Tencent plans to become a shareholder of iqiyou aiteng, and the Three Kingdoms war is coming to an end

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Original title: focus analysis ︱ the end of the Three Kingdoms killing of you aiteng
Author: Wang Ying
Domestic video websites may usher in a new round of reshuffle, Tencent video and iqiyi form an alliance, and leave Youku far behind.
On June 16, Reuters reported that Tencent had contacted Baidu, which owns 56.2% of iqiyi, to buy iqiyi’s shares. At present, the scale of the shares purchased is not clear, but Tencent’s goal is to become the largest shareholder of iqiyi. However, people familiar with the matter also said the plan was still at an early stage and could be changed at any time.
Krypton confirmed iqiyi and Tencent on the matter, both sides said they would not comment.
“The alliance will improve their bargaining power in producing and buying content and reduce marketing costs,” Reuters reported
Obviously, the capital market is very optimistic about such a business action, and their attitude has long been reflected in the stock price. After the news, iqiyi’s stock price rose in a straight line, up to 40%.
If the news is true, then this is another business event worth recording in history. In the past decade, domestic video websites have established a member payment model, launched advanced on-demand broadcasting, and increased the number of paid members of the platform to 100 million. They have innovation, but at the same time, they are still struggling with losses. Burning money makes the video industry finally form the pattern of the three poles of euaiton, but now, the story of domestic video websites will be rewritten.
Danger and opportunity of long video
For the news that Tencent has become the largest shareholder of iqiyi, the attitude of the insiders is mostly “unexpected and reasonable.”
In the development of video industry, the discussion of “iqiyi is short of money” is no less than “whether Youku will be sold” and “Ali gives up big entertainment”. Almost every once in a while someone will say something about iqiyi’s lack of money. At the end of the day, due to the high cost of content, the industry’s ills have been magnified infinitely in this listed company, and iqiyi’s cost of content reached 22.2 billion in 2019.
There are two reasons for the high cost, one is the stereotypical star salary is not high, the other is that the cost competition of video websites makes the drama IP soar. In addition, in terms of content betting, their attitude is more “you have me have”, one is “Creation Camp” and the other is “youth has you”. Even though the two programs seem to be similar, they still have to compete under the limited attention of the audience, expecting a big hit.
Competition is not all bad, at least at the user level. The first month for new users is 8-10 yuan, and one sweet pot can enjoy advertising free + VIP content. From 198 yuan to 248 yuan, you can enjoy more video content, TV series, movies and variety shows for one year. Even though each company is raising its price in disguise, as long as the competition exists, they will “reduce the price” by various promotion methods.
But video sites are getting smarter. Users of “Qingnian” must be the first to notice this change. In terms of the cost of the play, iqiyi and Tencent video have consistently launched advanced on-demand, standing at the same echelon, which makes them win-win.
A fact that can not be ignored is that although the membership scale of the two video websites is expanding rapidly – iqiyi and Tencent video membership scale has broken billion, the other side of the coin is that the base of membership scale is already large, the plate is smaller and smaller, and the battle situation of video websites is more intense. And the advertising revenue, another revenue pillar of the video website, has turned sharply under the influence of the epidemic. In such a war situation of video sites, life is not easy.
The alliance, not only can reduce the cost of competition between the two sides, but also can make them agree with the outside world, leaving Youku, the third in the industry, completely behind. “Youku doesn’t have much content this year, only” this is street dance “and” watch my life “are the two main tweets,” Youku insiders told 36 krypton. It is worth noting that “this is” IP was bought by Yang Weidong, former president of Alibaba culture and entertainment Youku. Youku’s weakness will become more and more obvious in 2020.
If Youku missed an era, iqiyi seized the golden time of the rapid development of the mobile Internet, and pledged to win “Yanxi strategy”, “QIPA theory” and other hot money with innovative ideas.
If iqiyi’s innovative gene can be combined with Tencent video, which forms the waist product line. Then we can expect that the domestic video website history rewrites, and the revenue develops in a more healthy direction. And for users, the most obvious perception may be that members really raise prices.
Is Baidu willing?
However, there is also a key factor that can not be ignored in the end of the Three Kingdoms killing of video websites – Baidu. Who owns iqiyi after all, and Baidu still dominates it.
“Baidu is considering delisting from Nasdaq and moving closer to home to raise its valuation,” Reuters reported Perhaps this is also an important reason why baidu wants to sell its equity in iqiyi at this time, which can make Baidu richer. Besides, there is privatization.
On May 19, baidu announced its financial report for the first quarter of 2020, with revenue of 22.5 billion yuan and net profit of 3.1 billion yuan, both of which exceeded market expectations. Healthy performance, business update, this should be a healthy Internet company’s normal. But in the past year, Baidu has experienced a very different landscape.
On May 18, a year ago, baidu released its 2019 Q1 financial report. All indicators made the industry roar. Especially in terms of revenue, baidu suffered an operating loss of 936 million yuan, the first quarterly loss since 2005.
Although Baidu is now on a slow track, the fact can not be ignored is that Baidu is now facing multi-dimensional competition from headlines, Tencent and so on, and it still needs ammunition.
There are no lack of cases in Baidu’s development history. In October 2019, baidu sold some shares of Ctrip. Com, with the proportion of shares held in circulation decreased from about 19% to 11.7%, and Baidu recovered $1 billion.

Although iqiyi’s business can bring stories to Baidu, it fails to bring more growth momentum, and when Baidu loses money, iqiyi’s financial consolidation will make this situation even more embarrassing.
On the other hand, Baidu’s layout in content is more focused on hundreds of websites, search knowledge system, good-looking videos and comprehensive small videos, but it’s hard to say that Baidu’s short videos are doing well at present. In the long video layout, iqiyi and Baidu are relatively independent. In bat, entertainment plays a weaker role in Baidu than Tencent and Alibaba. Perhaps it can also be said that Baidu’s entertainment strategy is not as clear as a and t.
Tencent is different. In the competition in recent years, Tencent video has formed a set of relatively mature playing methods, which pay attention to the arrangement of troops with waist content, and the waist product line has been formed and very solid. In addition, in the upstream and downstream of the entertainment industry, Tencent also has Yuewen, Tencent film and Tencent animation. Under the strategy of “new culture and innovation”, Tencent is accelerating its integration.