Volume 3: Taking Roots 2016 Chapter 755: Today is Different than Before
"It turns out that one should not underestimate the heroes of the world!"
While Toutiao responded quickly, Zhou Dongsheng was in the chairman's office of Dongsheng Group.
Looking out the huge floor-to-ceiling windows at the unobstructed view of the Oriental Pearl Tower and the Huangpu River, Zhou Dongsheng leaned back in his comfortable boss chair, feeling filled with emotion.
As expected, I have a plan and my opponent has a way out. Toutiao’s quick response not only minimized the impact of public opinion, but also cleverly diverted its own contradictions.
As the latter spent a huge amount of money, such as 1 billion yuan, to subsidize the creation of short videos on the platform, the general public's attention also shifted.
After all, when it comes to the number of billions that the general public is most often exposed to, perhaps only the total population of China is close to it.
As for other situations, it is rare to encounter such a magnitude, and the number 1 billion, compared to 100 million, brings exponentially more shock.
Although it is only the difference between eight and nine zeros, just like your own bank balance, the positive feedback brought by the extra digit often makes people want to count it several times.
Especially when the money is "closely related" to oneself.
That’s right, it is an eternal truth that money can move people’s hearts. When Toutiao announced that the “1 billion subsidy” was used to subsidize the creation of short videos, it was enough to have a fatal attraction for many users.
After all, as an emerging industry, the short video field is still in a state of disrepair, although top IPs such as [Papi Jiang], [Mu Ziqi] and [Big Stomach Prince Mi] have begun to emerge.
But obviously, there are still a lot of gaps in the industry that have not been filled. It is far from reaching saturation, let alone the point of forming a Matthew effect.
In other words, everything is uncertain and anyone could become the dark horse.
Even just for the name of "1 billion subsidies", it is enough to attract a large number of users to join the Ame platform and start to post their first short video tentatively.
All things are difficult at the beginning. Once countless users begin to take the first step in the field of short videos, in such a process of survival of the fittest, there will inevitably be gold emerging and some creative creators will emerge.
Whether it is cash subsidies or the benefits brought by traffic, it will form an incentive for creators. Once this positive feedback mechanism is successfully established, it will form a virtuous circle that the platform needs most for development.
This will provide a steady stream of traffic support for Ame's development.
Since Toutiao just received US$1 billion in financing, it is willing to directly invest RMB 1 billion to bet on the short video field.
It is not difficult to see that Toutiao is indeed optimistic about the development of short videos, and also hopes to develop short videos into a new growth point for itself.
What Zhou Dongsheng didn’t know was that what prompted Toutiao to make this decision was precisely the rapid development of Douyin in China, which attracted hundreds of millions of users in less than a year.
Although Zhou Dongsheng contributed to the trend, to some extent, it is enough to prove the potential of the music short video track.
Even though there are already leading players like Kuaishou and Meipai in the short video market, even Weishi, which is backed by Tencent, has been squeezed out.
However, it has not effectively hindered the development of Douyin. This is the strongest evidence for the potential of the "alternative" track of music short videos!
It was precisely because of this example that after Toutiao completed its financing, it immediately planned to bet on the future of the short video industry, and even went so far as to completely replicate the essence of the Douyin software.
The goal is to grab a piece of the market at lightning speed.
As long as we can occupy the market first, it doesn’t matter how much trouble we have with the rest of the things, even if we lose some money as a result.
Just like the dispute between Microsoft and Apple over operating systems, once Microsoft has completely completed its monopoly on the operating system and everything is settled, the question of who will develop the visualization system first will lose its meaning.
After all, the market cannot go back to its old ways. The market inertia is so great that even Apple cannot reverse the situation. It can only open up a new world in another track.
Cases like this are always common in the business world, which is like a battlefield.
After all, throughout history, there is nothing new under the sun.
However, after Toutiao spent huge sums of money to come up with the gimmick of "1 billion subsidies", for the general public, the discussion on who is genuine and who is pirated has obviously lost its meaning.
After all, who can resist money?
The only things that the general public cares about are how to get the wool, what methods can be used to get the money quickly, what simple and crude ways are there to take advantage of the popularity, etc.
If you don’t make money when you have it, you’re a bastard!
