No one can become the YouTube of China.

No one can become the YouTube of China.
- youtube
  • Source: recently, watermelon video, bilibili and iqiyi are fighting again & quot; who is China's YouTube".


    YouTube can be said to be the holy grail of China long Video Company, including Tudou, Youku, six rooms, 56.


    com, Sohu Video, Tencent Video, iqiyi and now bilibili and Watermelon Video.


    All the video websites that have existed in China, except Letv, have wanted to build themselves into the YouTube" of quot; China at some stage.


    But they have either failed or are on their way to failure.


    What is YouTube? In the eyes of users, YouTube is an open video community, a great philanthropist who can skip ads, a top product with first-class functional design, and a long video recommendation stream as accurate as Douyin.


    YouTube is the promised land for all video users.


    If all long video sites have a bad experience, it must be because it & quot; is not like YouTube".


    But YouTube is not a charity.


    What is the nature of YouTube as a business? Is it accurate advertising? Is it an ultra-high percentage of creators' sharing plan? Is it a great homemade channel? Neither.


    YouTube's business logic is simple: a video site that pays almost no Internet fee.


    The server and bandwidth cost of the video industry if you have a basic understanding of the server cost of the video industry, you can skip to the second section.


    Why did Chinese video websites fail to do UGC or PUGC before? Because the server and bandwidth costs are unbearable.


    Why was Douyin only allowed 15 seconds of short videos when it first launched in 2016? Because the server and bandwidth costs are unbearable.


    Why did Wechat's moments rise from allowing 10-second short videos to 15-second short videos at the end of 2019? Because the server and bandwidth costs are unbearable.


    In an article [1] of the Daily Economic News in 2012, Chinese video websites at that time were divided into four categories: the first category is Youku and Tudou, which uses UGC (user shared content) to lengthen the legitimate video content; the second is the UGC model represented by 56net and Ku6, which focuses on user sharing content and interaction; the third is authentic HD videos represented by iqiyi, Tencent Video and Sohu.


    The fourth category is the video information category represented by the exciting network and the first video.


    In retrospect, you will find that the third category of video sites based on legitimate content has become the current mainstream.


    In the first category, after the merger of Youku Tudou, which both UGC and legitimate dramas have to do, it has actually become the third category.


    The second category is UG.


    C, PGC and community-based video sites have died out.


    Oh, no, it was a dead round, and now bilibili is the second round.


    Specifically, let's take a look at Tudou's data at that time: according to Tudou's 2011 annual report, Tudou's server bandwidth cost that year was 180.


    2 million yuan, accounting for 42.


    1% of the revenue cost.


    In other words, nearly half of Tudou's costs are paid to operators.


    According to a report released by iResearch that year, Tudou had 193 million monthly active users that year.


    [2] here, we divide the two and invent a whole new concept to compare the inflation of paid server costs: & quot; infrastructure return on investment (too long, hereinafter referred to as IROI) & quot;.


    Tudou's IROI=1.


    93/1.


    802=1.


    07 person / yuan, that is, 1 yuan per year on server bandwidth, can serve 1.


    07 more monthly active users.


    Some people will say that the overall cost of server bandwidth has been falling over the past decade, and the operating costs of today's video sites cannot be so high.


    This is actually caught in the trap of Moore's Law-computers at the same price today perform more than ten times better than those of 10 years ago, but can you still install Windows XP on today's computers and continue to use the software and games of that era? In the past 10 years, users' requirements for picture quality have changed from 480p to 4K 60 frames with a high bit rate.


    And the significant upgrade of shooting equipment will make the current pure UGC platform more cost-effective.


    If you don't believe me, take a look at bilibili's server bandwidth cost.


    Bilibili's bandwidth server fee for the whole of 2019 was 919 million, accounting for 16.


    5% of the cost.


    Bilibili had 130 million monthly active users at the end of 2019, so if you calculate it, you can draw the following conclusion: bilibili's IROI=1.


    3/9.


    19 is 0.


    14 person / yuan, bilibili invests 1 yuan more per year, and can only serve 0.


    14 more people.


    In other words, in terms of service capacity, instead of falling, the cost of server bandwidth has increased sevenfold in the past 10 years.


