(Chinese Version)

(Source: Vision China)

Recently, TouTiao’s 15-second short video platform Amemv rose into popularity almost overnight, marking the ambition of Zhang Yiming, founder and CEO of TouTiao, to catch up and even outperform other Chinese internet giants.

Passion, youth, hot blood, joy… these are labels many users put on Amemv.

Amemv, a Chinese lip synchronization short video APP, rose into popularity this April. As online celebrities emerged from other short video platforms such as Miaopai posted innovative rap videos made via Amemv in their WeChat friends circle, both social network users and investors began to go after everything about Amemv.

Amid an array of vulgar short video platforms, Amemv, with strong European and American electronic music genes, seems to be quite a contrarian one. “In fact, there’s high entry to the APP,” a heavy social network user told TMTPost.

Known as “an interesting community for young people to make friends via hobbies”, Amemv is actually developed by TouTiao.

As one of TouTiao’s strategic products, Amemv was launched as early as last September. Recently, Amemv disclosed that its daily view times had reached 100 million.

A sneak attack against Kuaishou

From the promotion of “Broadcast yourself” by Youtube to the rise of UGC long-video communities in China, from the battle of film & TV series adaptation right to the merger of Youku and Tudou in 2012, the era of PC-based UGC communities was gradually replaced by the era of mobile short videos.

Indeed, expressing oneself and recording life in videos have become a rising need of internet users.

With the rise of mobile internet, people’s life is increasingly fragmented by smartphones. Although major Chinese video platforms have all spared their efforts in the mobile end, they failed to develop any excellent product with mobile internet characteristics, since they often contain the same content and adopt the same content form in both platforms.

As we see the rise of Miaopai drawn by the “Bucket Challenge” and the rising attention towards Weishi due to its shutdown, we can conclude that mobile short video platforms rise and draw public’s attention mostly thanks to the participation of celebrities in promotional activities or PGC contents produced by professional organizations.

This rule also applies to Kuaishou APP. In fact, it was not until last June that Kuaishou rose into popularity overnight thanks to a report by Doctor X and people began to realize the potential in the UGC short video sector.

This March, Kuaishou announced that it had completed $350 million Series D round financing led by Tencent.

At present, most contents on Kuaishou APP come from the daily life of people living in third and fourth-tier cities.

Although kuaishou was once put on lables such as “countryside”, “grassroots”, and “crude”, Su Hua, CEO of Kuaishou, has reiterated that “in fact, Kuaishou has more users in first-tier cities, including Beijing, Shanghai, Guangzhou and Shenzhen” and that “Kuaishou represents the average life of Chinese cities. If all Chinese cities become first-tier cities one day, then Kuaishou will also represent life in first-tier cities”.

Coincidentally, as Kuaishou completed Series D round financing this March, Amemv also came into public view and was soon ranked as one of the TOP 50 free APPs in Mainland China’s App Store.

Any time you open Amemv APP, a recommended high-resolution short video will automatically play. This way, users will be attracted to the short video in a short time and won’t be easily attracted. In comparison, users have to click and play short videos on most other short video platforms.

Christy Zhong and her husband Shawn Zhang are both heavy Amemv users.

In fact, vertical high-resolution short videos have already been regarded as “industry standards”.

“After analyzing the bebavior of 60 million DAUs, Kuaishou found out that vertical short videos have become industry standards. Those that grasped such standards will grasp an opportunity in this entirely new industry. This is the ultimate answer,” Zeng Guangming, co-founder of Kuaishou Technology, mentioned in a TMTPost report.

As a matter of fact, Amemv does intend to penetrate among the group of young people living in first and second-tier cities that are not yet covered by Kuaishou. By building a fashionable and cool youth culture community, Amemv attempts to fully embrace the popular culture of this group of young people.

Amemv’s respondents revealed to TMTPost that at present, its users are mainly 20-something well-educated young people living in first and second-tier cities.

“I wish Amemv can keep it this way and create a pure land for the large groups of internet users. Never blindly expand user base to the countryside or grassroots as many other platforms,” a user commented under Amemv’s App Store page.

In fact, Amemv did adopt an entirely different set of product management ideas. For example, Amemv’s respondent revealed to TMTPost that they preferred to distribute traffic to less-known dance and performance talents than online celebrities. For them, this group of minor celebrities is highly active in uploading new short videos and each of them can attract a small group of users. Therefore, Amemv no longer needs to worry that their DAUs will plummet after online celebrities leave their platform.

Indeed, this is a lesson Amemv has learned from the rapid rise and fall of Xiaokaxiu. As one of the first group of lip synchronization platforms, Xiaokaxiu attracted over 1,500 stars and celebrities in its heyday around 2015 and once topped the Mainland China’s App Store. However, after celebrities’ novelty subsided, Xiaokaxiu gradually faded out of public attention.

