Huayu: This producer has no bottom line.

Chapter 31 The Storyteller

Sinosteel International Building, headquarters of Youku.

The meeting room was filled with smoke, and the atmosphere was tense.

"Mr. Gu, if you don't approve the tech department's budget request soon, the server is going to crash!"

A middle-aged man in a plaid shirt, with a receding hairline, suddenly stood up. He was the head of the technical department. "Stop spending money on copyrights! It's a bottomless pit!"

"How can we compete with Tudou and Kuliu without buying the copyright?"

The VP of Content Operations was unyielding, raising his voice even louder, "Sohu has already sued us. Are we all going to starve after all our videos are taken down?"

"Without servers, users can't watch anything due to lag; without content, users simply won't come." The marketing director sat in the middle, shrugging his shoulders, seemingly uncooperative but his words were cutting to the heart. "How about... we cut both budgets in half and use the money for advertising?"

"fart!"

"You're the one talking nonsense!"

The various groups argued heatedly, each unable to convince the others.

Gu Yongqiang, who was sitting in the main seat, remained silent, rubbing his throbbing temples.

Just then, the conference room door was pushed open, and the secretary quickly walked to his side and whispered, "Mr. Gu, the car is downstairs."

Gu Yongqiang suddenly opened his eyes, raised his hand and pressed it down, and the arguing instantly stopped.

"Alright, stop arguing."

Gu Yongqiang stood up, his gaze sweeping over everyone. "The countersuit against Sohu is just a stopgap measure, and buying the copyright is like drinking poison to quench thirst. The focus of today's discussion is not whether or not to buy a drama. Let's all go and listen to what Mr. Ren has to say about the monetization model."

He straightened his suit buttons. "Come on, come with me to the door to greet them."

……

At the same time, on the first floor of the building.

Ren Pingsheng stepped into the elevator, his eyes deep as he watched the red numbers flash by.

The current predicament of domestic video websites is similar to that of YouTube in 07. They started by relying on piracy, which brought them a surge in traffic, but also burdened them with heavy server and bandwidth costs.

In the past, piracy was free. Although it was always losing money, at least it could be used to fool investors with impressive user data.

But that's no longer possible. The threat of copyright enforcement is already at their throats. They have to spend real money to buy copyrights, otherwise they won't even be able to retain their users.

Even more critical is monetization.

Currently, the monetization models of various websites are extremely primitive. Apart from a few annoying banner ads on web pages, even the pre-roll video ads are only just being figured out.

Therefore, they urgently need a sustainable and replicable monetization model, a compelling story that Wall Street savvy individuals can understand and are willing to pay for.

And Ren Pingsheng was the one who came to write the story.

"bite--"

The elevator doors opened on the 5th floor.

Ren Pingsheng stepped out, and Gu Yongqiang, along with several senior executives, greeted him at the front desk.

"Mr. Ren, I've heard so much about you. You're truly a young and promising man." Gu Yongqiang smiled and extended his hand.

"Mr. Gu, you're too kind. Just call me Pingsheng. I'm your junior from the same school."

After a brief exchange of pleasantries, everyone entered the conference room and got straight to the point.

"Mr. Ren, to be honest, we have also studied the two projects you previously managed, but they did not seem to bring any direct improvement to the platform's monetization capabilities, so we would like to ask you for advice in person."

"Is Mr. Gu referring to GG's business?" Ren Pingsheng asked.

“Yes,” a vice president standing next to Gu Yongqiang chimed in, “Our Youku’s GG business is already number one in the industry, and we are also actively developing copyrighted content, and in the future we will become a combination of YouTube and Hulu.”

"A combination of YouTube and Hulu?" Ren Pingsheng laughed.

He shook his head, bluntly shattering the other person's illusions, "Excuse my frankness, but in the current environment in China, both YouTube and Hulu's models are doomed to fail."

The meeting room fell silent for a moment.

"Why?" Gu Yongqiang narrowed his eyes.

