Archie Art combined with PPS marks the bursting of the video industry fairy tale

Archie, a combination of PPS, marks the bursting of the video industry fairy tale, which is no longer a business that relies on intelligence, diligence and ability to get back, but as the competitive elements change, becoming one of the most traditional and mature companies in the Chinese Internet.

May 7, 2013, after Youku, potato merger, the Chinese video industry to reproduce the powerful alliance: Baidu announced to 370 million U.S. dollars in cash to buy PPS video business, and Baidu's video site with its Archie art merger. According to the Archie Art cited the data of the consultation, after the merger of the "platform-wide user size, duration have reached the industry first."

Just beginning Baidu actually more to Archie art is flow resources, but after a while increased its shares, Archie Art become Baidu's company. Until today, Baidu also took out hundreds of millions of of dollars for Archie Art merger bill, why?

Since 2005, the emergence of the video industry, the whole market experienced many rounds of competition eliminated, to 2012 actually has entered a alliances era. Especially after last March's market boss Youku and the second potato merger, the pattern and the competitive elements have undergone a fundamental change.

The key node actually appears in the 2011 Youku and Potato's successive listings. Before that, the Chinese video market cake has been growing, each company to eat, the competition is expansion speed, capital balance, who can eat enough cakes without being dead. At this stage, self growth is more important than peer warfare.

But after this, Youku and potatoes listed with Sohu, Tencent, Baidu before and after the launch of their own video business, quickly improve the threshold of video business; At the same time, cake growth slowed, competition intensified, from the scramble for users to compete for high-quality video content, but also led to a further uncontrolled increase in copyright. At this stage, the video enters the competition for capital, which is more about who can hit more money, buy more content, get more users (not new users, but Rob users from their competitors ' teeth).

Such a pressure situation, forcing some larger video sites are on the High-voltage line, and the direct result of high-pressure, is the merger. When the industry concentration increase, it is bound to lead to the video site itself on the upstream content, downstream users of the word, not only produced a large-scale advantage, but also because the game in a more powerful position, and squeezed out more space.

Stronger companies, such as the industry boss Youku, are directly targeting potatoes, and the ripple effect is a sense of urgency for the companies that followed the video industry, including the capital to enter video companies.

These companies can count on one finger: Tencent video, Sohu Video, Archie Art, and so on.

Therefore, when the market environment changes, the pattern change, actually causes the video industry competition element already to have the fundamental change.

The Archie of PPS, on the one hand, Baidu "too much cash" after the release of pressure, the more important is based on the above logic, in order to acquire the way to directly absorb more multi-channel, users, advertising space, and to obtain a greater right to the rights of copyright.

According to Archie, CEO Gong said, the video industry will inevitably enter the "oligarch Era", "conservatively, by the end of this year, the players will be only 35."

More directly, Archie Yi pps from this became a cool potato after the second big guy, leaving Tencent video, Sohu Video, as well as in the new competition can only look for mergers and acquisitions or vertical development of the outcome of the pplive, Storm audio and video.

In such a pattern, the competitive elements have been done well with a video company, the Internet technology gene is strong, the media capacity of many cows. In this increasingly mature industry, to become the next big guy, the competition is whether you have enough capital and integration ability to swallow another big fish.

Tencent video if still seek to develop alone, in the current situation I am afraid still have to be thrown out of danger, because the video site of their own independent traffic has been supporting a strong sustainable development model, Tencent can not blindly more than its own flow of all the guidance of the video.

If Tencent has capital, just hesitate, the situation of Sohu video is even more difficult. Sohu Video actually has been working quite well, can even say that in the play content, business transformation to achieve the ultimate, but these are still not enough to make up for the space from the user to advertise the short board, because each content in each video box in the business transformation ability finally has the limit.

"Sohu's share price is not in line with the true value of Sohu. "So buying with stocks is a loss," said Zhang Chaoyang, chairman and CEO of Sohu's board of directors. "This may reflect the dilemma of the Sohu video that has been doing well," he said.

But in reverse, this also means that Sohu actually considered a lot of mergers and acquisitions possibilities. When it comes to capital, the last sentence at the end of Charles Zhang is, "I can only speak here."

When the video industry enters the oligopoly era, it is impossible to gain competitive advantage by smart, diligent and powerful factors.

Baidu for Archie Art merged PPS to pay, because it understands that the video oligarchy of the world has no fairy tale. At least in the foreseeable future, the number of variables will be less, the industry will become more concentrated and the situation will become more stable.

Until one day, "a long time will be together, a long time will be divided," Gong said, "The future of technology brought about by the end of the changes and content consumption will create new opportunities for the market and create a lot of new competitors." However, this may be 5 years or 10 years after the story.