16 iqiyi fell overnight, and the boss of Internet video was beaten in the face
2022-05-04
Reed Hastings, a frequent guest on the Forbes us rich list and founder and CEO of streaming video giant Netflix, finally "bowed his head". His attitude towards advertising mode has changed from "opposition" in the past years to "openness". Hastings said, "those who pay attention to Netflix know that I have always opposed complex advertising, but I prefer consumer choice and allow consumers who want lower prices and are tolerant of advertising to get what they want, which is very reasonable." To make a long story short, Netflix will start offering low-cost subscription services with advertising breaks. Behind the change of attitude, it has something to do with Naifei's performance and the recent poor performance of the capital market. According to the first quarterly report of Netflix in 2022, its net user growth is negative for the first time in 11 years. Q1 lost 200000 global paying users compared with the same period last year. Previously, the company and the market were expected to add 2.5 million and 2.73 million respectively. As of Q1, its global number of paying users was 222 million. Naifei explained that "macro factors such as weak economic growth and the conflict between Russia and Ukraine have a negative impact on Naifei's income, as well as the continuous interference of the COVID-19." The external cause is the condition, and the internal cause is the fundamental. The biggest concern for Naifei lies in its future growth and whether it maintains strong competitiveness. one Hastings once compared the company to an Olympic National Team in his book no rules rules: Netflix and the culture of reinvention published in 2020. "Only those who are at the peak can be selected, and those who are in decline will be eliminated immediately." Perhaps he did not expect that in less than two years, Naifei had shown the fatigue of "decline". Bloomberg said in the report, "from the data of net new users, Naifei may usher in the worst year in the history of listing." Moreover, the revenue of US $7.868 billion in the first quarter was also lower than the expected US $7.95 billion and US $7.903 billion by the market and Naifei; The net profit of US $1.6 billion decreased by 5.9% compared with us $1.707 billion in the same period last year. Nai capital is also under pressure from the market. The day after the release of the first quarterly report (April 20), Naifei closed down by 35.12%, and the market value evaporated nearly $50 billion, a new low this year, equivalent to the evaporation of 12 iqiyi. As of the closing of Meidong on April 29, Naifei's share price has fallen 68% this year, and the market value of US $84.572 billion has also shrunk 72.93% compared with the highest US $311.2 billion in history. To make matters worse, the financial report predicts that Naifei's global users will decrease by 2 million in the second quarter. Naifei is not only a global streaming media giant, but also the only consumer company squeezed into faang, a star technology stock in the US stock market. Now it is not only known as the "falling king", but also said that "n" is likely to be replaced by "m" (Microsoft) among the most popular technology stocks in the US stock market. Hastings probably didn't expect the 25-year-old Naifei's adjustment period to come so fast. In 1997, after selling his first company (software) pure, he and mark Randolph jointly founded Netflix, which focuses on the traditional business of DVD leasing, and provided DVD leasing services through the network. At the end of 2001, its subscribers increased to 500000. With the decline of the traditional DVD rental industry, Hastings made a decisive transition to streaming media and bet on the production of original content, which also fired the first shot for its landing capital. In 2002, Netflix landed on NASDAQ. Patty McCord, the former chief talent officer of Naifei, once said in an interview with US media, "once Hastings decides what to do, it is difficult for others to persuade him. He will be like a beast when talking about his ideas and desired goals." Hastings' insistence and paranoia on creating DVD online rental and exempting late fees, as well as the member subscription model (since 1999) have laid a solid foundation for Naifei's soaring. Even when the Internet Foam Burst in 2000 and no money was available, he did not give up his insistence. After surviving the disaster and successfully landing in the capital market, Hastings, who is extremely sensitive to new technologies and user data, took his Naifei to actively transform streaming media, use streaming media bandwidth to save technology, and launch personalized film recommendation system. In 2006, Netflix developed nearly 10 million subscribers through DVD rental and sales, with an annual revenue of US $27 billion. The following year, Netflix officially launched online viewing service, and then it frequently cooperated with hardware providers including Microsoft Xbox and Apple TV to implant its streaming media software into various Internet terminals. However, three years later, in 2010, Netflix became the largest streaming media company in North America, and then expanded its business to the international market. During this period, youtube, established in 2005, developed its video viewing volume to the same level as its paid users in only one year, which made Hastings realize that it is only a matter of time before the end of DVD rental business, and it is imperative to transform streaming media. Hastings split its main business in 2011, integrated DVD rental business into a new brand, and Naifei comprehensively transformed into the streaming media market. In 2012, under the influence of the premiere strategy of its rival Hulu, Naifei quickly "turned" and took the content as the focus of the company, focusing on developing service innovation such as content premiere and independent broadcasting and self-made content production mode. In 2012, it launched