku’s average daily paying users in Q2 2022 increased by 15% year-on-year. This is inseparable from several popular dramas such as “Gate of Rebirth” and “Please Call Me Director” since April, as well as the comprehensive N-generation “This! It is the IP long-tail effect of Hip-hop. However, it should be noted that a considerable part of its membership growth comes from the continuous contribution of the 88VIP membership program. In addition, Youku’s original membership base has been far lower than several other platforms in recent years.
Judging from the financial report data, the number of paid members of iQiyi and Tencent Video exceeded 100 million in 2019, and Youku no longer disclosed the number of users before that. In terms of the average daily usage time in the same year, the data shows that iQiyi ranked first with 297.49 million hours in September, Tencent Video ranked second, and Youku was only about 38% of iQiyi’s. This means that for Taoist members, Youku’s content is not attractive enough, and the pulling effect on 88VIP is not obvious.
Although according to the news on October 12, Tencent Video said: “There is no access plan for the time being, and the specific information is subject to the official announcement.” However, Alipay has previously launched a service where points can be exchanged for multiple video members. Alipay As long as you can buy Tencent members from the channel, you can provide redemption.
In addition, despite having the S+ blockbuster project “Menghualu”, Tencent Video’s own situation is not optimistic. First of all, the number of paid members has experienced negative year-on-year growth for two consecutive quarters this year. The number of Q2 members was 122 million, a year-on-year decrease of 2.4%. Secondly, according to Yunhe data, in the first half of the year, only 11% of Tencent Video’s members played the effective content, which was the lowest among several companies. In the past 10 years, the three video websites of Aiyouteng have burned a total of more than 100 billion yuan, and it seems that they have not created more and better film and television content.
This is the premise for possible cooperation. While the overall rights and interests of 88VIP are improved, it can also help Tencent Video to increase the number of paying users. Everyone can get together to warm up. In the long run, more active users also means that Tencent Video can go further in value-added services other than membership fees.
It is worth mentioning that if the cooperation is reached, it will also have an impact on other long video platforms. Taking iQIYI as an example, although it has achieved profits for two consecutive quarters this year, ending the history of continuous losses since its establishment 12 years ago, its membership income is also on the rise. However, the balance of payments mainly comes from cost reduction and efficiency improvement, and the number of projects has also decreased. The increase in membership revenue was mainly due to price increases. Its user payment scale was 98.3 million in Q2, a year-on-year decrease of 900,000.
A source close to iQIYI revealed that iQIYI VP is also negotiating with Ali, and 88VIP may gain the right to choose members of multiple parent video platforms at the same time.
Why do e-commerce members need content rights?
Since the launch of 88VIP in August 2018, in addition to the shopping discounts on Taobao and Tmall, its rights and interests mainly come from the membership linkage of Ali’s core business, such as enjoying the membership annual card of Youku, Xiami, Taopiao Piao and other platforms at the same time. Serve.
The growth of the entire Internet user has already reached the ceiling, and the second half of the Internet is to compete for stock users.
JD.com is the first attempt to localize the paid membership system of Chinese e-commerce platforms. Previously, JD.com has cooperated with iQiyi across borders, and those who have opened PLUS members can enjoy the rights and interests of iQIYI annual card membership. Some users even said that this is the main reason why she opened JD.com membership. Its latest financial report shows that as of July, the number of JD PLUS members has exceeded 30 million, and the consumption amount and consumption frequency of new members in the past year have increased by more than 150% and 120% respectively year-on-year.
However, the types of services provided by 88VIP are more diverse, making it extremely cost-effective. According to Ali’s 2022Q2 financial report, Tmall has a total of 25 million 88VIP members, and the average annual consumption of each member exceeds RMB 57,000, indicating that this group has considerable spending power and has developed a habit of paying. No matter from the number of members or the willingness to consume, it is also very attractive to Tencent Video.
For Ali 88VIP, satisfying the diverse needs of its e-commerce users is the core, and online content products are just a commodity form. Although Ali Entertainment has been underperforming, Ali has never given up on content traffic.
In June 2019, in an organizational structure adjustment of Ali, Xiami, which has been in business for many years but has been deteriorating for many years, was drawn from Ali Entertainment. In September, Alibaba participated in the Series B financing of NetEase Cloud Music with US$700 million. A year later, NetEase Cloud Music also joined the 88VIP cooperation system, becoming the only non-Alibaba Internet product. The poorly managed Xiami Music was officially shut down in early 2021.
In fact, under the requirements and supervision of relevant departments, it is also the only way for Internet companies to open up in the future. In 2021, “interconnection” will become one of the keywords of the Internet. Interconnection involves two aspects: external chain openness and data openness. Ali has responded to the policy, and its Ele.me, Youku, Damai, Kaola Haigou, Shuqi and other apps have access to the WeChat payment function.
For Internet giants like Tencent and Ali, opening up is actually not difficult. How to take into account their own market share, or get more benefits from the open Internet environment, this is a more worthy of consideration.
This article is reproduced from: http://finance.sina.com.cn/tech/csj/2022-10-12/doc-imqmmthc0661414.shtml
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