Chapter 335: Support and Launch

Currently, Chang'e Video is still in its test launch phase, with no ad revenue, and even the paid membership system hasn't been activated—everything is free to watch, so there's no money coming in.

But the server operating costs are still being spent.

The video interface is very simple, with categories like movies, TV shows, and children's content.

The movies and TV shows are all content provided by Yutu and the Zhong family, plus some older TV shows and films from Hong Kong Wireless Television and Asia Television.

Old film copyrights from Cinema City, Shaw Brothers, Golden Harvest, and others—these copyrights are dirt cheap now, a few million can buy a whole pile.

Domestic old movie and TV copyrights from state-owned studios like CCTV are also plentiful, sold in bulk for just a few million.

Animation content Bilibili already had, and Shanghai Animation Film Studio has a whole bunch too—titles like "Havoc in Heaven," "Nezha Conquers the Dragon King," "The Scripture of Heaven," "Black Cat Detective," "Calabash Brothers," "Lotus Lantern," all of them.

Only through this approach was Chang'e Video filled out to a richer state.

In an office, Fang Hong, Zhang Lidong, Zhang Nan, and a few others were discussing matters.

"Based on the data, 'Legend of Lu Zhen' has an online play count of 10.98 million, and the platform's daily active users are around three million," Zhang Nan said.

"That few?!" Fang Hong was surprised.

In his previous life, he had heard this show had play counts of tens of millions—this was way too low, not even a fraction of what platforms like iQiyi had.

The gap was too huge. iQiyi had fifty million daily active users, making it the number one long-form video platform. This one couldn't even crack the top ten—even the tenth-ranked broadcasting platform had tens of millions of daily active users.

This year was an era of mergers and acquisitions for video platforms, and also an era of massive expansion. Just recently, iQiyi acquired PPS, and its strength would jump by a huge margin.

Tencent Video was also bringing in British drama resources by partnering with the United Kingdom's Six Majors production companies: BBC, ITV, Bertelsmann, All3, Endemol, and others.

Youku was also partnering with Lionsgate, CCTV, 20th Century Fox, and others to bring in their film and television resources.

These three major platforms were all expanding, but Chang'e's pace was too slow. They had money and could buy quality content, while he could only rely on himself.

"With daily active users, some watch today and then come back in a couple of days when more episodes are out—that's normal. Old users leave, new users come in, but the data is constantly growing," Zhang Nan was optimistic.

As long as Yutu could keep producing hits, they could carve out a place for themselves.

Fang Hong asked: "Then how are you calculating these play counts?"

"One user watching one complete episode in a day counts as one play. Repeated IPs or repeated devices only count once; extras don't count," Zhang Nan explained.

Being able to hit ten million plays means ten million people have come by—within such a short time, that's pretty good!

It took Tencent two or three years to reach ten million daily active users, but Tencent was very conservative back then, watching the situation and not expanding.

Most people still watch TV on their computers now; few watch on phones. One reason is the specs aren't high enough, another is that small screen just isn't satisfying to watch.

Then there's the fact that mobile data is ridiculously expensive—they can only use Wi-Fi at home. But Wi-Fi hasn't fully taken off yet either; not every household has it, and many people are still in the piggybacking-on-neighbors'-Wi-Fi stage.

So watching TV now means either a TV set or a computer. Watching on a phone over Wi-Fi—that's only for people with the means.

The infrastructure on the network side is still incomplete.

This made Fang Hong feel a bit better—otherwise, after all the effort he put into promotion, having only this many people visit Chang'e Video would be too much of a loss.

It's just that user retention is a bit weak. If user retention can be handled well, there's still potential.

It's just that Yutu's content is still too little—just a few fresh TV dramas like "Star You" and "Beijing Love Story."

Movies-wise, there are quite a few recent ones from the past few years, but they're done in an hour or two. Unlike TV dramas with dozens of episodes, you can watch for several days.

If you watch in a serialized format, you can stretch it out for about a month—one hit can retain most users for about a month.

Online broadcasting platforms still need to keep producing new content—variety shows, web dramas, all that—otherwise they can't get user retention right.

"You mentioned earlier that we need to set up a revenue-sharing standard for web dramas. This calculation method is preparation for that standard. If we don't limit devices and IPs, others can inflate play counts, and we'd be put in a very passive position," Zhang Nan said.

If every click counts as a play, then play-count inflation will happen. Even if Chang'e went bankrupt, it couldn't pay out that revenue share.

A few billion plays could generate tens of billions in revenue share—who could handle that? Even Tencent couldn't afford to pay it.

Fang Hong naturally understood the logic behind this.

Setting standards for web dramas was a revenue-sharing concept he had proposed long ago: for each valid user play, the production side gets a certain amount of money.

There's nothing wrong with this approach—the problem is just that the numbers don't look good.

"You set up two sets of play-count calculation standards. One is for outsiders to see—every click counts as one play, no matter how many times you click, it all counts. The other is the one you just described, for internal viewing," Fang Hong suggested.

"If we do it this way, the data will be way too inflated!" Zhang Nan was shocked.

With this calculation method, casually hitting tens of millions or even billions of plays—that's just too terrifying.

