Author | Huang Yu Editor | Liu Baodan Last year, thanks to the success of the "Speeding" on iQiyi, the company has had a difficult time recently. On the one hand, the explosively popular TV series is on hiatus, and on the other hand, the derivative concert of the variety show "Plant Some Goodness" has been criticized for "free offline but paid online." According to Wall Street News, the second Wheat Field Music Festival, produced by iQiyi's reality show "Plant Some Goodness," was held on June 6th. Some viewers had previously received free offline tickets through official activities, while online viewers, even iQiyi members, had to pay RMB 12 for viewing, and the viewing period was valid until June 14th. This differentiated pricing model has caused dissatisfaction among many viewers, who question that iQiyi's move is "cutting corners." In response, iQiyi's customer service said, "You can buy tickets to watch the concert live according to your own needs, and the edited content of the concert will be launched on the main platform in the future." In fact, this is not the first time that long video platforms represented by iQiyi have been accused of "cutting corners." In recent years, membership grading systems, early access, and inventory restrictions have often caused user backlash, in addition to paying extra for derivative programs. The differential pricing model reflects the growth anxiety faced by long-form video platforms such as "i优腾."

The weather is good today Today's weather is good.

NetEase has recently been unrestful.

After uncovering two corruption cases in the gaming business earlier this month, on November 25, NetEase Games and another flagship business - NetEase Cloud Music, both ran into trouble.

On the same day, NetEase Cloud Music, acting as the 'plaintiff,' posted a long image accusing QQ Music of plagiarism on their official Weibo account. They claimed that QQ Music copied its music player's 'DIY function,' and has been copying NetEase Cloud Music for years, demanding that QQ Music immediately cease its ongoing plagiarism-style 'innovation,' borrowing-style 'creativity,' and follow-style 'updates.'

Although QQ Music did not personally respond, KuGou Music, which also belongs to Tencent Music Entertainment Group like QQ Music, responded on Weibo: 'Wasn't it me who first did the DIY feature for customizing the player background? I even hosted a DIY player contest, what kind of innovation is mine?' KuGou Music also attached a video released in October 2023 introducing the custom player feature.

The public opinion is not trending in favor of Netease Cloud Music's development direction. As the "plaintiff", Netease Cloud Music has been directly targeted by many users for issues like "lack of copyright".

In the end, this farce concludes with Netease Cloud Music reflecting on the situation. In response to dissatisfaction with issues like copyright experience, Netease Cloud Music replied to users in the Xiaohongshu's comment section, stating that they are intensifying efforts to continuously expand the copyright library, and mentioned "We deeply understand that positive changes take time".

As one wave subsides, another rises. On the afternoon of November 25th, news emerged that several employees of Netease Games' Thunderfire Business Group were being dealt with.

The reason behind this is that recently, some players reported receiving promotional text messages from Netease Games' "Revelation", stating "The company leaders are all gone, I distribute benefits and no one manages".

Netease Thunderfire stated that the employees involved have been fined and given warnings. "After investigation, it was found that the sending of this message was a series of negligent acts by some employees and managers of Netease Thunderfire's Marketing Department, which seriously violated Netease's corporate operating principles, triggered negative social feedback, and caused significant damage to the company's image".

This series of events all reflect a common issue, which is that Netease is facing pressure for business performance growth.

In the entire past year, Netease's revenue crossed the trillion mark for the first time, with a year-on-year increase of 7.2% to 103.468 billion yuan; the net income attributable to Netease's shareholders was 29.417 billion yuan, a year-on-year growth of 44.6%.

At the same time, thanks to the outstanding performance of the mobile games "Egg Party" and "Revelation" last year, Netease's stock price rose against the trend, quietly surpassing Meituan by the end of last year, becoming the fourth largest internet company in China by market cap. Netease's founder and CEO, Ding Lei, also saw a significant increase in his net worth as a result.

"Silent riches". This is the most significant label given to Ding Lei by the outside world last year.

However, Netease and Ding Lei's glory did not continue into 2024. Since the beginning of this year, Netease has entered a period of low growth in performance. In the third quarter, Netease achieved net income of 26.2 billion yuan, a year-on-year decrease of 3.9%; net profit attributable to the company's shareholders was 6.5 billion yuan, a year-on-year decrease of 16.67%.

Gaming is Netease's flagship business. In the third quarter, Netease's net revenue from games and related value-added services was 20.9 billion yuan, a 4% decrease year-on-year. Among them, due to the decrease in revenue from "Egg Party" and "Swords of Legends Online", Netease's mobile game revenue fell by 10% year-on-year in the third quarter.

During the earnings conference, Ding Lei stated, "'Egg Party' is still one of Netease's products with the highest DAU (Daily Active Users), although currently facing some commercial challenges. However, this is an accumulation of experience in the process of operation and development, this type of game is unique in the market. We believe that with the release of long-term content, this product will still achieve long-term development and realize its commercial value."

As for Netease Cloud Music, in the third quarter it achieved net income of 2 billion yuan, flat with the previous quarter and the same period last year, but profitability continued to improve, with gross profit increasing by 22.12% year-on-year to 0.655 billion yuan, mainly due to the increase in subscription revenue and improved cost control.

Netease Cloud Music, which has been reducing costs and improving efficiency, also encountered some troubles. On August 19th, 'Netease Cloud Music crashed' trended, as many users found abnormal login issues with the message 'Failed to retrieve data.'

In fact, Netease Cloud Music has always faced 'profit pressure'. After years of losses, Netease Cloud Music further strengthened its membership commercialization last year, generating revenue of 7.9 billion yuan last year, achieving annual profit for the first time. This is closely related to reducing costs and improving efficiency.

How to maintain a balance between profit pressure and expanding the content library in the future has always been the biggest challenge facing Netease Cloud Music.

Whether it's gaming or music, Netease is facing fierce market competition. In order to avoid becoming a "laggard," it is necessary to take more powerful measures.