Many people see the issue very one-sidedly.
For example, if you see a store doing good business, you may think that the owner must have made a lot of money. In fact, it is very likely that the store is just breaking even, or even cannot make ends meet.
For another example, if you see something purchased for 50 cents and sold for 1.5 cents, you will feel that the boss has a terrifying profit of 200%.
In fact, all businesses have many sunk costs.
Why are there not many video websites, and most of them died on the way
It's because the bandwidth cost of video websites is almost unbelievably expensive. Bandwidth is not broadband, not the 100M broadband or 500M broadband that users have at home. Bandwidth is the total amount of data transmission by the server per unit time.
Equivalent to the water supply main pipeline of a residential area.
If there are only 1,000 households in a community and the peak water consumption per household is 50 ml per second, then the carrying capacity of the water supply pipeline must not be less than 50,000 ml per second, which means that 50 liters of water must be supplied per second.
If the supply capacity is higher than this number, there is no problem, but if it is lower than this number, the water supply of all users will be affected, and there will be less water output, slow water output, and unstable water output.
This is the same as website card.
Sometimes, your own Internet speed is very fast, but when you access a certain website or a certain APP, it is stuck.
At this time, don't think that there is a problem with your network or router. It is most likely that the water supply line over there has exceeded its carrying capacity. Even if your home pipeline can take in one ton of water per second, the other party can get it to you. There is only one drop per second, so you can only watch helplessly.
Therefore, if a website wants to provide stable services and experience, it must ensure that its bandwidth is greater than user needs.
If it is a MB bandwidth, it means that the server can transmit one MB of data per second.
If it is a novel website, when a user visits a text-based page, the average bandwidth usage per second per person may only be a few KB. Therefore, 1 MB of bandwidth can carry hundreds of visits.
However, if it is a video website, one user may occupy 1MB per second. If there are one million people, the bandwidth requirement is about 1TB, which means the bandwidth must support the transmission of 1024G of data per second.
This fee is beyond imagination, at least 20 to 30 million a month.
If you switch to websites like Youku and iQiyi, the bandwidth cost will be higher.
iQiyi’s financial report shows that since 2018, their annual cost of bandwidth has exceeded 2 billion yuan, and it is still increasing.
In addition to the bandwidth cost of 2 billion yuan, there are also content procurement and production costs of 4 to 5 billion yuan or more. Coupled with operating a huge team, the cost may be tens or tens of billions a year.
Most of the tens of billions of costs are sunk costs, just like a cross-sea bridge. The piers tens to hundreds of meters high are sunk in the sea water. Most people ignore the project costs under the sea water.
Just like people who don't understand the Internet, they may not be able to see the huge sunk cost behind a video website like iQiyi. Instead, they will jump in and scold them because they need to pay for membership content. They feel that such a company is too heartless. I watched a show on your platform, and you asked me to become a member.
In fact, the sunk costs of the Internet industry are far higher than ordinary people imagine.
Otherwise, how could Wang Sicong's Panda die
When ordinary people look at Panda’s business model, they may never imagine how this thing could be losing money
Wang Sicong brings his own traffic, so he can save a lot of advertising fees;
The anchor’s income must be shared with the platform. When the anchor earns 50 cents, the platform also earns at least 50 cents;
A few top celebrities require very high signing fees, but most of them not only bring their own traffic, but also drive user consumption, so the platform as a whole will not lose money, or not much.
So why is such a big company so cool
This is because bandwidth costs tens of millions a month and hundreds of millions a year, and they are losing money every year. They are losing money to the point where they need to constantly find new capital to invest in blood supply. Severe patients with severe bleeding and hospitalized in ICU will no longer be willing to invest once they have no capital. It is equivalent to losing the plasma supply, and the heart will stop beating immediately.
The reason why Xu Yiyang talked so much to his roommates was so that they could understand this truth.
Don't, don't feel bad just because you see website ads that can be sold for money, and feel that you didn't let them play and made a lot of money.
In fact, it’s still early for this damn thing to make money. In the early stage, it will continue to burn money until the scale is large enough.
Fortunately, everyone can understand this truth, and they all have a grateful heart.
Later, Xu Yiyang received the restaurant address from the other party, and said to several people: "Let's go to this restaurant after class in the afternoon, conduct a field inspection, and try their taste. If it tastes good, the ingredients If it’s good and the environment is good, then I’ll put ads on it. If it’s not good, I won’t accept the ads so as not to deceive users.”
Xu Yiyang feels that building a website is like doing training, and you must have a conscience.
A training institution with a conscience, while making money, will definitely try every means to let its students learn something, while a training institution without a conscience, just make money, it is best not to come to the class after you pay the money;
A conscientious website should also consider its users while advertising.
