At this moment, Wang Yi received a call from Ye Changpeng:
"Chairman, when 'The Cliff' first aired, there were no brands advertising yet; it was all Xingyi Technology's own promotion. After it became a huge hit, many major brands rushed to secure title sponsorship and place advertisements."
"As per your request, the title sponsorship for the forty episodes of 'The Cliff' was given to Yanghe and Crest, six million each. Interstitial ads, pause ads, and others were given to major brands like BYD and Clear. All advertising revenue combined totals 21 million."
Wang Yi was very satisfied:
"Very good. These advertisements are largely consistent with 'The Cliff''s audience. The advertisers won't lose money, and we've already recouped our investment."
The copyright for "The Cliff" was only 20 million.
After its viewership exploded, the advertising fees alone recouped the investment.
Other new membership fee income, subsequent copyright income, and future advertising income are all pure profit!
Massive profit!
Ye Changpeng continued:
"Now 'Beijing Love Story' has also become popular. Today, some brands are rushing to get title sponsorship. The highest bidder is Zhenlian.com, offering 12 million for the forty episodes. Naobaijin offered 11.8 million. Head & Shoulders offered 11 million. Lancôme offered 11 million. What do you think..."
"Give it to Head & Shoulders and Lancôme!"
Wang Yi said decisively.
"Ah? Aren't Zhenlian.com and Naobaijin offering more..."
Ye Changpeng was somewhat incredulous.
Together, they offered a full 1.8 million more!
Wang Yi said solemnly:
"Changpeng, when choosing advertisers, you must pay attention to their impact and integrity. Earning a little less is fine; we need to have a clear conscience. Otherwise, wouldn't we become like those people who profit from others' misfortunes? You know what's up with Zhenlian.com and Naobaijin, don't you?"
"I understand, Chairman."
Ye Changpeng suddenly realized:
"Also, other advertisers include Lanxiang Excavator, New Oriental Chef, NICE, Head & Shoulders..."
"Give them to NICE and Head & Shoulders! In the future, you don't need to ask me about such issues. One principle: the product must be reliable, the brand must be reliable, and the image must also be reliable!"
Wang Yi didn't want Xingyi Video's advertisements to constantly be about compound fertilizers, excavators, hair salons...
"Alright, Chairman. With this, the advertising revenue for 'Beijing Love Story' will reach 37 million."
"Good."
Wang Yi nodded. Although it hasn't fully recouped the investment yet, it's close.
After all, these are just advertisements for the first month of broadcasting; there will be other advertising revenue later.
And with hundreds of millions in new membership revenue, there's no way it won't be profitable!
The significance of the film and television entertainment business primarily lies in three points.
First, to increase exposure for Xingyi Technology's products, boost sales, and generate profit.
Thanks to Xingyi Video, Xingyi Music, and Xingyi Media, hundreds of millions of users have noticed Xingyi Technology and have either purchased or are considering purchasing products like Xingyi Technology's xphone 1 and x buds.
Second, to generate revenue and profit through IP rights, advertising, membership fees, etc.
This allows Wang Yi to invest more capital into the research and development of high-end projects such as semiconductors, big data, cloud computing, and AI!
Third, the film and television entertainment business can enhance Xingyi Technology's brand awareness and cultivate a fan and user base!
Whether it's Apple or Xiaomi, none can do without a fan economy.
As long as the fans are there, it doesn't matter if a product fails or if a strategy goes awry.
Hundreds of millions of fans and users are a solid foundation, a reliance for a comeback.
In his previous life, Kirin made its comeback, and satellite communication broke new ground.
Countless fans were excited and rushed to buy, directly selling out the new devices!
This is the power of fans.
Similarly, Xingyi Technology also needs a large number of fans and users to firmly support it.
Only in this way can it endure for a long time.
It's just that each brand has a different way of attracting fans.
For example, Xiaomi focuses on cost-effectiveness, a strategy that works everywhere.
Smartphones cost three to five thousand? Mine is 1999!
Laser TVs cost thirty to fifty thousand? Mine is 14999!
Air purifiers cost several thousand? Mine is 999!
Fitness trackers cost several hundred? Mine is 99!
...
With these moves, how could Xiaomi not attract fans?
HW's way of attracting fans, on the other hand, is through massive investment, diligent R&D, and tackling challenges head-on!