"YouTube relies on high-quality UGC content to attract users and make Google advertisers willing to pay for it, but even Google has publicly admitted that it is not yet profitable. Look at what Chinese netizens are uploading now? Blurry selfies, poorly made parodies, brands simply are unwilling to pay Google for this kind of content."

"As for Hulu, they're backed by two media giants, NBC and FOX, so they don't need to spend money on content. What about you?"

"Moreover, the habit of paying for content has not yet been established among domestic users. You spend a lot of money to buy TV dramas, but you can only force-feed them with clips. However, domestic users have a very low tolerance for clips. They will curse if the clip is too long. In the end, the copyright fees keep getting higher and higher, and the cost of clips is just a drop in the bucket, which directly drags down the financial chain."

Everyone was speechless. Wasn't this the root cause of his argument just now?

Gu Yongqiang took a deep breath. "Mr. Ren sees things very clearly. So, the monetization model you mentioned, are you referring to this new drama you have? How is that any different from us spending money to buy other movies and TV series?"

"The difference lies in the underlying logic."

Ren Pingsheng was waiting for this statement: "Whether it's a movie, a TV series, or an online short film, the format has never been the key to monetization."

"The key is what kind of content you sell, in what way, to what kind of people."

Everyone was completely confused.

"To put it another way," Ren Pingsheng looked around, "the current Youku is like a shopping mall with no planning. The mall is full of goods, and when customers come in, they either wander around aimlessly or go straight for a specific product. It does not guide customers' consumption behavior at all, nor does it empower the sales of products."

"You can't even collect rent. The only way to monetize is to hang a few 'GG' signs on the outside of the mall to block the way. After users finally load the video, they have to watch 15 seconds of 'GG'. The quality of the video after that depends entirely on a lottery."

He paused, then asked, "How can a shopping mall like this make money?"

Some people's lips twitched, as if they wanted to refute, but they couldn't find a point to make.

"Mr. Ren," Gu Yongyong said, leaning back in his chair, "Now that the logic is clear, how do we resolve this?"

"Take 'Wanwan' as an example. It was a promotional drama series for 'Tianlong,' and the core user group of 'Tianlong' is men aged 15 to 30. Therefore, the audience for the plot of 'Wanwan' also had to be men aged 15 to 30. Then I designed the game elements into plot elements, replacing the boring CGGG with good-looking short stories, and released them on the Internet, a channel that is extremely easy to spread. This is called selling good content to the people who need it in a suitable way."

To put it bluntly, it's essentially a human version of the later-era information feed platform, and its operational mindset is very similar to that of short videos.

"As a result, Changyou paid a cooperation fee for this. I can't say the exact amount, but the average customer acquisition cost was less than three yuan, which is one-tenth of their traditional channel investment. So they can't wait to continue investing in the second quarter."

"This is just the B2B side; we can also make money from the B2C side."

The meeting room was completely silent.

Gu Yongqiang's eyes grew brighter and brighter. He finally understood why Changyou and Xishanju had successively sought out Ren Pingsheng to film customized dramas.

But the vice president who had previously questioned Ren Pingsheng couldn't sit still any longer, "Mr. Ren, you're talking about the C-end? Your 'Wanwan' and 'Diaosi' games haven't earned a single penny from users."

Upon hearing this, everyone looked at Ren Pingsheng.

Ren Pingsheng looked at the man with a playful expression, "Why should a lowly laborer like me work so hard?"

After a two-second silence, laughter erupted in the conference room.

The vice president laughed the loudest, shaking his head as he laughed. He finally understood: it wasn't that Ren Pingsheng couldn't make money, but that he had never had the motivation to make money before.

Gu Yongqiang laughed along, and after laughing, he leaned forward with a curious expression.

"So, what exactly is the method by which you manage to make money from Chinese netizens?"

"Brother Koo," Ren Pingsheng picked up his teacup and took a sip, "you're trying to get something for nothing, aren't you?"

Gu Yongqiang paused for a moment, then laughed, slapped the table, stood up, walked to Ren Pingsheng, and extended his hand.

"Then I wish us a pleasant cooperation?"