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Text | Photon Planet

In 2020, both ByteDance and Baidu saw the trend of short dramas.

Due to internal disdain and lack of resource investment, the progress of Baidu's short drama business has been intermittent. For example, Baijiahao once launched the "Breaking Shell Plan" to incubate micro-short drama content.

At almost the same time, Douyin also noticed the content tension and commercial imagination of Kuaishou's short dramas.

An insider told Photon Planet that in the second half of 2020, Douyin established a short drama team. On the one hand, it recruited Kuaishou short drama employees with the aim of forming a standardized operating procedure (SOP); on the other hand, it paid close attention to every short drama of Kuaishou. As long as the producer was revealed, the team would take screenshots, use Qichacha to query the industrial and commercial information, and call Jianlian.

The above-mentioned person said, "The short drama circle is very small. We let the interns make phone calls one by one. As long as we can get one MCN agency, we can get the whole circle."

Douyin's "sincere" move left no reason for MCN agencies to refuse. For MCN agencies that have just started to make short dramas, Douyin not only has abundant traffic, but more importantly, the platform will actively promote the series, make it a hot search, and do publicity. "Douyin is a sweet dew," an MCN agency described it this way.

An insider told Photon Planet that as of now, the monthly active users of Douyin short dramas are between 50 and 60 million, while Kuaishou's is one-fifth of that. Baidu has no data to disclose at this time.

Douyin has explored a content direction that fits its own tone and has taken a commercialization path that is different from Kuaishou, which has objectively accelerated the productization of short dramas.

The exploration of Douyin and Kuaishou has greatly expanded the imagination of short dramas. Today, Alibaba, Tencent, Meituan, and Baidu have all intervened in different ways. Short dramas are essentially a new form of content that can not only increase the user time on the platform and establish an immersive consumption scenario, but also realize the content transformation of tool applications to a certain extent.

Different giants have different core businesses, and their decision-making and execution vary greatly, which has led to a flourishing short drama market.

Free vs. Paid?

At an annual meeting at the end of last year, Robin Li said out of the blue, "I think Baidu and short dramas are a good match. Why don't we have them?" So an emergency project was set up internally to re-enter the short drama industry.

The general background of Baidu's involvement in short dramas is the resignation of Song Jian and the appointment of Li Xiaowan. The personnel changes reflect the shift of Baidu's content ecology from focusing on supply to focusing on demand, and short dramas are one of the manifestations of this transformation.

An industry insider believes that Baidu already has a mobile ecosystem that can "eat" the traffic of this round of short dramas. Therefore, Li Yanhong's idea that Baidu should have its own short dramas is obviously impeccable.

The above-mentioned person pointed out that "Tik Tok short dramas are becoming more and more refined and customized, and they also need to cater to the themes of the times, which leaves room for other giants to enter the market." Another person familiar with the matter mentioned that the relatively low-end traffic and user portrait (40 years old +) of Baidu's main site is one of the target groups for low-end short dramas, and Baidu's existing operating strategy is also compatible with it.

"Agriculture, rural areas and farmers, fortune-telling, and square dancing" have always been the three major traffic areas of Baidu's main site, especially the ROI of "fortune-telling" related content is the highest among other vertical categories. The commercial value of middle-aged and elderly users is objectively there, and Baidu's original idea of ​​introducing short dramas may be to fill in the content.

Although Robin Li did not directly mention short dramas in his OKR for the first quarter of this year, short dramas appeared as the third KR of O1 in the OKR for the first quarter of this year by He Junjie, Baidu's senior vice president and head of MEG: [Baidu APP]: Seize the opportunity of the Spring Festival, run through the distribution and user-increasing channels of short dramas, form the perception of Baidu watching dramas, complete the logical reconstruction of user-increasing new users, achieve DAU of xxx billion, and outperform the market in terms of duration growth (aggressive type).