Not only do we think of everything for them, but at least we can't harm them.
And a website that has no conscience is only interested in making money through advertising.
Even if he knows that a private hospital that treats cancer may not even be able to cure colds, he will still recommend this hospital to cancer patients as long as he pays more.
Even if he knows that a certain chess and card game is a money trap and may bankrupt players, he will still advertise the game as long as the money is large.
But Xu Yiyang would never let himself embark on such a profit-seeking path.
Therefore, he felt that he must first go to this restaurant to have a look and try it. If it is really good, he would recommend it to the users on the forum.
These days, not many people are willing to spend thirty yuan to eat at a buffet. If they try it after seeing an advertisement, they are probably on a date as a couple, having a dinner with classmates, or simply want to have a good meal. It is unlikely that they are just casual. The mentality of just finding a place to pay for a meal.
If this restaurant does poorly in all aspects, it will not only cause a psychological gap for them, but also cause additional psychological harm.
…
After class in the afternoon, the seven of them went to the Old John Western-style buffet restaurant near Jiaotong University. Xu Yiyang even brought the low-pixel digital camera with him.
From the outside, the restaurant is indeed very large, and the decoration is relatively high-end. It can accommodate at least a hundred people dining at the same time.
But it's almost six o'clock now, it's time for dinner, but the business in the store is very average.
Xu Yiyang counted through the window and found that there were not as many people eating as there were waiters.
With this number of customers, this store will lose one or two thousand yuan a day, including rent, labor and equipment, at least.
A middle-aged man who looked like a restaurant manager was overjoyed when he saw seven college students at the door looking in through the window. He trotted out and said with a smile: "Guys, do you want to have a meal? You can try it." Try our buffet, Orleans grilled chicken wings and legs, American fried chicken..."
Xu Yiyang smiled and said: "Sorry, we are from the New Century Forum. Let's see Manager Liu."
"That's me! Are you Mr. Xu?" The other party greeted him hurriedly with a smile, and then suddenly felt a little disappointed, probably because he realized that the seven of them were not customers who came to eat.
Xu Yiyang smiled slightly and said, "Yes, I am the person in charge of the website."
As he spoke, he added: "Actually, we came here to try your food first. If the overall quality is good, we will accept your advertisement."
The other party immediately said: "Come on, come inside and invite me, I'll treat you to this meal today."
Xu Yiyang smiled and said: "No, we will pay for it at our own expense today."
After entering the store, Xu Yiyang went to the bar to pay. Manager Liu tried to stop him, but Xu Yiyang had already handed the cashier the exact amount of 210 yuan.
Manager Liu said sheepishly: "Look at you, how can you come to the store and ask for your own money to eat?"
Xu Yiyang smiled and said: "If we cooperate happily, you can treat us to dinner again."
With that said, Xu Yiyang said again: "Manager Liu, go and do your work first, don't worry about us."
Manager Liu hurriedly said: "Okay, the food pick-up area, beverage and fruit area are all inside, you can do it yourself!"
Xu Yiyang chose a large table, and then he called everyone to get their meals. To his surprise, none of the six people had ever eaten at the buffet, and they didn't know how to proceed.
So Xu Yiyang said: "You can eat and drink at the buffet. Everyone just go over there and bring a plate if you see what you want to eat. You can have anything."
Saying that, Xu Yiyang added: "Although you can eat whatever you want, don't waste it. You can take a little less first, and then take it if you don't have enough."
Chen Meng asked: "Brother Xu, can you just take it casually?"
Xu Yiyang nodded: "Get what you want!"
"Okay!" Several boys rushed out at once.
This restaurant mostly serves American fast food, with a full range of chicken products, as well as pork chops, American barbecue, various pizzas, sausages, breads, and desserts.
In addition, there are also a wide variety of fruits. Xu Yiyang deliberately bought a little of each kind and found that they were all quite fresh.
The drinks are all made from drink machines, and the taste is no different from KFC or McDonald's. However, it is a bit lighter than the bottled ones, which is normal.
Everyone took some food each and piled it on the table, which looked very rich. Xu Yiyang specially took a few photos, and then everyone started to get upset.
After tasting many types of food, Xu Yiyang felt that the taste of this restaurant was quite good, at least worthy of the price of thirty yuan.
As for why business is not good, it may be because the publicity is not good enough, or it may be because consumers do not see the specific types of products, but are simply scared away by the price and feel that the price of 30 yuan is too expensive.
Therefore, at this time, it is necessary to make a more detailed advertisement on powerful channels. Once consumers understand what they can get in exchange for thirty yuan, they will be willing to try it.
Thinking of this, Xu Yiyang decided to accept the restaurant's advertisement and try it out to see how strong the conversion ability of the New Century Forum was.
(End of chapter)