What is the logic behind Xiaomi’s 1.8 billion investment in iQiyi?


In April 2010, the millet technology gathered by masters was formally established and the Fantastic Art (later changed its name to iQiyi) was formally launched. In the blink of an eye four years later, IDC and Strategy Analytics released the third quarter survey report of the global smart phone market. Xiaomi’s mobile phone shipments and market share ranked third in the world, followed by Samsung and Apple; iQiyi was In the video industry, he took a bloody road and alternated with Youku Tudou for the "throne" of the domestic video leader.

Of course, the ambitions of Xiaomi and Iqiyi are not only so, but they have very different paths in the layout of the ecological chain. Xiaomi’s injection of RMB 1.8 billion worth of Qiyi can be seen as the intersection of Xiaomi and iQiyi’s road leading to Kangzhuang Avenue. Like all the cooperation, Xiaomi and Iqiyi are just taking what they need.

Since 2013, Xiaomi has launched products such as Xiaomi Piston Headphones and Xiaomi Mobile Power, which have sounded the clarion call of ecological layout. On November 19, Lei Jun publicly stated at the World Internet Conference that Xiaomi has reached 25 partners in the hardware field. At the same time, Mai Waidi, a phone helper and other software partners emerged one by one. Recounting the two investments that just took office as Chen Hao, the blueprint for the ecological layout of hardware, software, and content is vivid.

Xiaomi’s strategy is to first stop the “mountain head” of the hardware terminal, build an ecological skeleton with hardware, and then fill in software and content. With millet boxes and television shipments rising steadily today, content integration and operations have become the most concern for Xiaomi and the core breakthrough point of the business model. In Lei Jun’s words, “The user is going home to watch the content. This is a matter of life and death for the millet TV, mobile phone, and tablet.”

There are still controversies about whether Youku Tudou and iQiyi are the bosses of the video industry, but iQiyi’s investment in the video field is definitely ranked first. Not only did the company purchase a lot of exclusive video copyrights, but PGC also made frequent moves. In April of this year, Gao Xiaosong was dubbed by Youkuyou to set up an iQiyi Studio and launched Xiao Song Qi Tan. In addition, Gong Yu told Titanium Media that the user properties of iQIYI and Xiaomi are very similar. “IQIYI's users are young and stylish. It is the highest match among all video websites and Xiaomi.”

Last year, iQiyi launched the "iQIY Iinside" strategy, and in line with the principle of openness, the content was deeply embedded in various terminals, such as the iQiYi TCL box. Xiaomi’s performance on smart terminals is undoubted. On the day of the Double 11th, Xiaomi TV 2 Home Theater Edition sold 26,144 Taiwanese goods at a price of 104,657,043 yuan. It ranked among all participating Tmall's single-digit household appliances. Sales and sales first.

In addition to the immense shipment of millet smart TVs, iQiyi values ​​the 70 million MIUI users and the strong user stickiness of rice flour. The Jinyuan policy did not help iQiyi achieve a major reversal of Youku Tudou, one of the important reasons being the lack of quality UGC content. Iqiyi has also been seeking a breakthrough in UGC, but neither the PPS channel nor the uncanny performance is satisfactory. Different from copyright videos, UGC can't rely on big investment, but it takes more time to accumulate. Once IGI's UGC tools and Xiaomi users have a chemical reaction, it may bring new breakthroughs to IGI's UGC. The iQIYI insiders disclosed to the titanium media reporter that iQIY Iinside’s previous gameplay was the iQIYI and hardware vendors’ advertising revenue sharing, and Xiaomi would certainly have a new business model after joining.

In the QA session of the press conference, a reporter asked Gong Yu how to spend the 1.8 billion yuan preparation in the long run. Gong Yu said, “There is no long-term to speak of. What is needed now is short-term high investment. One is original content. Purchase content: "Although the Internet video industry has developed over the past decade, it is still in a period of rapid growth, but it is also in the transition period from mobile phone screens to smart TV screens. Each video company has reached the final stage of sprint, and the slightest hesitation will instantly change the situation.

Millet is in the field where it is not so, proud of the marketing strategy is no longer time-tested, millet also followed the fate of an awkward road. The outside world unanimously regards the content as the watershed of Xiaomi. Content is the soul of Xiaomi's ecology. The contents of the layout, Chen Hao joined, 1 billion US dollars, the contents of this battle millet can only win can not lose.

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