Why did Xiaomi's biggest investment give Iqiyi?

Xiaomi had the first place for the “battering ceremony” of 1 billion dollars prepared by Chen Hao: the iQiyi and Youku Tudou websites of the first echelon of the video.
People close to the transaction revealed to me that Baidu’s wholly-owned iQIYI was the first time to introduce heavyweight shareholders. Xiaomi’s investment amount was approximately US$300 million. Baidu, the largest shareholder of iQIYI, also added about the same amount. Magnitude investment.

It is worth noting that the amount of about 300 million US dollars in the shares of Iqiyi, this is the largest amount of investment in the four years since the establishment of millet. Why did you give iQiyi?

In contrast to iQIYI's strategic stake, Xiaomi will purchase Youku stocks in the secondary market. The amount is expected to be in the tens of millions of US dollars. Both transactions will be officially announced in the near future.

Under the pressure of content constraints and radio and television regulatory storms, Xiaomi's "dream of the living room" once twisted. Now that Iqiyi and Youku Tudou have joined together, this has given Chen Yu, who has just set up a “military order” to use millet for more than half a year to make “overwhelming” changes in TVs and boxes on video-end products. Emboldened.

Content industry "life and death"

In fact, the two investments were basically finalized before Chen Hao entered Xiaomi. In October of this year, Baidu Department “Dinglu Central Plains” and “Lei Jun Department” Beijing Wali were involved in the planned increase of 2 billion in China’s film and television programs this year. The cooperation between Baiyi Department of iQIYI and Lei Jun Department of Xiaomi may have been “premeditated”. ".

It is worth noting that the amount of about 300 million US dollars in the shares of Iqiyi, this is the largest amount of investment in the four years since the establishment of millet. Why did you give iQiyi?

This time from when Chen Hao joined Xiaomi, Xiaomi Chairman Lei Jun’s words were revealed. He said that the entire content industry is a matter of life and death for Xiaomi TV, Xiaomi Box, and Xiaomi Mobile Phone, including the Xiaomi Tablet. “Otherwise, we work on such a good TV, but our content is not rich enough, then the consumer complaints are very large. Therefore, solving the content issue has become an impending problem for Xiaomi.”

Behind this, Xiaomi's "dream of the living room" once twisted.

When the millet box was first launched, it was immediately suspended by the General Administration of Radio, Film and Television (SARFT) for a license issue. After that, it found the licensee CNTV to be “back to life”.

It also hit the "gunshot" of pirated broadcasts. Last year and this year, Xiaomi was once infringed by Hunan Satellite TV, Youku Tudou and LeTV. For example, last year Youku Tudou Group sued the Haidian District Court for allegedly infringing on the 10 repertoires of the millet box, and asked the millet box to immediately stop the infringement, publicly apologize, and compensate 5.1 million yuan.

Although the amount of compensation in these lawsuits is not large, it poses a serious problem to Xiaomi. Assuming there is no content support for the millet box and TV, then it will change back to traditional TV and the market will be weak. Especially in the video site structure has been basically established, coupled with the broadcasting sector issued a series of regulatory documents on television box violations of strict supervision, if there is no support for millet video content, it is difficult to make a difference in the box and television, The ecology of millet is also difficult to run.

"Internet companies need to find their own points of contention on the basis of ensuring that content does not violate rules." Internet commentator Hong Bo said that Chen Hao had a balance between the primary experience of content control or a balance between the two.

After finding the right person to take charge of the content, a huge amount of video content resources and Internet TV licenses have become an important goal for Xiaomi to invest in iQIYI and Youku Tudou.

Behind Xiaomi’s stocks, there is still a bigger piece of chess. Perhaps Baidu also intends to invest in Xiaomi. Xiaomi’s shareholding in Iqiyi may be just a move between Baidu and Xiaomi.

Intensified video competition

After investing in iQIYI and Youku, Xiaomi obtained the most abundant video content in China and obtained the license.

From the perspective of licenses, in July 2012, iQiyi, together with the Central People's Broadcasting Station and Jiangsu TV Station, jointly established Galaxy Connect. This year, Youku also bought 50 million yuan shares in the Guangdong side of the licensee's country, and the curve received the license. After the shares of iQIYI and Youku, it means that Xiaomi has more “insurance” in terms of licenses and less detours.

From the perspective of video content resources, regardless of iQIYI and Youku, the layout of the upstream and downstream sections of the film and television industry chain is not slow.

iQIYI's investment in the 2014 "Tugao Style" can be seen as follows: 200 million yuan to buy variety show and guarantee the end of 300 million yuan investment in self-control. The iQiyi 2015 marketing conference also announced four major super-screen dramas being shot, including a single episode of 5 million investment "Tomb Notes." Not long ago, iQiyi and Huace Film and Television jointly invested in the establishment of Huazei Qiyi Film and Television Co., Ltd., which aims to provide iQIII with high-quality and diverse Internet content, including content related to IP. Develop games, e-commerce and other full-scale derivatives.

In the 8 years of development of Youku, from video sites to applications and online video platforms, from UGC, PGC to home-made content and then to the establishment of Uni-Pictures this year, the goal is also to open up the value chain in the film industry, with O2O The idea is to build a multi-screen culture and entertainment ecosystem.

After investing in iQIYI and Youku, Xiaomi’s advantage in the mobile internet field and the third-largest mobile phone sales in the world will also bring iQIYI and Youku a small dividend.

The main part of this investment transaction is Xiaomi and iQiyi. Xiaomi will also give iQiyi “priority support” in terms of mobile content recommendation. After the transaction is completed, Xiaomi, as a major shareholder of iQIYI, is also likely to love iQiyi. Incorporate millet ecological chain. The influence of MIUI users with nearly 100 million Xiaomi, China's number one and the world's third largest mobile phone makers will directly determine the pattern of the mobile video market.

In addition, Xiaomi's other partner, Youku Tudou, has taken huge amounts of money from the Dutch copyright owner to win the "The VoiceKids" program model copyright. On the TV side, this program will be in the Xiaomi box, Xiaomi TV, etc. The terminal broadcasts in exclusive, in exchange for taking advantage of Xiaomi’s shares in the premium soil, to ensure that Uniland’s exposure in this transaction. Eventually, Xiaomi also formed a small amount of stocks to soothe the Yutu and Youku cup “millet porridge”.

But at the same time, it can be imagined that with Xiaomi's investment, the competition between the first echelon iQIYI and Youku Tudou will change from copyright resources to homemade content to multi-screen terminal layout. More intense.