Zhou Dongsheng methodically unravels the mystery and analyzes his opponent's thinking from his own perspective. This is also a way for him to improve.
After all, if you want to go higher and further, it is obviously impossible to always be smooth sailing. There will always be times when you hit a wall.
This time, the opponent, Toutiao, obviously understands human nature better than himself, and that's human nature. In Zhou Dongsheng's view, no one is nobler than anyone else, so there is naturally no need to dwell on and condemn the opponent.
After all, the card of moral condemnation has been played, so what will naturally come next is a real hand-to-hand fight with real guns and swords.
As for how to deal with the opponent's "1 billion subsidy" trick, considering Zhou Dongsheng's limited ability, he really couldn't come up with any clever way to resolve it for the time being.
The only simplest and most brutal way to deal with it is to follow up and introduce the same creative incentive method to further consolidate the content creators on the Douyin platform.
After all, the "1 billion subsidy" not only completely consolidates the foundation of the Ame platform, but also directly shakes the foundation of the Douyin platform.
At present, except for some top IPs that have successfully embarked on the path of traffic monetization through advertising, the vast majority of middle and lower-level creators who continuously produce high-quality content are still generating electricity with love.
There is no doubt that a major driving force behind their continuous output is that after becoming a top IP, they can take on advertisements to monetize traffic and thus increase their own income.
Before Toutiao raised the banner of "1 billion subsidies", this seemed to be the only viable way to monetize traffic in the industry.
However, when Toutiao represents the platform and takes action, it undoubtedly provides countless creators with a seemingly more convenient shortcut.
Before growing into a top IP, being able to obtain some official subsidies is undoubtedly an incentive measure that is more conducive to the growth of creators.
After all, there are thousands of content creators, but how many top IPs can there be?
The pyramid structure is a stable structure derived from the evolution of thousands of industries. It is a valid law in any industry, and the short video industry is no exception.
Therefore, if we want to stabilize the underlying structure and not be shaken by Toutiao’s financial offensive, the only way is to give more benefits to users.
After all, what is worrying is not the lack of it, but the inequality of it. At the very least, we must ensure that Douyin's basic users will not be disheartened. Otherwise, everyone will be a short video user, and others will get money, but your company will not treat users as human beings...
Once you lose the support of the people and become alienated from them, being deserted by everyone is the only natural outcome.
Once Toutiao starts to stir up trouble and start its own internal competition, it will inevitably force the entire industry to enter a stage of fierce competition more quickly.
Just like the "Thousands of Broadcast Wars" on the live streaming platforms next door, it all comes down to competing for traffic, and the battle for traffic in the short video industry has quietly sounded the clarion call for battle.
After the first round of confrontation between the two sides, the only thing left in the public opinion field was bickering between the two sides. It was obviously impossible to determine the winner with words alone.
Then, we can only wait and see the truth on stage.
At the same time, Wenxue Network had already released news of a new round of financing. As the second largest shareholder, Dongsheng Group naturally took the opportunity to act as an investor.
It has to be said that whether it is Douyin, which now has hundreds of millions of users, or Zhou Dongsheng, the new capital upstart behind Dongsheng Investment, it is enough to make many institutions have a strong interest in this round of financing.
If we look closely at Wenxue Network's first two rounds of financing, starting from the entry of Dongsheng Investment, which won the A round of financing alone , Wenxue Network has launched a series of drastic measures.
Not only did it change the company's strategic direction and shift its focus on overseas markets back to the domestic market, but the entry of Dongsheng Media, one of Zhou Dongsheng's two major media companies, into the company has injected a large amount of traffic.
This included many gaming anchors who were enjoying great success on the live streaming platform at that time, not to mention the mainstay [Papi Jiang] who was almost tailor-made for the platform.
Not to mention the Golden Second Award, a pioneering short video industry awards ceremony. If it were only hosted by Wenxue Network and Dongsheng Media, it would inevitably be suspected of self-entertainment.
It was even more difficult to rise to the top of the industry. However, with the help of investor Zhou Dongsheng, Ding Sanshi, an Internet tycoon, was brought in to help.
This directly increased the value of this award ceremony, and at the same time, Zhuchang Capital participated in the B round of financing.
By leveraging on the resource exchange with Zhuchang in music, the upstream resources of Douyin's localization strategy were directly opened up.