A race against time

At the primary stage of short video competition, new rivals constitute a vital variable.

This March, TMTPost happened to notice Musical.ly, a Chinese short video platform popular overseas, and revealed that Muscal.ly was said to enter the short video battle soon back in China.

With over 200 million overseas users, Musical.ly is also a short video platform featuring elements such as music and social networks.

However, many Zhihu’s overseas users found that Musical.ly and Amemv had a lot in common. “Indeed, Amemv is copying everything from us, from product logic to operation strategies,” Yang Luyu, co-founder of Musical.ly, told TMTPost.

Nevertheless, Musical.ly was a step slower in the Chinese short video market since its main focus used to be the global market. “Musical.ly’s delay in the Chinese market enables its rivals to strike first,” Yang said regretfully.

“In the next few months, we shall engage in vigorous competition with Amemv,” Yang added, though he didn’t reveal its specific plan in the Chinese market.

Screenshots of Amemv and Musical.ly

However, Amemv’s respondent revealed to TMTPost in a recent interview that its product logic actually came from a German APP called Dubsmash.

“Both Chinese and American young people love the idea of expressing themselves through short music videos. Needs beget products,” the respondent explained. As long as users love the APP, they didn’t care if their product was similar to others.

“The most important task is to solve the unsolved problems in previous short music video platforms and have young Chinese willingly accept and embrace our product,” the respondent added, “we better understand the needs of Chinese users, especially young Chinese.”

This is also why Amemv put much of its time and effort on developing filters and special effects. There’s often strong cultural barrier on UGC-based short video platforms, while Chinese people are more internalized and have all kinds of idol burden, the respondent explained.

Up till now, Amemv has released 10 special effect templates and maintained high user participation rate. TMTPost also found that Amemv had already changed the name of “special effect” button into “Props”. It is likely that Amemv will soon release paid special effect templates and add a new source of its income.

Secret to popularity

However, there’s nothing new about filters and special effect templates for Chinese users.

After all, Meitu has already grabbed a large number of female users with its various filters and special effects and once topped the free APP list in Mainland China’s App Store for 24 consecutive days. Today, filters and special effects have also become standard functions on short video platforms.

However, Amemv aims to be far more than a tool. “The entire company (TouTiao) has long been thinking about how to enter the UGC short video race,” Amemv’s respondent told TMTPost.

To a degree, Amemv has adopted the same development path as Instagram, from a cool tool featuring filters and special effect templates to a content community.

In fact, Instagram’s rise had much to do with filters. At the early stage, Instagram’s users mainly included high-end users and even professional photographers who had high demand for photo quality.

With high-quality filters and full support of major social network platforms, Instagram grabbed a number of loyal users. Although it was later acquired by Facebook with $1 billion, it didn’t prevent Instagram from being one of the most influential photo-based social network APP.

Similarly, Amemv attracted the public attention first through talents in the music and online celebrity circle and college students in dance and music societies.

“I’ve got to admit that I deleted the APP for a while because I didn’t figure out how to use it,” an Amemv user told TMTPost. However, two days later, he downloaded the APP again and studied the secrets by viewing other users’ short videos again and again. Sometimes, he would spend an entire afternoon doing so and never feel bored.

However, it was not until this March that Amemv achieved major breakthrough through the “Shower Dance” activity. Amemv’s respondent revealed to TMTPost that their operation team would keep up with the latest trends of popular culture to discover new hot-spot topics, songs or dances among young users.

Search index of “Amemv” on search engines

“The other days, soon after Lady Gaga released a new solo, Amemv followed up,” an early Amemv users told TMTPost.

With the full support from TouTiao, Amemv is in no hurry to pursue profits and achieve commercialization. Compared with profit model, Amemv’s team is more concerned about attracting new users and keeping old users at present.

A broadcaster also revealed to TMTPost that Amemv’s Operation Editors had always been exchanging ideas with them to perfect the APP. “Previously, when I made new short videos via Meipai, I have to figure out myself what kind of video I wanted to make. Now on Amemv, however, I have a clear set of game rules to follow,” the broadcaster explained.

TouTiao’s ambition towards future

As a matter of fact, Zhang claimed that TouTiao would integrate all its resources in short video sector and spend at least 1 billion yuan to reward short video makers during the 2nd TouTiao Account Columnist Conference held last September.

On May 16th, TouTiao invested another 1 billion yuan in its another short video APP “Volcano Short Video” and planned to support UGC short video producing with 1 billion yuan in the next twelve months.

While Amemv targets mid and high-end users in first and second-tier cities, the group of users Kuaishou had ignored, Moutain Short Video marked Zhang’s ambition to compete directly with Kuaishou over grassroot users in third and fourth-tier cities, though 1 billion yuan will be far from enough to facilitate its competition in the long run.

