The battle between iQiyi and Hongguo: The short drama is far from over

author| Lin Kankan, the pioneer of entertainment 

On February 20, at the first China TV drama production industry conference, Gong Yu, founder and CEO of iQiyi, criticized the signing of an exclusive agreement with the production company for Hongguo short drama, which would inhibit the development of the industry.

In response, the Hongguo short drama did not make a positive response. Later, Le Li, editor-in-chief of Hongguo Short Drama, mentioned in his speech that day that Hongguo has various and flexible cooperation models. In 2024, Hongguo will provide the largest content budget to the entire short drama industry as a single platform, promoting Healthy development of the industry.

As a long-term video boss, Gong Yu targeted Hongguo. Behind this actually lies the era of traffic migration, the short drama’s big fish and dangerous reefs.

Is he still the exclusive in row 01?

Gong Yu’s doubts about Hongguo short dramas are rooted in whether Hongguo is exclusive.

Interestingly, at the conference that day, You Xiaogang, honorary president of the China Association for Construction and Chairman of Beijing Kyoto Century Cultural Development Co., Ltd., also talked about the so-called exclusive view: Gong Yu also said just now that there is no exclusivity, but in fact, all platforms are exclusive. Our TV stations are centralized, and our audio-visual platforms are also centralized. Everyone makes their own decisions based on the content of the work and the healthy production of blooming flowers.& rdquo;

This speech also pointed out the core of platform operation and competition. In an era when content is king, whether it is the film and television industry or the music industry, to some extent, all platforms are exclusive, and high-quality content will naturally be competed for by various parties or even deeply bundled.

Gong Yu accused Hongguo of signing the so-called exclusive agreement with the copyright party, which is actually an exclusive agreement for universal play in the content industry. That is, long-term video platforms often purchase exclusive content during the development process, including long-term and packaged cooperation, including Aiyoutengmang.

As an outstanding player, iQiyi is a veteran player of exclusive content.

For example, in 2016, iQiyi announced that it had reached a cooperation with 20th Century Fox Films to obtain exclusive online rights for all Fox’s new films in China in the next few years based on the cooperation with existing film libraries; in 2018, iQiyi cooperated exclusively with the American production and distribution company FilmNation, and in the next three years, it will give priority to obtaining exclusive online rights for films produced or represented by FilmNation in the mainland of China; In 2022, iQiyi and Straw Bear Entertainment entered into a framework agreement for the purchase of more than 1.3 billion yuan drama copyright and a contract for the production of nearly 2.5 billion yuan customized drama.

It is not difficult to find that these agreements include not only cooperation on copyright content, but also reservations on future production capacity. However, in the final analysis, the platform relies on competitive advantages such as resources and channels to complete the advance layout of high-quality content on the market.

From a realistic perspective, the short drama industry is more about customized dramas and copyrighted dramas, that is, funded by the platform, or even authorized IP, which is handed over to the production company for production, and owns the copyright of the drama. This is common sense. Therefore, the exclusive agreement mentioned by iQiyi Gong Yu has a bug, and the platform’s own copyright content is naturally exclusive.

In addition, iQiyi’s micro-short drama cooperation is essentially the same as the cooperation model in the short drama industry, that is, it pre-targets the entire production capacity of high-quality producers in the future based on a more attractive debt-sharing strategy.

As shown in the figure below, iQiyi also buys a large number of exclusive dramas that have been exclusively broadcast around the world for more than 10 years. These dramas obviously cannot be broadcast on Tencent Video, Youku, Hongguo and other platforms.

According to the observation of Entertainment and Entertainment Herald, the micro-drama industry is undergoing a period of drastic changes, and the 20th rule will become more obvious this year. This is actually a great challenge for small and medium-sized production companies that lack resources and traffic. From the perspective of a production company, signing an exclusive agreement with the platform is actually a mutually beneficial matter. It can not only lock in a long-term stable guaranteed income, but also continue to obtain additional sub-account income.

From a platform perspective, high-quality exclusive content can also help the platform retain users, forming a virtuous cycle. Aiyou Tengman has long relied on exclusive high-quality content to drive the growth of VIP members.

