The advance on-demand broadcast of "Joy of Life" has aroused public anger, reflecting the dual game between iQiyi and Tencent Video and paid members

On December 11, when the costume drama "Joy of Life" was broadcast to episode 22, a payment window suddenly popped up on the screen. Netizens who were following the drama were told: Tencent Video and iQiyi Video launched the "Joy of Life" VIP advanced on-demand rules, that is, on the basis of VIPs watching 6 episodes in advance, VIP members can pay another 50 yuan to watch 6 more episodes when the update is released.

The rules for advanced on-demand streaming caused a stir, sparking dissatisfaction among many netizens. For a time, the two major online video platforms became the target of public criticism. The incident continued to ferment until December 17, when Tencent Video and iQiyi, unable to bear the pressure of public opinion, successively revised their rules for advanced on-demand streaming.

For online video platforms such as Youku, iQiyi and Tencent Video, their main expenditure is content costs, and their main income is membership fees. In the state of continuous losses, advance on-demand viewing is a way to accelerate monetization. However, this double charging behavior has caused user dissatisfaction and also spawned pirated resources.

"Looking at the international situation, domestic video platforms should refer to Netfilx's practices, improve the quality of membership services, formulate reasonable charging standards, and ensure a smooth transition for new and old users," a video industry practitioner analyzed and concluded.

"Joy of Life" advance on-demand streaming sparks public outrage

Recently, the popular costume drama "Joy of Life" on Tencent Video and iQiyi is at the center of controversy. Initially, due to the popularity of "Joy of Life", Tencent Video and iQiyi jointly launched the "Advanced On-Demand" service, the rule is "VIP members can watch 6 episodes first and pay an additional 50 yuan to watch another 6 episodes first."

Unexpectedly, this move aroused public anger, and was directly accused by netizens of "making quick money" and was even criticized by the People's Daily for "ugly eating habits."

A Tencent Video member told the Blue Whale TMT reporter: "I feel that recharging my membership every month is enough. Respecting creation is one thing, but you can't do it this way. It's too greedy." Another legal practitioner said on Zhihu that "iQiyi's VIP Service Agreement" is an unfair clause and decided to sue iQiyi for its "advanced on-demand" regulations.

As public opinion gradually fermented, the platform in question had to respond publicly, admitting that it "did not do it well" and began to reflect on the problems that existed on the platform in this incident.

Wang Juan, vice president of Tencent Video, said, "The reason why we have been controversial this time may be that we are not considerate enough about the consumption psychology of members. This is indeed where we have not done well enough." Dai Ying, vice president of iQiyi and general manager of the self-produced drama development center, responded, "The original intention was to meet users' more diverse content needs, but we may not have done it well. In the future, we hope to consider users' psychology more and do a good job in scheduling and informing."

Subsequently, Tencent Video and iQiyi both revised their advanced on-demand rules. Tencent Video members can still watch 6 episodes in advance, but they can enjoy the advanced on-demand right for an additional 3 yuan per episode, instead of paying an additional 50 yuan to watch 6 episodes. iQiyi also allows VIP members to watch 6 episodes in advance at 3 yuan per episode.

The reduction of member rights has encouraged pirated resources to become more and more aggressive

In fact, this is not the first time that a video platform has adopted the "advanced on-demand" strategy. According to the reporter, Tencent Video's exclusive drama "You Are My Secret" has already adopted this form, which was considered a "cutting leeks" operation on paying users, and finally ended with doubts and dissatisfaction from netizens. This summer, "The Untamed" was a hit, and the exclusive broadcasting platform Tencent Video made a profit of more than 70 million yuan through advanced on-demand at a unit price of 30 yuan. The industry generally believes that the "advanced on-demand" of video platforms is an act of exploiting the rights and interests of members.

After this round of controversy, Joy of Life became a hot topic again due to the leak of legitimate video resources. On December 19, the full set of Joy of Life appeared on the Internet. According to data from the 12426 Copyright Monitoring Center, there are more than 40,000 infringing links to Joy of Life and more than 50,000 pirated broadcasts.