    (about five times excluding inflation) with such high service costs, only by frantically squeezing commercial value can we become a normal business rather than philanthropy.


    Tudou failed to survive such a high cost on its own and was finally eaten by Youku.


    So what can bilibili rely on to smooth out this seven-fold cost increase and make a profit? Of course, it depends on & quot; to change the flavor & quot;.


    If you can't cut expenditure, you can only open source.


    Bilibili, as a highly sticky 172 million monthly active Internet product, toSo far & quot; is pure & there are a lot of places where quot;, can add advertising.


    Whether it is to continue to make efforts to divert games, pay for knowledge or to be an e-commerce in Z era, it should be no problem to survive and even make a profit one day.


    One spoonful of commercialization is not enough, seven spoonfuls, up to profit.


    But when that day comes, will bilibili still be the promised land of quot; & quot; in the hearts of users? In the same way, the same is true of watermelon videos.


    Why can YouTube be YouTube?? Let's first set up a scenario: Baidu has obtained a magic, so that Baidu network disk can run without a server and bandwidth, what will it do? Baidu's online disk will certainly remove all capacity, download and upload restrictions.


    The price may be reduced to a symbolic 1 yuan or completely free, and then make money by indirect means such as scanning user data and placing accurate advertisements, when Baidu's online disk must be the best user experience on the planet.


    When a business becomes unprofitable, it usually becomes less profitable.


    Because every penny received is earned more, it is more important to squeeze competitors with a good experience than to earn an extra dollar.


    And YouTube is the product that gets the magic.


    To explain this, let's start with the domestic network environment.


    If you surf the Internet early enough, you should remember that it is very slow for domestic Internet Unicom users and telecom users to access each other, transfer files, type voice or video.


    Until now, some domestic online games are also divided into telecom service, Unicom service and mobile service.


    The reason is that even though China's operators are state-owned enterprises, companies still account for each other independently.


    They each build their own infrastructure (which used to be), which is equivalent to the formation of several physical networks of quot; & quot;.


    As a Unicom user, the access fee you pay to Unicom is used to access the resources hanging on the Unicom network.


    Whether you are chatting with a telecom user or downloading content from a website hanging in the telecom room, half of you are using telecom infrastructure.


    So in theory, you have to pay for telecom.


    However, this thing can not be done too well, or it will really become two nets.


    Therefore, an agreement will be signed between Unicom and Telecom, which is rarely mentioned in China, so there is no name.


    In foreign countries, it is called Peering Agreement, peer-to-peer agreement.


    To put it simply, it is for the convenience of users of Unicom and telecom to access each other, although Unicom users do not pay to Unicom, and telecom users do not pay Unicom, but they can get a certain free data exchange quota for each other.


    For example, it is agreed that every day all Unicom users can send 1TB content to the telecom network, and every day all telecom users can send 1T to Unicom.


    B content.


    Within this amount, neither Unicom nor telecom will pay the other, and the two users will not have to pay for the broadband.


    But the name quot; peer-to-peer protocol & quot; sounds bad because there are not so many equivalents for things on the Internet.


    Let's take it a step further and now pull the video website in.


    Youku was founded in 2005.


    It is headquartered in Beijing, the site of Unicom.


    Let's assume that its initial computer room is only connected to the bandwidth of China Unicom.


    What will happen then? Youku is developing rapidly, and more and more users are watching videos.


    Telecom will find that Unicom's daily quota for accessing Unicom's online resources is used up in an hour, and Unicom has to pay a settlement fee for the remaining 23 hours of running traffic.


    Not only that, and all telecom users access Youku very slowly, the card is not good.


    The only solution to this problem is to let Youku also connect directly to the telecom network, so that telecom users do not have to Peering to watch videos on Unicom.


    However, this solution has developed two different directions of compromise at home and abroad: 1.


    In China, the operator is absolutely strong, only it collects money.


    If you want to develop users in South China, you must come to our telecom backbone network to pull a line.


    In this mode, website operators need to pay bandwidth fees to operators to ensure user access speed.


    two。 In foreign countries, Google is absolutely strong, you a carrier access to Google is so slow, waiting for users to change broadband brands.


    Therefore, operators should use Peering to actively dock with Google's computer room.


    In this direction, website operators can even charge operators for money to improve user access.