The top level attaches great importance to it and has been aligned from top to bottom. Baidu operates short dramas according to vertical categories and promotes them in a special form. It is understood that the support level of this project is very high. Not only are the R&D, product, and operation employees drawn from various departments, but their first key goal (O1) will also write the key results (KR) of the short drama.

"Vertical category + special project" can theoretically gather the elite of Baidu MEG and realize business productization in a short period of time, but the actual situation has gone to the other extreme.

For example, they get the UID (user identity certificate) of the person in charge and output content that caters to the leader's preferences. Before April, Baidu App did not even provide any entry for short dramas. It was "random" to see Baidu short dramas on Haokan Video.

So far, Baidu has not yet completely opened up the distribution path for short dramas internally. The Baidu App provides a direct search entrance and a secondary entrance (the bottom sidebar "Video"-Short Drama) for short dramas, but users can hardly find Baidu short dramas when watching short videos.

This product logic is not friendly to Baidu short dramas, which need to build user minds. After all, it is difficult for users to access short dramas by scrolling through videos. In addition, Baidu Express does not currently have a secondary entrance for short dramas, which shows that Baidu still seems to have not found the position of short dramas in its own content ecosystem.

The left picture is the search entrance, and the right picture is the good-looking video entrance

Photon Planet learned that Baidu's short dramas are benchmarked against Douyin and Kuaishou, and the specific operation strategy has experienced many fluctuations, and the direction is adjusted almost every quarter. In terms of business model, it changed from paid at the beginning to free, and then to paid again in the second quarter. In terms of content operation, Song Jian wanted to imitate Bilibili during his time, but later completely changed to the C-end operation logic.

The reason is that Baidu users are less willing to pay. When all businesses are under pressure to meet profit targets and do not receive budget support, the paid model will obviously help ease the pressure. However, in reality, the free model seems to be the most suitable for Baidu's content ecology.

"Free and paid are two completely different business models," an industry insider believes that the free model is actually a medium with scenarios that pursues monetization; the paid model has higher production costs and requires a paid scale.

For giants, frequently adjusting direction does more harm than good. Not only will organizational inertia distort actions, but it will also make it difficult for MCNs to adapt.

Whether it is self-made or distributed, MCN organizations are the most important link in short dramas, and platforms need to establish a healthy interaction with them. Baidu Short Drama has frequently changed its commercialization model in a short period of time, which has caused some MCN organizations to complain.

"Strong distribution" requires high data

As mentioned earlier, due to differences in business and organizational structures, the current short drama business presents a different look.

For content platforms such as Douyin and Kuaishou, short dramas are both content supply and another content marketing medium. We can roughly understand them as "content advertising pro" and "series mini". The business model of the former can be simply summarized as content is a means and monetization is the goal. The business model of the latter is to use content payment as a means and content is the goal.

In other giant ecosystems, the production methods and functions of short dramas are different. Take Alibaba Entertainment as an example. The operation and positioning of its short dramas are very different from those of Douyin and Kuaishou.

Alibaba Entertainment has its own film and television resources. It either customizes short dramas through Youku or purchases them internally. The production method of internal purchases is closer to online movies, that is, Alibaba Entertainment has many production teams from Mango TV and CCTV, which exist in the name of studios. The KPI of the studio is to create a script. When the script is created, actors and investors are recruited.

After completing the above actions, there will be further linkage.

"Any new business of Alibaba will start to link up with other businesses of the group after the business cycle is completed." An insider mentioned that this requires the short drama team to do second-party resources first, and then apply for third-party resources after they understand it. "Internally, ratings and funding will be made based on SAB, which is more like internal entrepreneurship."

The above process makes Alibaba's short dramas highly interactive with other businesses, and the business model is closer to customized dramas.

Since May 10, Alibaba's short dramas have been linked with Ele.me in the "Heart-warming Gift" series, testing the waters of instant retail + short dramas, aiming to strengthen users' minds about Ele.me's instant retail. For example, the "True and False Daughter" trilogy was launched from May 10 to 12, in line with Mother's Day, and the "CEO's Wife Becomes a Cute Baby" trilogy was launched from May 25 to May 30, in line with Children's Day.

