Official announcement: Shutdown!

China Fund News reporter Yi ShanAfter more than two years of high-profile official promotion, internet giant NetEase once again stumbled on short videos.According to a recent official announcement, the NetEase Knowledge Highway platform is about to end its operation at 00:00 on July 27th

China Fund News reporter Yi Shan

After more than two years of high-profile official promotion, internet giant NetEase once again stumbled on short videos.

According to a recent official announcement, the NetEase Knowledge Highway platform is about to end its operation at 00:00 on July 27th. This platform was officially launched in January 2021, and was once referred to by NetEase as the "first knowledge short video creation platform in the entire network that empowers creators through topic selection scripts.

It is about to be discontinued and has only been online for over two years

Recently, the NetEase Knowledge Highway platform released a notice of suspension. Due to the adjustment of the company's business, the operation of the NetEase Knowledge Highway platform will be suspended at 00:00 on July 27, 2023, allowing this road trip to reach its destination.

According to the announcement, NetEase Knowledge Highway stopped registering new users and uploading video content on July 13th. Starting from 00:00 on July 27th, after NetEase Knowledge Highway completely ceased operation, the website will be unable to log in, and the video content stored on the website will also be removed from the shelves and cleared. During the period before the cessation of operation, the platform had opened withdrawal entrances for creators and MCN institutions that had not yet withdrawn funds on NetEase Knowledge Highway.

For users who still want to continue to publish and disseminate creative content on NetEase products after the shutdown of NetEase Knowledge Highway Platform, the official said that they can choose to use the registered account information of NetEase Knowledge Highway to log in to NetEase Media Open platform to continue to publish creative content.

According to data, as early as December 2020, NetEase launched the knowledge short video content consumer brand "Knowledge Highway" on NetEase News, and subsequently applied for multiple "Knowledge Highway" trademarks. Subsequently, on January 21, 2021, NetEase held an online video creator conference and announced its official investment in the video field.

At the meeting, NetEase announced the launch of the "NEXT Creator Program", stating that it will support creators with "billions of cash, billions of traffic, and billions of exposure". At the same time, NetEase has launched the "first knowledge short video creation platform in the entire network that empowers creators from topic selection scripts", known as NetEase Knowledge Highway.

NetEase also has high hopes for the platform of NetEase Knowledge Highway. According to the plan announced at that time, NetEase Knowledge Highway will serve as a platform for video content, comprehensively connecting five major scenarios: NetEase News, NetEase Cloud Music, NetEase Strict Selection, NetEase LOFTER, and NetEase Youdao, achieving the goal of "one-time storage and distribution of video content across NetEase".

NetEase believes that the user's content Consumer behaviour has undergone an obvious value shift, that is, from pure entertainment information stimulation to expanding the horizon and improving knowledge reserves, hoping to get more sense of gain from content consumption. NetEase CEO Ding Lei also bluntly stated at the conference that in the current era of highly entertaining video content, only videos with knowledge, depth, and life have value. The evolution from interesting to useful is the core value orientation of NetEase's video content.

However, after more than two years of operation, as NetEase's knowledge highway is about to go offline, NetEase's exploration in the field of knowledge short videos has also failed.

Short videos continue to fail, and the game remains the main force

According to the "Research Report on the Development of Online Audiovisual Services in China (2023)", as of December 2022, the number of online audiovisual users in China reached 1.04 billion, surpassing instant messaging as the largest internet application. Among them, the number of short video users reached 1.012 billion, accounting for 94.8% of the total netizens. The market size of the pan network audio-visual industry has reached 727.44 billion yuan, of which the short video field has a market size of 292.83 billion yuan, accounting for 40.3%, and is the main source of industrial growth.

The report also shows that obtaining news and learning related knowledge have become important reasons for users to watch short videos. Short video platforms have become the primary channel for netizens to obtain news and information.

So, why did NetEase's knowledge short video platform ultimately fail? The reason may be related to being in the game too late. According to a report from the Prospective Industry Research Institute, the explosive period of China's short video market was from 2016 to 2017, and the market has entered a stable period since 2018. At the same time, short video platforms have begun to explore more diversified and deeper commercial monetization models. The data also shows that by the end of 2020, Tiktok and Kwai will have the absolute head advantage, and the number of active users will account for about 60% of the total.

At the beginning of 2021, NetEase officially announced the launch of the NetEase Knowledge Highway platform, which was obviously more than half a shot late. Therefore, some industry insiders at that time also called it "catching up with an evening episode". However, in fact, before the knowledge highway of NetEase, NetEase had launched multiple short video products such as "NetEase Drama Elite", "Gulu Short Video", and "NetEase Pineapple Video" in its early years, but all of them ended in failure.

However, compared to the consecutive failures in the short video field, the advantages of NetEase's gaming business are still relatively obvious, and it is currently the company's main source of revenue. According to the first quarter report of 2023, the company achieved a net income of approximately 25 billion yuan, an increase of 6.3% year-on-year; Among them, the net revenue from games and related value-added services was 20.1 billion yuan, an increase of 7.6% year-on-year, accounting for 92.7% of the total revenue.

In terms of Gross profit, in the first quarter, the Gross margin of Netease games and related value-added services reached 66.7%, up from 59.1% and 62.2% in the fourth quarter of last year and the same period last year. As for the double growth of Gross profit of games and related value-added services on a year-on-year basis, NetEase pointed out in its financial report that it was mainly due to the increase of online game revenue, such as Egg Boy Party.

From the perspective of game products, in addition to the first quarter mobile game dark horse Chicken rolls Party, NetEase said that its mobile games such as Dream Journey to the West, Dahua Journey to the West, The Fifth Personality, and Cold Against the Current all maintained high popularity. In addition, according to the latest research report of Guosen Securities, as of July 10, NetEase's Peak Speed and Cold Against the Water both ranked among the top five free and best-selling iOS games in China.

On the other hand, with the continuous popularity of ChatGPT, domestic companies such as Baidu, Tencent, Alibaba, and Huawei have focused on big model business, while NetEase has also actively stepped in and focused on the research and development of AI big models. NetEase mentioned in its Q1 performance interpretation that in the first quarter, NetEase continued to invest in self-developed key technologies such as AI big models, with a research and development investment of 3.7 billion yuan in Q1, accounting for 15% of revenue.

It is reported that NetEase has launched large models of different industries in the fields of industry, education, games, music and Metaverse and applied them to various scenes. In addition, NetEase's self-developed AI technology has been applied to the entire process of game industrialization, and AI technology has improved the work efficiency of key links by up to 90%.

NetEase stated that in 2023, it will accelerate the exploration of a new digital content production model combining "AIGC+UGC", promote the long-term development of various businesses, and create more economic and social value. Ding Lei stated that "in the AI big model competition, the true winner is the enterprise that can choose a good application scenario" and "looking forward to 2023, NetEase will adhere to focusing on key technology research and development and content innovation, creating more high-quality content products globally, and promoting the innovative development of the digital industry".

Editor: Xiaomo

Reviewed by: Wooden Fish

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