For leading foreign technologies, I invest heavily in R&D to catch up and surpass them!
Step by step, breaking through one high-end technology after another, shattering one international monopoly after another!
With such integrity and spirit, how could it not attract fans?
Especially the older generation, who suffered enough, were constantly held back, and forced to buy their monopolized products at ten times the price!
For example, when Wang Yi was a child, in the early nineties, the initial installation fee for a landline phone was four thousand yuan!
That's right, four thousand yuan in the nineties, what does that mean?
Is it equivalent to tens of thousands today? Or hundreds of thousands?
As for the reason, it wasn't because the operators were too unscrupulous or charged too much.
Instead, there was something called a switch, which we couldn't make ourselves back then, so we could only buy foreign brands.
How expensive were the switches from foreign companies?
200,000 RMB per unit!
One line cost five hundred US dollars, which was four thousand RMB according to the exchange rate at the time!
It was outright robbery!
Was such a high price due to high equipment costs for the switch?
Of course not, the material cost of a switch was very low.
Was it because the technology was too cutting-edge? Too advanced?
No, switch technology was already mature and decades old; it couldn't be considered advanced.
The reason it sold for so much was simply because we couldn't make it.
Even if foreign companies sold it to us at ten times the price, we could only bite the bullet and buy it!
At that time, the domestic market was carved up by eight devices from seven countries, all sold at high prices!
It wasn't until HW developed the C&C08 switch, commonly known as the 08 machine in the industry, that it completely broke the blockade with its excellent performance.
From then on, the price of switches began to plummet rapidly.
It dropped from 200,000 to 100,000, then 50,000, and finally 10,000. Later, most of those foreign brands went out of business...
And the installation fee for landlines also dropped from four thousand, to one thousand, then five hundred, one hundred, and finally, installation was free, and they even gave away rice and oil!
Wang Yi was deeply impressed by this.
He remembered his parents saying that someone's landline installation cost four thousand when he was a child, and he also remembered someone else's costing one thousand, and that his own family's landline cost five hundred.
And later, his childhood friend's family in his hometown got free installation, and even received rice and oil!
The young Wang Yi at the time only found it interesting, but it wasn't until later that he understood that behind all this was a contest between foreign enterprise monopolies and independent research and development!
If HW hadn't broken through the foreign enterprise blockade, mass-produced the 08 machine, and driven down the price of switches, Wang Yi's family wouldn't have been able to afford a phone!
However, switches were just a microcosm.
The situation where foreign companies used monopolistic technology to charge ten times the price was not just limited to landlines, but was prevalent in many aspects.
Those born in the 90s and 00s don't know much about this, but those born in the 60s, 70s, and even 80s are very clear.
Especially those born in the 60s and 70s, who were repeatedly exploited by foreign companies using monopolistic technologies and felt a lot of suppressed anger.
Later, they watched the Flower factory rapidly develop, breaking one monopoly after another all by itself.
Breaking through one blockade after another, achieving domestic production.
How could they not be passionate?
How could it not attract fans?
In the hearts of these people, the Flower factory is high-end.
Much more superior than the Kidney phone.
It is precisely because of this that many people have given up their Kidney phones.
As for the so-called chip manufacturing process, benchmarks?
Too narrow-minded!
They don't care about these things.
They only remember the past pain and helplessness!
They only remember who broke these blocked technologies, caught up, and surpassed!
They only remember that only self-developed is truly one's own!
Relying on imports only leads to being stuck.
In their eyes, the Mi factory only broke the selling price.
But HW broke technological blockades and monopolies!
It is precisely because HW achieved what other companies could not.
It broke monopolies that other companies couldn't break.
Only then could it become a truly high-end brand, and only then did it gain a large number of fans!
Similarly, for Xingyi phones to truly be high-end and to fully expand, they must also continuously invest in R&D breakthroughs. Only then can they become a truly high-end brand!
However, all technology is built with money.
Like HW, with so much output, so many breakthroughs, so many industry firsts.
Behind it are tens of billions, even hundreds of billions, in R&D investment every year!
In 2011, R&D investment reached 23.7 billion, and it is estimated to be 30 billion in 2012!
Ten years later, annual R&D investment would exceed 160 billion!