Judging from the linkage between short dramas and instant retail alone, there is both Ele.me brand implantation (such as "The True and False Daughter") and considerations of content stimulating product consumption (such as Wall's ice cream in "The President's Wife Becomes a Cute Baby").

The format of Meituan's short dramas is similar to that of Ele.me, except that Meituan's short dramas are not self-produced, but all are purchased from outside. The logic behind launching these short dramas is similar to the logic behind launching short videos earlier, which is to fill in the content and retain the duration.

Despite the success of Douyin, Kuaishou, Alibaba and Meituan, Baidu's positioning for short dramas is still unclear.

Photon Planet learned that Baidu tried to make its own content last year. Song Jian, the former general manager of Baidu's content ecology, conducted a "field investigation" and denied this path after returning. After Song Jian stepped down and Li Xiaowan took over, Baidu shifted from strong supply to strong operation. The short drama strategy changed to either outsourcing from suppliers or introducing MCNs and letting them operate on their behalf, and Baidu only did "distribution" to the C-end.

This consideration obviously has realistic factors. In the context of reducing costs and increasing efficiency, each business department has to tighten spending, and the investment in short dramas is relatively limited, and it is impossible to afford the cost and cycle of self-production. In addition, Li Xiaowan made drastic adjustments during her tenure, switching the entire operation logic from the B-end to the C-end, thus allowing Baidu's content ecosystem to return to growth.

There is another example of the strong distribution logic: Baidu's current short dramas are almost all "inventory" products that were previously launched by Douyin and Kuaishou. In other words, Baidu is actually acting as a "distribution channel" and re-selling the short dramas of Douyin and Kuaishou.

So far, we have not seen Baidu launch any new self-made or exclusive short dramas. An MCN agency said that Baidu launched so many "Douyin and Kuaishou inventory" short dramas, largely due to funding constraints. "Everyone is watching Baidu, or the number one position, to see how determined and stamina Baidu has to make short dramas."

Content or ROI?

Whether it is free or paid, with or without revenue sharing, the platform will never suffer a loss.

Many MCN agencies engaged in short videos said that short dramas are currently heavily dependent on investment, resulting in very low income for producers. An MCN agency had many hit short dramas at the beginning of this year. Although the specific amount was not disclosed, he mentioned that based on the 10 million turnover, the platform would take a part of the income, and most of the rest would be used for investment, and less than 10% would fall into his pocket in the end.

"According to calculations, the actual conversion rate is only about 1.1%, and paid investment is almost a must. If natural investment is essentially contrary to the logic of fast-in and fast-out of short dramas, no one wants to make a drama, and they have to make friends with time."

For MCN agencies, the higher costs for contractors have further squeezed their profits.

A short drama producer said that this year's short dramas have changed in three directions. Cute babies and female themes have become popular. The second change is that from last year's quantity, they have begun to pursue quality. For example, the scale of filming staff has been expanded, and the scene control has become closer to online movies. The cost of actors has also risen. Take Zhengzhou as an example. Last year, the daily salary of the protagonist was around 2,000 yuan, but now it has risen to 3,000 yuan/day.

Although the producers of short dramas have many complaints about the platforms, they all admit that the platforms get a share of the profits. And this year, as many non-content giants began to outsource short dramas, the short drama market has ushered in another round of prosperity.

The only surprise is the attitude of MCN agencies towards Baidu. After going through the paid-for-free back and forth, they are somewhat at a loss. If it is the logic of strong distribution, it is a successful path. After all, the paid dramas of Douyin and Kuaishou have made MCN, drama producers, and investors only able to drink soup, while the distribution model allows players in the industry chain to earn more income.

However, this requires Baidu Short Dramas to continue to grow at the data level after establishing user minds. Only this kind of distribution can truly allow the short drama industry to see value.