What are the reflections on video sites behind Unicom's losses?

At the end of last month, Youku Potato Group announced its fourth quarter earnings report. According to the financial report, Youku Tudou reported revenue of 1.26 billion yuan in the fourth quarter, an increase of 40% over the same period of last year; and a net loss of 318.1 million yuan, which was a substantial increase from the net loss of 24.6 million in the same period of 2013.

Once the financial report came out, it caused a great uproar in the video website industry.

The fact that video sites continue to burn money is known to everyone, but as the current NO.1 of the video website industry, even though Unicom has a big hole of 318.1 million yuan, one can imagine the days of other video sites. How sad it is.

The aftermath of the copyright dispute remains

For the interpretation of the financial report, Youtu CEO Liu Dele introduced that, in return on investment, professional production of content and user-generated content of the return on investment is the highest, followed by Youku's original content, and the third is Hong Kong drama and Korean drama; The above three, the lowest investment return rate is the fierce competition to reach the "Red Sea" state of the hit domestic drama and popular domestic variety shows. Because, the copyright price of these contents has soared to make the video website unprofitable.

For the video website industry, in recent years, major video website companies have been struggling to buy copyright circulation users for the first position in the industry. The copyright wars that occurred in the video website industry in 2011 caused the major video website companies to still vividly remember.

The roller coaster-style madness of the copyright price of online video content can be said to reflect both the importance of content copyright to online video and the changes in the logic of the survival of the video website market. Copyright content is not only a video website company's enthusiasm, competition for the industry's first direct means, but also its most effective tool to attract users and increase traffic.


Although the enthusiasm for content copyright competition quickly passed, but throughout the past two major video sites in the content of the action, it is not difficult to find that through the intensive purchase of copyright, expand the company's visibility in the video website industry and Word of mouth, is still one of the major video sites seeking to break through the policy.

In fact, after the dissipating of the copyright dispute, major video site companies have realized that no company currently has the strength to monopolize the entire copyright content market. Although copyright content is still the most basic survival resource of major video sites, with the transformation of market logic behind copyrighted content, major video networks have reduced the operating weight of copyrighted content and have instead increased their overall strength to enhance users’ Experience.

Advertising model is in urgent need of change

The emergence of online video copyright disputes can be attributed to both the birth of the content copyright market and the stimulation of a single advertising model for the video website industry.

As we all know, copyright, bandwidth, and labor costs are considered as three big mountains in the video website industry. With the bandwidth and labor costs gradually becoming stable, the price of copyrighted content naturally becomes the key point for the industry to compete for. Coupled with the video website industry profit model, that is, the gradual emergence of a single advertising model, the market concentration of the entire video website industry naturally concentrated on the content copyright price up.

The most direct manifestation of this single advertising model is the purchase of copyright content through the purchase of the amount of play, and then realized through the use of advertising methods to offset the bandwidth, content and labor costs.

It is also the long-term existence of this business model that explains why the NO.1 premium society in the video website industry has experienced a net loss increase in revenue growth. In fact, as early as the irrational skyrocketing prices of online video copyrights, the exploration of business models by the video website industry has become extremely urgent. However, at the time, the entire industry did not have too much concern about the imbalance between input and output, and this led to the continual brewing of this dilemma.

The lack of diversification of income sources has undoubtedly become the most urgent issue for the current video website industry. Taking LeTV, which is the source of video websites, as an example, it is the accumulation of copyright in video content early on that has prompted it to rely on the distribution of copyrighted content to continue to achieve profitability.

Recently, we have realized that the excellent soil where input and output are seriously imbalanced has also begun a real change in action. First of all, it announced the restructuring of its organization and established six divisions and nine content centers to correct the disorderly expansion of enterprises in the capital market through the transformation and upgrading of the culture and entertainment ecosystem; secondly, we continue to look forward to video sites. The industry can collectively make some rational adjustments and changes.