Similarly, for Wang Yi to diligently pursue R&D, he currently needs an annual R&D investment of 20 to 30 billion.
In the future, annual R&D investment will also need to be one to two hundred billion.
What's more, Wang Yi goes even further: he not only plans for semiconductor chip R&D and design but also for wafer fabs and chip manufacturing.
With Elder Hu's addition, Xingyi Wafer Fab is bound to develop rapidly, which also means burning money rapidly!
The investment for a single wafer fab alone would be 20 billion.
Adding other R&D investments, 30 to 40 billion would not be enough for the entire year of 2012.
Earning money solely by selling phones and clothing is simply not enough.
Wang Yi will not let go of fast and sustainable money-making methods like film and television entertainment.
For example, Xingyi Video had "Beijing Love Story," a show not initially favored due to its new director and actors, costing a total of 40 million for permanent satellite TV rights + permanent online rights.
As a result, as soon as "Beijing Love Story" was released, it not only achieved a 1.008 viewership rating on Jiangsu & Zhejiang TV, winning the top spot,
but also generated over 600,000 new members on the Xingyi Video platform.
This momentum is even more formidable than that of "The Cliff" before it!
Younger people are still more receptive to online platforms, which is why "Beijing Love Story" has attracted more new members.
Currently, Xingyi Video's monthly paying members have surpassed 7 million, which, calculated at 15 yuan per person, totals 105 million.
Don't forget, this is only the first ten days of the month!
As time goes on, "Beijing Love Story" will bring in even more new members!
"The Cliff" will also continue to see an increase in new members.
Coupled with tens of millions from title sponsorships, interstitial ads, and pause ads, as well as subsequent copyright sales, these two dramas are likely to bring Wang Yi several hundred million in revenue.
Two dramas bought for 60 million, a huge profit!
Net profit will be in the hundreds of millions.
More importantly, once members develop a habit and fully recognize Xingyi Video, many will enable auto-renewal or purchase annual memberships.
In a few years, if Xingyi Video's average monthly paying members reach 100 million, that's over 10 billion in membership revenue annually.
Adding the annual memberships gifted with Xingyi phones, each valued at 100 yuan and included in the selling price, with tens of millions sold annually, that's another several billion.
When memberships expire in the second year, these users, already accustomed to VIP treatment, will likely continue to renew!
Calculated this way, in a few years, Xingyi Video's membership fees alone could contribute tens of billions.
Xingyi Music is in a similar situation.
Other platforms suffer losses mostly due to excessively high costs for acquiring dramas. Dramas bought at high prices often flop, resulting in few new members, insufficient income, and annual losses.
But as a reborn individual, Wang Yi knows which dramas will be blockbusters and which will flop.
He can prioritize quality over quantity and only buy blockbusters!
Ensuring that every drama acquired becomes a big hit and makes money means there's no way to lose.
Like "The Cliff" and "Beijing Love Story," whose copyrights were bought for tens of millions, viewership exploded, and title sponsorship and advertising fees almost broke even.
Subsequent copyright revenue from selling to satellite TV and new membership income are pure profit!
Earning several hundred million from these two dramas is not an issue.
And self-produced dramas, self-produced animations, and self-produced variety shows are all blockbusters and can be extremely profitable.
To put it plainly, for other platforms operating a film and television platform, it's like a closed-book exam where they buy blindly and suffer heavy losses.
For Wang Yi, it's an open-book exam; he only buys blockbusters, making enormous profits!
More importantly, the main reason for current losses in long-form video platforms is the fierce money-burning war among major platforms.
They push up the online copyright prices for TV dramas and variety shows from the current 10-20 million to 100-200 million, 300-500 million, or even 800-900 million!
In a few years, iQiyi's annual content spending reached 20-30 billion, and Tencent Video's reached 70-80 billion!
This is why losses are severe.
If these platforms had any sense and didn't burn so much money or engage in such vicious competition, they could all make countless profits!
As a reborn individual, Wang Yi doesn't need to spend that much money; he starts at a strategic advantage.
Using the least money to earn the most profit, he can become the long-form video hegemon and dominate the industry.
When other competitors have less profit and fewer users, they will no longer continue the insane money-burning war.
If it's profitable and they can be number one, they are willing to burn.