"That's exactly what we want. We need to give the outside world the illusion that our platform is a mainstream platform. This is brand-building, and it's also a form of advertising. We shouldn't give people the impression of a fringe product that looks like it could go under any moment."

Fang Hong added: "Don't overdo it either. Just multiply the current play count by five to ten times."

Multiply by five to ten times and that's not overdoing it? Zhang Nan felt his earlier thinking was still too conservative—this guy really knew how to play the game. He'd learned a thing or two.

Zhang Lidong hadn't spoken the whole time, and he also found it somewhat unbelievable—outrageously so.???? These tactics would become commonplace later, but video platforms now rarely played this way. They were all still relatively innocent; even if there was some inflation, it wasn't too extreme.

But Fang Hong was coming in and immediately multiplying by five to ten times—in the future, TV dramas with tens of billions of plays might actually be born.

Over a hundred million plays, multiplied by ten, equals a billion.

By this standard, "Star You" would soon break a hundred billion plays.

Because it had already broken 830 million—that's the click count, meaning one click equals one play, not multiplied by ten.

"Alright, we'll study this set of calculation standards," Zhang Nan agreed.

It was still just a test launch, and many things weren't perfected yet. Setting the rules still needed slow exploration.

Once the rules are fully set, that's when the big development begins. Just like how Bilibili encourages Up Masters to create content, Chang'e also needs to encourage small production companies to make web dramas.

Relying on Yutu Production alone is too slow. Other forces are needed—Yutu Production's film and TV content simply can't fill what Chang'e Video needs. A platform requires a massive amount of content.

"We still need to commercialize as soon as possible—bring in some advertisers, and the membership system needs to be perfected too," Fang Hong felt he was starting to struggle to hold on.

The main issue is no profit, only expenses. Burning money is burning money, but at least some return needs to come in.

"That requires guaranteeing traffic first," Zhang Lidong said.

"There are follow-up TV dramas lined up," Fang Hong said.

To guarantee traffic, you need to guarantee continuous TV drama output. Coming up are "Men Di," "The Heirs," and others—all considered hits.

For Chang'e Video, Fang Hong had originally planned to focus on developing TV dramas.

"But on this one you'll still need to sign an agreement with Yutu. The licensing fee can be owed for now and settled slowly, but it can't be skipped — only with money can they keep producing continuously, especially for web dramas. If they don't get on satellite TV, there's no capital flowing back, and it's hard to operate." Fang Hong reminded.

"Alright, that's what we were planning too." Zhang Nan nodded.

Not paying the licensing fee isn't realistic — they have to pay something, after all, the other side has no obligation.

Fang Hong thought about this for a moment. As Yutu's old General Manager, he took several hundred million yuan out of Yutu every year as dividends; injecting it into Chang'e was the same thing.

No need to lump them together and let the people below take less money.

Yutu could just help Chang'e get off the ground. At Chang'e's current size, Yutu couldn't afford to support it.

"By the way, how's the game been lately?" Fang Hong asked.

That was what he cared about most — without the game to prop things up, Chang'e's various sectors couldn't be sustained.

"We re-encrypted the client and tightened internal management standards, and it was curbed, but a small number of cheats still appear." Zhang Nan said.

Generally, cheats work by cracking the client and sending false data to the Data Center. The Data Center thinks it's correct and modifies the game data — that's the basic logic.

"So the problem is internal?" Fang Hong said.

"Sort of, but some of the old developers have left the company, and they know the Hero Glory code. After leaving, they've also stayed in touch with people inside, so we can't tell yet whether it's an inside job or those former employees. We're still investigating." Zhang Nan explained.

If it's the people who left, there won't be much to find; if it's someone inside, once management is strict, passing on data loopholes becomes very difficult.

But there are still experts out there in the wild who can crack it.

"We're using legal means to crack down on civilian cheat organizations, but overseas it's hard to contain." Zhang Nan added.

"That garbage company Ubisoft — once the contract expires, drop them. Be ready to take over the International Market yourself." Fang Hong waved his hand.

Chang'e Technology was currently expanding at top speed, so building bases overseas was feasible.

The contract with Ubisoft would expire at the beginning of next year, and taking it back to run in-house would be just right. By then Chang'e's headcount would have grown, and overseas bases would already be built.

The main thing was that only taking 30% of the profits was too little. He now wanted to take everything back — he really couldn't stand burning cash like this; the moment the game had a problem, it was agonizing.

In the past, giving it to an agent was because his strength didn't allow it, he couldn't handle everything himself. From now on, that wouldn't necessarily be the case!

"Got it!" Zhang Nan agreed.

If so, Chang'e's revenue could step up to the next level.

"See if you can find some top programmers to develop an anti-cheat system and curb it through technical means." Fang Hong suggested.

"Technical Presidents Yang Zhenyuan and Hong Dingkun are leading the effort, with dozens of program Experts already developing the anti-cheat system." Zhang Nan said.

"That's good then!" Fang Hong nodded.

A company's forward march will always have some difficulties — just overcome them. This both tempers the team and builds risk resistance.

(End of chapter)