A day earlier, a quotation sheet was widely circulated on the internet, detailing the invitation quotation of different online celebrities. For example, the quotation of MC Tianyou reached as high as 20 million yuan. “Yes, MC Tianyou is to join Volcano Short Video in the near future,” Sun Zhi, product manager of Volcano Short Video, confirmed during the press conference. However, he didn’t reveal the specific business cooperation model.

What’s really threatening to other short video platforms, however, is that Moutain Short Video might be added to TouTiao APP some day in the future, whose DAU and MAU has reached 78 million and 175 million as of December 2016.

Besides, based on the “Mobile Internet 2017 Spring Report” released by QuestMobile this April, TouTiao’s video service has successfully penetrated half of its user base.

It is worth noticing that although TouTiao still ranked 23th among Chinese APPs with over 100 million users as of Q1 2017, its growth rate reached 115.8 per cent year-on-year. In addition, its average monthly usage time has reached 1,021 minutes, only second to WeChat (1,965 minutes).

TouTiao’s long average usage time owes much to short videos. However, most short videos on TouTiao are made by TouTiao account owners. In other words, most short videos on TouTiao are PGC-based at present.

Based on QuestMobile’s statistics, Miaopai remains the biggest PGC-based short video platform in China.

During the World Online Celebrity Conference held last September, Liu Xinzheng, vice president of Miaopai’s mother company Yixia Technology, revealed that UGCs accounted for 90 per cent on Miaopai and popular PGC accounts contributed to 90 per cent of view times.

The problem with TouTiao’s PGC model, however, is that once users find the types of contents they are interested in, they will gradually move to platforms specialized in the specific types of contents.

At the same time, TouTiao’s success owes much to being listed as one of the pre-installed APPs in new smartphones. However, since Chinese users replace new smartphones every year on average, APPs that depend highly on traffic have to gain users again every year. In this sense, these APPs’ dominance may not be as solid as people expected.

From the perspective of the business model, TouTiao relies highly on ads. Video ads, however, are naturally short videos. To tell a good story, every second counts. This rule applies not only to ads, but also in the short video sector.

In this sense, what TouTiao really attempt to do is consolidate the very foundation of TouTiao via short videos.

At the same time, TouTiao has sped up its globalization efforts. This February, TouTiao announced that it had acquired North American mobile video production platform Flipagram and gained the entire product and operation team of Flipagram. According to China Business News, the acquisition only cost TouTiao $ 50 million.

Flipagram, the American counterpart of Kuaishou

Earlier, Flipagram received a $ 70 million Series B round financing led by Sequoia Capital in July 2015 at a valuation of nearly $300 million.

As a matter of fact, Amemv marked Zhang Yiming’s ambition to catch up and even surpass internet giants.

After Wang Xing, founder of Renren, Fanfou and Meituan, came up with the idea of “the second half of internet battle”, people began to refer to TouTiao, Meituan & Dianping and Didi Chuxing as “TMD”.

TouTiao not only grabbed the business of traditional news portals, but also grabbed part of Baidu’s business by earning over 10 billion yuan through ads business in 2016, as many analysts believed. It seems that TouTiao is indeed getting closer and closer to internet giants.

A respondent from Amemv revealed to TMTPost that an internet giant among BAT approached Amemv on matters of acquisition recently, but was refused by Zhang Yiming. “After all, Amemv is nurtured by TouTiao. How can TouTiao bear that?” the respondent explained.

In an interview with Finance magazine, Zhang already publicly attacked Baidu. Today, however, it seems that TouTiao has eyed on Tencent, the most highly valued internet company in the Chinese internet world, through its strategic products.

Last year, TouTiao APP already attempted to keep up with Tencent News APP, while Tencent also purchased KuaiBao to fight back. After Tencent invested in Kuaishou APP, TouTiao followed suit, nurtured short video APPs including Amemv and Moutain short Video and acquired American UGC-based short video platform Flipagram.

“In fact, TouTiao has always identified with the path of Tencent, and a little bit with Huawei”, Zhang said, “Tencent cares a great deal if users are willing to stay inside Tencent’s ecosystem.”

Last July, it was rumored that Tencent was to invest in TouTiao. However, Zhang denied the rumor and declared that “he founded TouTiao not to become Tencent’s employee.”

In an interview with CCTV program “Dialogue”, Zhang claimed that TouTiao would never take sides among BAT. “It would make more sense to grow big by ourselves. After all, TouTiao has its own ambitions,” he said.

“The dominance of BAT should be broken long ago… From the perspective of business model, TouTiao has been a borderless platform since its establishment,” Liu Zhen, former head of UberChina, said after joining TouTiao and publicly declared that it was likely TouTiao could break the dominance of BAT.

In this sense, if Toutiao released a “behemoth” game project based on its broad user base one day, it would come as no surprise.

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[The article is published and edited with authorization from the author @Li Chengcheng please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.