If they can't win and it's not profitable, they will naturally stop early.
With Wang Yi, the future money-burning war among long-form video platforms will not be so brutal; instead, it will end quickly.
At that time, small platforms will quickly exit, major platforms will compete for second place, and Xingyi Video will take first!
It can be said that as long as Xingyi Video and Xingyi Music take off, they will be cash cows, able to make money effortlessly!
In a few years, an annual net profit of tens of billions is entirely possible!
This continuous income can largely become R&D funding, supporting Wang Yi in pursuing semiconductors, big data, cloud computing, and more.
Pressure creates motivation.
The massive R&D funding gap made Wang Yi start frantically raising money.
The funds that can be acquired now are by making "Beijing Love Story" a huge hit. Besides attracting more paying members, the satellite TV rights also need to be sold, and at a high price!
The first round of satellite TV broadcast rights for "The Cliff" was sold to three TV stations, which is saturated and won't sell quickly in the short term.
But "Beijing Love Story," not being favored, only sold to one satellite TV station for its first round of broadcast, with only one station exclusively airing it. Later, it can be sold to several more.
Coupled with the explosion in viewership ratings, it's likely that TV stations will contact them soon.
Wang Yi remembered that "Beijing Love Story" in his previous life was just like this: only Jiangsu & Zhejiang TV bought the first round, and seeing its viewership explode and take the championship, several other TV stations then scrambled to buy it!
What Wang Yi needs to do now is to build momentum for "Beijing Love Story" so that its satellite TV rights sell for a high price!
With this thought, Wang Yi dialed Ye Changpeng's number:
"President Ye, launch an event called 'Beijing Love Story' Love Story Event! Invite viewers from all over the country to share their love stories by filming VCRs or writing text records, uploading them to the Xingyi Video 'Beijing Love Story' interactive zone, with the chance to win generous rewards."
"One month later, the top-ranked user in terms of popularity will be rewarded with a top-spec xphone 1 valued at 4299. Second and third place will receive a 32GB xphone 1 valued at 3799. Fourth and fifth place will receive a 16GB xphone 1 valued at 3299!
Sixth to tenth place will receive an x buds! Eleventh to twentieth place will receive a Xingyi Video annual membership! Twenty-first to fiftieth place will receive a Xingyi Video quarterly membership. Fifty-first to one hundredth place will receive a Xingyi Video monthly membership!"
"In addition, all users who successfully participate in the sharing event will also get a chance to enter a lucky draw, with opportunities to win celebrity autographs, Xingyi Video memberships, Xingyi Music memberships, a 'Happy Match' game gift package, a 'Defend Pomelos' game gift package, Meiyou consumer vouchers, and more. Offers are limited, first come, first served."
Ye Changpeng's face lit up:
"Chairman, this event, with such generous rewards, will surely greatly motivate users to participate, and also boost the popularity and on-demand viewership of 'Beijing Love Story'!"
Wang Yi nodded:
"More importantly, the more popular 'Beijing Love Story' becomes, the more eager TV stations will be to approach us, and the higher the satellite TV rights will sell!"
"Chairman is brilliant!"
Ye Changpeng's eyes lit up, fully understanding that this was Wang Yi's true intention.
Times create heroes.
Although "Beijing Love Story" exploded in viewership ratings immediately after its broadcast, it wasn't enough; it could be even more explosive and earn even more.
For this, spending a bit of money is well worth it.
"Chairman, I'll arrange a trending topic for this event to drive traffic from Weibo!"
"Good."
Ye Changpeng acted quickly. That evening, "Beijing Love Story" appeared on multiple trending topics.
[Beijing Love Story's viewership rating explodes, taking the championship.]
['Beijing Love Story' and 'The Cliff' crush other popular dramas, Xingyi Video exclusively airs two blockbusters, becoming the biggest winner!]
[Beijing Love Story Love Story Event: Share your story for generous prizes like xphone 1, x buds, celebrity autographs!]
For a drama that is already a huge hit, even a little traffic can make it trend!
In a few days, as the drama's popularity increases, it will trend without needing to buy traffic.
Especially the Love Story Event, which quickly caused a stir:
"Share your love story, enter a lucky draw, and the top 100 also get an xphone 1, x buds, Xingyi Video annual membership, celebrity autographs, game gift packages! This event is amazing!"