The issue of music copyright, the biggest obstacle to Douyin's music + short video model, has been completely cleared away. After these two rounds of financing, Wenxue Network has indeed been unstoppable in its development.
Of course, Wenxue Network also paid a considerable price for this. After two rounds of financing, it sold more than 40% of its equity, plus 5% personal equity of Zhou Dongsheng, the strategic investor.
Currently, the founding team headed by Yang Luyu holds just over half of the shares. This is roughly the benefits and costs of embracing capital.
At that time, in the B round of financing, the valuation of Wenxue Network was only US$300 million, which means that the US$1 billion in financing obtained by Toutiao could easily buy three Wenxue Networks and still have US$100 million more.
But it is obvious that after a whole year of development, the now prosperous Wenxue Network is no longer what it used to be.
Although it cannot be compared with the entire Toutiao system with a valuation of over 10 billion US dollars, its unique advantage of having access to domestic and overseas markets has already far exceeded the value range of "1 billion US dollars".
To a certain extent, under the influence of Zhou Dongsheng, Wenxue Network has completely escaped the fate of being acquired by Toutiao for US$1 billion.
The current market value of Wenxue Network is conservatively estimated to be no less than 3 billion US dollars!
The market valuation is never groundless. As a reference for horizontal comparison, Kuaishou and Meipai, the two industry leaders, are undoubtedly the most valuable reference objects.
Among them, Meipai is just one of the businesses in the company's diversification strategy compared to the towering Meitu company behind it.
Meitu, which submitted its prospectus to the Hong Kong Stock Exchange as early as August this year, has taken the lead in embarking on the IPO journey. The current valuation of the entire company exceeds US$5 billion.
Compared with the large and powerful Meitu company, Kuaishou is undoubtedly more valuable for reference.
After all, like Tongwenxue Network, Kuaishou is also an explorer that only focuses on developing the short video field, and the short video business is also its only core business.
As early as March this year, Kuaishou, which only has short videos as its business, had a valuation of more than 2 billion US dollars. It should obviously not be a problem for it to double its value in the next round of financing.
If we only calculate the user size of the domestic market, Kuaishou, with more than 300 million users, is naturally far ahead.
However, for Wenxue Network, which has markets at home and abroad, it is obviously even better in this regard.
Although Wenxue Network’s user base in overseas markets has long been overtaken by the localized Douyin.
Among them, musical.ly's user base only just recently crossed the 100 million mark.
However, as a software that can run smoothly in two domestic and overseas markets with completely different cultures, its value is clearly a typical example of "1+1 is greater than 3".
If it is elevated to the level of a "bridge" for cultural exchanges between the East and the West, it is natural that the market gives it an extremely high valuation.
If this estimated goal can be achieved, it would not be surprising if the value of Wenxue Network increased by dozens of times.
So when Wenxue Network announced its intention to raise funds, many investment institutions were extremely enthusiastic and almost broke down the threshold of Wenxue Network.
To the extent that for a time, Yang Luyu didn't even have time to care about the reaction of Toutiao, but was instead busy dealing with the olive branches thrown by many investors.
It can be said that it is a mixture of pain and happiness. I believe no one would refuse this kind of happy trouble.
Among them, even the investment department of Tenda, which was already preparing to invest in Kuaishou, the industry leader, could not help but show strong interest in Wenxue Network.
After all, as a major overlord of China's Internet, Tenda's appetite is no longer satisfied with its small piece of land in China.
The investment and deployment of overseas strategy is undoubtedly Tenda’s next ambition.
However, precisely because Tengda is too large, it is extremely difficult to implement its overseas strategy as any move would affect the entire body.
Therefore, they can only settle for the second best and choose to invest in various overseas projects or companies with the potential to enter overseas markets.
Among them, the globally popular League of Legends can be regarded as one of the most eye-catching achievements of Tencent's overseas strategy.
As the only short video platform in China that can create a stir in overseas markets, Tengda’s interest in Wenxue Network is no less than that of Kuaishou.
Even worse than that!
After all, such a springboard to overseas markets is too tempting for Tenda!
When Tenda noticed the company Wenxue Network, it naturally met an old acquaintance who seemed to be everywhere.
Hey, it’s you again, Dongsheng Investment/Zhou Dongsheng!