You cannot only allow long-term video platforms to eat meat, and short drama platforms are not allowed to drink soup.

02 The short drama market is far from the end

From this incident, we can see that we can also see changes in the pattern of the long and short drama market, and the balance has begun to tilt. But the two are not opposed, but can coexist.

Gong Yu’s face-to-face posting is actually a reflection of iQiyi and long videos. This can be seen from iQiyi’s declining financial report in 2024. Annual revenue was 29.23 billion yuan, down 8% year-on-year. In the fourth quarter of 2024, member service revenue was 4.10 billion yuan, down 15% year-on-year.

Gong Yu made it clear in his financial report that the market size of micro-short dramas may exceed the box office of movies in China, and iQiyi urgently needs to make up for the growth bottleneck of its long-term video business through layout in this field. As a latecomer, iQiyi’s top priority is naturally to reserve enough high-quality short dramas and create a moat for content.

Of course, not only iQiyi, but also other long-term video platforms have increased their efforts in the field of short dramas. They cannot avoid a close confrontation with Hongguo in the copyright market. It will take time to catch up.

However, after all, the short drama industry has only begun to surge in the past two years and is not monolithic.

According to the “QuestMobile 2024 Panorama Ecological Traffic Annual Report”, among the top 10 monthly users of online video apps in December 2024, the monthly activities of Hongguo short dramas were 158 million, and the monthly activities of Tencent Video, iQiyi, Mango TV and Youku were 387 million, 354 million, 277 million and 184 million respectively. Four of the top five monthly activities are still firmly occupied by long video platforms; Although Hongguo is in the lead among short drama platforms, there is still a big gap compared with long video platforms.

At the same time, in addition to vertical platforms such as Hippo Theater, major Internet giants are laying out short drama tracks. For example, there are free short drama channels where cross-border players compete for more, the short drama sections of Baidu and Meituan, Huawei short drama collection that wins with hardware, and the fast-handed star short drama that competes with Douyin. The short drama market is crowded and crowded. I really don’t know who will laugh last.

The reason why red fruit short dramas have grown rapidly is that they have stepped on the transition node of the short drama industry from pay-led to free-led in the past year, and have accurately targeted the needs with free drama watching + advertising sharing, and subsequently passed the sharing of accounts. Model innovation, as well as support plans such as fruit burning plans and creator support plans, have promoted the generalization of categories and quality upgrades of short dramas.

Take Hongguo’s martial arts short drama “The Sword of the Trader 24”, which was launched during the Spring Festival at a cost of 2.2 million yuan, as an example. Director Yu Honglin mentioned in an interview that it was precisely because Rubik’s Cube Film and Television signed a cooperation agreement with Hongguo that Hongguo was willing to give a part of the guaranteed fee, which reduced the cost pressure on the producers, which was the direct reason for them to make the decision (shooting).

“If there is only pure payment, we are too risky. After reaching a minimum guarantee cooperation with Hongguo, the risks will be reduced a little and we can give it a shot.” rdquo; It is precisely because of Hong Guo’s guarantee that Rubik’s Cube Film and Television can produce high-quality short dramas regardless of cost.

In a word, there is no hegemony in the short drama industry, only popular movies take turns.

Audiences will only follow good content, not bind to a certain platform. Only high-quality content is the magic weapon to win. For example, the hit drama “Unparalleled” is distributed on multiple platforms, but it does not prevent its phenomenal popularity.

conclusion

At present, although the short drama market is hot, it is still in a growing stage compared to long videos. All major platforms are increasing their investment in original content, and Hongguo has only seized an opportunity.

The real crisis in the short drama industry has never been the agreement of a certain platform, but the proliferation of inferior content, lack of copyright protection and the imbalance of creator income. Platform competition should focus on content quality, rather than simply competing in quantity and channels. In the future, the focus should be on protecting copyright while stimulating innovation, so that creators can get due rewards and create a situation where a hundred flowers bloom, so that the short drama industry can be bigger and stronger.

The Jianghu of short dramas can accommodate both red fruits and iQiyi. After all, users will always choose good content and pay for it.