    Google started its series of operations here: first, in 2005, Google was revealed to have bought a lot of dark fiber (Dark Fiber) [3].


    Dark optical fiber means that operators tend to lay more optical fiber when laying optical fiber for cities.


    For example, they expect the building to use 1TB broadband in the future, but will lay 10TB underground.


    Because the cost of optical fiber laying mainly comes from digging the ground, digging the wall and burying the wire, just like the wiring of your home decoration, it is only reasonable to open the wall once.


    Therefore, for a long time, although there was only 1TB network access in a building, the 9TB bandwidth optical fiber was still idle in the wall.


    Google rents dark fiber everywhere at a low price.


    Where you rent a more complete piece, you will build an edge computer room there and spread out the edge computing and CDN of some of your own servers.


    In this case, for example, you are a user of a broadband operator in City A, and this broadband operator and GooGle carried out Peering.


    Your request for access to YouTube will be routed to the edge computer room of Google in City A, and then transmitted on the intranet of Google, which greatly saves the number of network routes and improves the speed of access.


    Google, on the other hand, will not pay a bandwidth fee to the operator in City A, even though it should have.


    In 2009, Google was already the largest holder of Dark Fiber in the world.


    Some media began to question whether Google wanted to hijack the Internet on the grounds of public rights.


    So Google simply launched its own broadband operator Google Fiber the following year.


    The project has largely stalled in 2016.


    However, some foreign media have always suspected that the purpose of Google Fiber is never to provide services to users, but to frighten operators [4].


    Now it seems that the purpose of scaring operators is two: 1.


    At that time, operators in Europe and the United States, especially in the United States, were affected by the collapse of Bubble on the Internet in 2000, and were reluctant to invest too much in infrastructure, which hindered the development of many new services of Google.


    The vernacular is that operators are reluctant to speed up and reduce fees for fear of bankruptcy.


    Google Fiber is the operator of quot; low-cost 1G home optical fiber & quot; in the United States, which is equivalent to putting a catfish in a box of sardines.


    two。 As an operator, it's better to Peering, with an operator after all & quot; if your users want to access Google, quickly, you have to pay me, not me.


    & the logic of quot; is unacceptable in the global ISP circle.


    But if it is not Google, but an operator Google Fiber, it is in line with the general principle of equality of Peering Agreement.


    Both of these goals should be achieved that, Google Fiber does not cover many areas and does not have many users from the beginning to the end.


    , Google Fiber came to a standstill in 2017 after the three major operators in the United States launched similar gigabit broadband.


    After Google Fiber stagnated, Google Peering did not stop, but was incorporated into Google Cloud, and developed better and better.


    You can see the specific development data on the peering.


    google.


    com portal.


    So, YouTube isIs it part of Google Peering? Apparently.


    According to a presentation on Google Peering by Ritz Campbell, product manager of YouTube, at the 2014 APNIC Conferences (Asia Pacific Internet Information Center Annual meeting), PPT shows.


    There are three major benefits for operators to join Google Peering, one of which listed separately is to improve the quality of YouTube access.


    This practice has caused resistance in France, where broadband users almost all over the country found that access to YouTube became very slow in early 2013.


    The reason is that all operators in France do not Peering, with Google and they think that if Google wants French users to access YouTube faster, Google will have to rent French broadband from them (Chinese operator model).


    [5] of course, France surrendered at last.


    To go a step further & quot; intimidate quot; operators, Google has been rating ISP services since 2014, and the tool is quot; to measure how your network accesses YouTube & quot;.


    If your test results are not good, YouTube will give you detailed science popularization, which is mainly the operator's pot, and suggest you switch to a broadband that supports Google Peering.


    YouTube, a product owned by Google (Alphabet), has rarely disclosed key data since it was acquired in 2006.


    Until 2020, Alphabet reported the revenue of YouTube for the first time in its annual report, but did not split the cost of YouTube.


    In Alphabet's financial report, the cost of server bandwidth and infrastructure maintenance is an astronomical figure of about 290 billion RMB, which is about 10 times the cost related to Tencent, but this includes the cost of all Google services around the world and Google Cloud sold by Google, so it does not have much reference value.