"You guys can have everything else, I just want a 32GB xphone 1."
"A 16GB xphone 1 is fine for me!"
"You're too greedy. I'd be thankful if I could get a Xingyi Video annual membership!"
"How hard is it to be in the top 100? I'll just try the lucky draw and see my luck."
"While you were hesitating, I already posted and shared the story of me and her. Ah, youth. I also entered a draw and won a Xingyi Music monthly membership. Not bad, not bad."
"I also posted the diary I wrote earlier, about his story, and I also won a monthly membership."
"I recorded a VCR and won a celebrity autograph."
"Me too, VCR, and got 'Thank you for participating'..."
"This damn event, I can't sleep again tonight. So-and-so, how are you? I f***ing miss you again, damn it!"
"The prizes aren't important; I just hope he can see it, see the words I've never been able to say all these years. Idiot!"
...
More and more users participated in this event.
More and more viewers paid attention to "Beijing Love Story."
Along with it, "Beijing Love Story"'s already chart-topping viewership and online on-demand numbers surged wildly.
However, new viewers couldn't watch the live broadcast of the first few episodes on satellite TV, so they could only switch to Xingyi Video and purchase a membership.
Consequently, Xingyi Video's membership numbers once again surged.
Back in China, Wang Yi was in a great mood looking at the backend data.
In just three days since its premiere, "Beijing Love Story" brought in over 2 million new paying members!
Terrifying, to say the least!
And it's still growing steadily.
There was no other way; viewers couldn't watch the first six episodes live on TV, pirated videos couldn't be found online, and with Xingyi Video being the exclusive broadcaster, they could only get a membership!
Moreover, Xingyi Video had previously offered a free month's membership for signing in, so viewers already had some goodwill, making them less hesitant to sign up now.
As for TV piracy?
TVs in 2011 were still quite rudimentary, with low resolution, so pirated "gunshot" versions had very poor image quality.
More importantly, when it first aired, few expected this drama by a new director and new actors to become popular, so there was no thought of pirating it.
Now that six episodes have aired, pirating it daily would be even more troublesome.
So pirates came up with another method: downloading from Xingyi Video.
However, the downloaded files were all H.265 encoded, which other players couldn't play at all.
There were no transcoding tools available if they wanted to transcode.
Nothing else, H.265 was Xingyi Technology's original new generation decoding method. Let alone pirates, even video giants couldn't handle the transcoding.
Even within Xingyi Technology, only H.264 to H.265 transcoding was launched, not H.265 to H.264!
In desperation, some pirates tried to screen record, but Xingyi Video integrated anti-screen recording and anti-hotlinking features.
Finally, with no other options, pirates could only resort to physical screen recording.
But the quality of physical screen recording was simply too unsatisfactory.
People watch dramas not just for the content, but also for the viewing experience and image quality.
Should they scour for scattered episodes and watch low-quality physical screen recordings, or pay fifteen yuan for a membership to watch high-resolution Blu-ray quality?
Most people would probably choose the latter!
And "The Cliff," after broadcasting for over a week, also saw its new member count exceed 3 million.
Coupled with the exclusively aired annual anime "Xia Lan," which updates weekly, it adds many new members every week.
Currently, Xingyi Video's paying member count has exceeded 10 million.
Even if calculated at 15 yuan for a monthly membership, revenue has exceeded 150 million, not to mention many quarterly and annual members, so total membership revenue has already surpassed 200 million.
This doesn't even include the over 6 million members gifted by Xingyi phones!
Furthermore, advertising and title sponsorships sold for nearly 60 million!
The situation is excellent!
Wang Yi's future development plans also became increasingly clear.
Meiyou clothing is the current cash cow, while large entertainment projects are the future cash cows!
But this is not enough; cosmetics, especially high-end cosmetic products, must also become a new cash cow!
This depends on whether Zhenyou High-end Cosmetics can succeed.
And how long the current cash cow, clothing, can last is also a question.
The "Pure Desire" style won't always be popular, and "Bare Leg Artifacts" won't last forever. Wang Yi can only think ahead and constantly seek new breakthrough strategies.
For example, this summer, launch Hanfu in conjunction with "Nirvana in Fire"!
Subsequent niche but highly profitable categories like JK and Lolita are also worth launching.