Faced with the pirated resources of "Joy of Life", most paid video users voluntarily gave up the advanced on-demand viewing of the video platform and turned to downloading pirated resources. The reporter interviewed many netizens, all of whom said that they had downloaded or were watching pirated videos. "Everyone is boycotting piracy and respecting genuine products, but who respects us, the audience? The secondary charging is forcing us to watch pirated products." Talking about this, a netizen said to the reporter.

For most paying users, after the introduction of the "advance on-demand" rules on video platforms, their awareness of genuine copyright has been shattered; at a time when users are dissatisfied, pirated videos that allow users to watch the entire series in advance for free are inevitably sought after by users. However, for a small number of paying users, the viewing experience of pirated resources of "Joy of Life" is far inferior to that of iQiyi and Tencent Video, and they are still willing to choose paid advance on-demand to enjoy the best way to watch the drama.

At present, the proportion of copyright industry in my country's GDP has reached 7.35%, and the added value has reached 6 trillion yuan. Compared with developed countries, my country's copyright industry still has many shortcomings. The number of people employed in my country's core copyright industry is twice that of the United States, but the added value created is less than half of that of the United States.

The difference lies in the development of the piracy industry in my country. In the piracy industry, when pirated products have the same quality as genuine products but at a lower price, everyone will choose pirated products. Over time, the survival space of genuine products will become smaller and smaller.

Copyright industry expert Wang Dongsheng told reporters that the simplest way to curb piracy is to raise the threshold for consumers to obtain pirated products and lower the threshold for obtaining genuine products; in this way, consumers will not seek to use pirated resources.

The quality of membership services on video platforms needs to be improved

Undoubtedly, behind the double-payment of "advanced on-demand" is the profit dilemma and pressure that major video platforms are facing. Industry insiders told reporters that "the main reason for this dilemma is related to copyright fees and membership prices. Judging from the current industry situation, these two reasons exist at the same time to a certain extent."

According to iQiyi's financial report, as of September 30, iQiyi had 105.8 million registered members, with a year-on-year growth of 31%, of which 99.2% were paid registered members. In the third quarter of fiscal year 2019, revenue was 7.397 billion yuan, a year-on-year growth of 6.98%; net loss was 3.688 billion yuan, a year-on-year decrease of 17.44%.

Tencent's financial report shows that as of March 31, Tencent Video had 89 million paying users, with an average daily reach of more than 200 million people across the entire platform. Revenue in the third quarter of 2019 was 97.24 billion yuan, a year-on-year increase of 21%, of which media advertising revenue was 3.65 billion yuan, a year-on-year decrease of 28%, mainly including media platforms including Tencent Video.

On the cost side, the main expenditure of video websites is content costs, including the production costs of self-made content and the copyright procurement costs of external content. According to data, Tencent Video's copyright expenditure reached 25 billion yuan in 2018, iQiyi's copyright expenditure was 10 billion yuan, and Youku's copyright budget was as high as 30 billion yuan.

In recent years, driven by the concept of "content is king", the copyright disputes among video platforms have become increasingly fierce, and copyright fees have also risen. In the second half of 2018, the salary limit order and entertainment limit order were successively issued, and the copyright costs of video platforms declined, but the growth rate of the video industry also slowed down overall. According to statistics from QuestMobile, as of June 2019, the number of active users of online videos increased by only 2.4% year-on-year, which is the lowest level in the pan-entertainment industry.

Industry insiders told reporters that as the entertainment industry encounters a capital winter, advertisers have adopted a conservative attitude towards the overall growth of marketing budgets for video platforms. This is undoubtedly a double whammy for video platforms that achieve a closed business loop by "attracting new users" and placing advertisements by merchants.

What video platforms need to do now is to set reasonable prices and continuously produce high-quality content. "Looking at the international market, domestic video platforms should refer to the practices of Netfilx, improve the quality of membership services, formulate reasonable charging standards, and make good transitions between new and old users. The new opportunities brought by the increase in users' willingness to pay, the new value generated by the ecological linkage across content fields, and the vast international market will all be opportunities for the domestic video industry," an industry insider concluded.