    So how do you prove that YouTube is only a small part of this? Back in 2009, Arbor Networks, a data monitoring company, released a report saying that the cost of quot;YouTube bandwidth was almost zero & quot;.


    According to that year, YouTubeAs almost the only video site in the world, with 100 billion broadcasts, traffic accounts for only 6% of the network's traffic.


    [6] data monitoring companies generally cooperate with ISP to set up bypass traffic monitoring on the backbone network for market research, similar to TV & quot; ratings monitoring & quot;.


    Therefore, Peering traffic cannot be detected without entering the public network route.


    The huge gap between Google's user active data and third-party monitoring data means that Peering has played a huge role.


    Your largest video site, with more than 1.


    5 billion monthly active users and 900 million video hours per month, accounted for only 17.


    31% of Internet traffic.


    In the following year, YouTube accounted for a much lower proportion of public network traffic than Netflix, even though it had dozens of times the number of players and users.


    In 2014, Netflix accounted for 32.


    39% of total uplink and downlink traffic in North America, while YouTube accounted for only 13.


    25%.


    [7] later, with the rise of the mobile Internet, without the blessing of Peering, YouTube accounted for more than 30% of the total mobile traffic in North America [7].


    This is the bandwidth cost that websites of this magnitude should have.


    Then, Google worked out the mobile virtual operator Google Fi, tried to replicate the strategy of pipelining the typical operators, but because the base station construction involved in the mobile network is more complex than the fixed network construction, it has not made enough achievements so far.


    There is no doubt that without the free bandwidth (or bargaining power for operators) provided to YouTube like Google Peering, it would be a pipe dream for quot; to become China's YouTube".


    Because, to the operator bargaining power, what changes not only is the cost, but also the competition mode of the video website.


    After reducing rigid operating costs to almost free, YouTube became the quot; bandwidth-free Baidu network disk-quot;.


    The essence of YouTube's PUGC business is not to incubate potential stars, but to keep unlimited typing monkeys-as long as you want to share videos on the Internet, whether you are professional creators or high-paste videos shot by young people in a small town, YouTube will provide you with high-definition, high-bit-rate, high-access video hosting services.


    There will always be some monkeys who accidentally become Shakespeare, bringing high commercial value to YouTube and video creators.


    And there are only short ones in China.


    Video can use this model, long video sites to do this unlimited monkey UGC model even the cost of server bandwidth is not even flat.


    After defeating competitors with low-cost and high-quality services, YouTube is purely post-paid for content creators.


    It is almost impossible for Youtube to skip the data-based creator-sharing plan and directly pay high signing fees for Youtuber, as domestic video sites do.


    (this kind of thing only happens on a few channels such as YouTube Red Camera.


    In addition to Google Peering's bandwidth savings, YouTube can also make full use of Google Cloud's idle resources in storage and computing to offset the inventory cost of cloud computing business.


    In addition, YouTube's accurate advertising recommendations also reuse Google Ads's R & D and data collection costs.


    This part of the headlines and Tencent may have, but may not be able to reuse so well, bilibili and iqiyi certainly do not have.


    Of course, it's not impossible to have to do it, but the more you do it like YouTube, the faster you die.


    Reference: [1] "can Youku eat Tudou & quot; & quot; brings out Video sweetness", https://m.


    nbd.


    com.


    cn/articles/2012-03-14/640767.


    html[ 2] "China's online video market & quot; competing for supremacy & quot;" ", https://lmtw.


    com/mzw/content/detail/id/66547/keyword_id/-1[ 3] Google wants' dark fiber', https://www.


    cnet.


    com/news/google-wants-dark-fiber/[ 4] Why Google Fiber Is High-Speed Internet's Most Successful Failure, https://hbr.


    org/2018/09/why-google-fiber-is-high-speed-internets-most-successful-failure[ 5] YouTube sucks on French ISP Free, and French regulators want to know why, hTtps://gigaom.


    com/2013/01/02/youtube-sucks-on-french-isp-free-french-regulators-want-to-know-why/ [6] "reported that the cost of YouTube bandwidth is almost zero", http://tech.


    sina.


    com.


    cn/i/2009-10-17/10583515309.


    shtml[ 7] Sandvine Global Internet Phenomena Report reports / feedback over the years