the first premiere play "liliheimer", which was a fruitful exploration although it was not popular. two "When Netflix rose, other media giants were sleeping. When others woke up, the time to defeat Netflix had slipped away and could never be repeated. What other companies lost was their hegemony over the whole industry." Barry Diller, former chairman of paramount, once expressed his "respect" for Naifei. In 2013, Naifei ushered in its "life changing" year with a global popular online drama. Hastings bought the copyright of house of cards in 2011 and broadcast the play of the same name with a cost of $63 million in 2013, which not only made Naifei out of the world, but also added about 10 million paying users. Since then, Hastings has regarded good content as Naifei's "Bible" and opposed the advertising model. Simple and crude content drainage and paid member realization mode have been accompanied by the battle of Netflix streaming media so far. The advanced success of house of cards has strengthened Naifei's continuous investment in content. In recent years, its annual investment growth rate has been maintained at about 25%. According to incomplete media statistics, in 2013, its investment budget for content was about US $2.4 billion; In 2021, this figure exceeded US $17 billion. In addition to content production, it also increased cooperation with Disney, cable TV, producers and other platforms and channels to increase the content layout. At this time, Naifei was invincible in the streaming media market. It created the Internet era with content as the king and successfully ranked as the "wind vane" of the global streaming media industry. On May 22, 2018, Netflix surpassed Disney in market value for the first time and became the world's largest streaming video platform and content production company at that time. three In 2021, the popular global phenomenal online drama "squid game" created a short highlight moment for Naifei recently. Not only did the share price hit a record high of $700.99 in November, but 142 million users around the world watched it within four weeks of its launch, which made Naifei hot again. Good times are always short. Since the end of the play, Naifei's global popular content library has presented an "empty window" period. High quality content is the basis of Naifei's survival. Without good content, it is bound to affect the depth of its moat. The outside world has doubts about its single business model and growth direction. In addition, Hastings, who has always been dismissive of his competitors, now has to admit to investors that "new competitors have launched some very good programs and films." These rivals include youtube, Amazon, Disney, HBO, paramount, peacock and apple. They have money, channels, user base and IP. In the face of the severe situation that users are diverted, what are the odds of "single" Naifei winning? As Naifei said in the financial report, "while competing with rivals for viewing time, more and more traditional entertainment companies began to enter streaming media services, resulting in the loss of some users and revenue from Naifei." Since 2020, Warner, Disney, NBC and others have received the content cooperation previously reached with Netflix back to their own streaming media platform for broadcasting. For example, Warner has recovered the global blockbuster drama friends and broadcast it on its own HBO max; Disney, a big IP player, takes all the content back to its Disney +. According to the data of parrot analytics, from 2020q2 to 2021q4, the demand share of Netflix's global original content decreased from 55% to 45.4%, while the share of Disney +, HBO Max and Apple TV + increased from 10.6% to 20.6% in the same period. Although Naifei is still significantly ahead of other platforms, combined with its current situation, it is a threat that can not be ignored. In fact, Naifei's "decline" appeared in Q2 in 2021. At that time, its paid users in North America showed negative growth for the first time, but the "alarm" was not taken seriously by the outside world because the high growth in Latin America and the Asia Pacific region drove the overall paid users at that time. For two consecutive quarters (2021q4 and 2022q1), the performance was lower than expected, so that paranoia such as Hastings had to "bow his head". He no longer insisted that the user payment model was the only one and no longer opposed the advertising model. Of course, from a certain point of view, a single business model can be interpreted as "focus", but from another point of view, it also means a single growth curve and single income. Different from Netflix's risky single business model, its main competitors are giants with diversified businesses, such as Google, apple and Amazon, which are well funded technology giants; Disney + which highly overlaps with Netflix's business is only a part of Disney's content direct sales business. At present, Naifei's single user payment mode makes it relatively insufficient in content production, even though its production cost is much lower than that of other competitors. In order to find a new business growth model and deal with the balance between user payment and content production cost recovery, Netflix has increased its revenue by raising the member price every 1-2 years in the past few years. For example, ARPU (average user value) in North America has increased from $11.28 in 2018q4 to $14.68 in 2021 due to the price increase, but with little effect. In addition, it has also arranged the game market by acquiring a number of game developers to create the company's second growth curve, but the business is still in the exploratory stage, and it is unclear whether it can travel. Barry Diller once said that "the time to defeat Naifei has slipped away", but facts have proved that this time also has a shelf life, and the time to challenge Naifei may have come. (Xinhua News Agency)
Edit：Chen Jie Responsible editor：Li Ling
Source：biz-leaders
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