But these are also not long-lasting.
For example, when JK was popular, a single item cost hundreds to thousands. A few years later, when it's no longer popular, sales plummet and prices crash.
Clothing is indeed profitable, but it's not sustainable.
Even H&M and Zara from his previous life faced widespread store closures and sharply reduced profits a few years later.
The same goes for other major luxury brands.
Ten years later, when outlet discount stores and PDD become the public's first choice, it will be the Ragnarok of branded clothing.
Even Nike and Adidas shoes, which currently start at four or five hundred, will drop to one or two hundred years later.
Consumption downgrade affects all aspects.
However, sports brands are among the few categories that can achieve sustained profitability.
Even if the profit per item decreases, high sales volume can still lead to huge profits.
Wang Yi fell into contemplation: Meiyou needs to launch a sports brand!
In this field, Nike and Adidas are already deeply entrenched. For Wang Yi, as a rising star, competing will bring considerable pressure.
Therefore, the sports brand cannot just focus on women's wear; men's wear must be included.
Like Nike and Adidas, it should be a comprehensive brand, focusing on athletic apparel and shoes.
In the apparel sector, there are already two major brands, Meiyou and Zhenyou. Wang Yi can at most create one more new brand.
If he were to further divide into men's wear, women's wear, high-end, low-end, and create several more brands... this isn't realistic. Energy and resources are limited.
A single brand requires opening thousands of flagship stores and specialty stores. Having multiple brands would mean tens of thousands of stores, which is too costly and unrealistic.
It's better to create just one comprehensive sports brand, offering both men's and women's wear.
As for the name, it will be Xingyue!
Benchmarking Adidas and Nike, positioned as a high-end sports brand!
With this thought, Wang Yi dialed Chen Chuanqing's number:
"President Chen, recruit some sportswear and athletic shoe designers and product managers to create a brand-new sports brand, Xingyue, for men's and women's athletic shoes and apparel!"
"Alright, Chairman, I know some relevant talents, I'll contact them right away! There are also a few experienced athletic shoe R&D personnel; should we poach them?"
"Excellent, poach them all. Athletic shoes require developing black tech!"
Wang Yi was overjoyed; old President Chen always managed to surprise him.
Athletic shoes and running shoes are different from others; they don't just rely on design, but also on technology.
Shock absorption, breathability, odor prevention, invisible height increase, and so on—all aspects require research and development, constantly pushing technological boundaries!
Wang Yi was making rapid progress, with new business plans and surging video revenue.
Over at iQiyi, they were filled with envy, jealousy, and hatred.
"Damn it, 'The Cliff' and 'Beijing Love Story' both exploded in popularity, plus 'Xia Lan,' the pinnacle of domestic animation—Xingyi Video is truly formidable! Our iQiyi members are all being snatched away by them!"
The chairman was furious, and other executives were also indignant:
"Indeed, after 'Xia Lan' aired, many iQiyi users wanted to switch to Xingyi Video. Once 'The Cliff' was released, they wanted to switch even more, and with 'Beijing Love Story' joining, three blockbusters are airing simultaneously. It's unrealistic for users not to switch."
"With the hottest anime 'Xia Lan,' 'Beijing Love Story' as the #1 viewership drama, and 'The Cliff' as the #2 viewership drama, users who get a Xingyi Video membership can watch three of the hottest blockbusters. If it were me, I wouldn't hesitate; I would choose Xingyi Video!"
"This month, our iQiyi members haven't just stopped growing, they've plummeted."
"Damn Xingyi Video, they've gone too far."
"That Wang Yi guy is too lucky! He just casually bought two dramas, and they both became f***ing hits!"
"The champion and runner-up on the viewership charts in January were both exclusively streamed on Xingyi Video. It's hard for their membership numbers not to skyrocket!"
"And there are no pirated versions online, so you can only get a membership! Precisely because of this, Xingyi Video's new members have already exceeded ten million. Coupled with the millions of members gifted by Xingyi phones, it probably won't be long before they catch up to iQiyi!"
"This won't do; we must suppress Xingyi Video. We absolutely cannot let them continue to grow like this!"
"That's right, we must suppress Xingyi Video!"
"Aren't there no pirated versions? We'll create pirated versions for them!"
(End of Chapter)