"This can work?"
Cook was somewhat questioning his life choices.
Xingyi Sky Technology's move was really too wild, wasn't it?
The Head of Customer Service Department nodded,
"It can. And many users also need those two annual memberships. The original price is 360, giving it to them for 300, they usually won't make a fuss."
Cook frowned slightly,
"There are always some people who don't need two annual memberships, right? Or only need one?"
The Head of Customer Service sighed,
"For those who don't need it, they can still sell it to others for 250 yuan. With a package that adds 300, selling it back for 250 means only losing fifty, and they similarly won't make a fuss."
Cook fell silent: "..."
Then he laughed,
"Wang Yi, Wang Yi, you really are something else. You pulled off a disguised price reduction, not only did your sales go up, but our sales are stagnant, and users aren't even making a fuss. Amazing, truly amazing! I admire you!"
The Vice President also had a complicated expression,
"Wang Yi, this person, his actions are still so meticulous, incredible, truly incredible. But with a disguised price reduction, they'll also earn 300 yuan less."
Cook, however, waved his hand,
"That's not necessarily true. Even with a 300 price reduction, the current xphone 1 is more profitable than when it first launched."
Simply put, as of now, the BOM cost of xphone 1 has decreased by about 40% compared to the first batch.
The total cost of xphone 1, including R&D, marketing, channel, and other expenses, also decreased from the previous 1500 to 1000.
Even with a direct drop of 300, the profit is still 200 more than initially.
This is the price advantage in the later stage of the industrial chain.
In his previous life, Lei Bus relied on this rule to make a fortune.
When costs were high and profits were low initially, he shipped less and used hunger marketing.
Later, component costs decreased, total costs significantly dropped, profits were high, then he shipped frantically and made huge profits!
Moreover, for Wang Yi, as long as he could crush the iPhone 4s, xphone 1 making a bit less profit was fine.
Furthermore, users who needed Xingyi Sky Video annual membership and Xingyi Sky Music annual membership would continue to spend money to activate them, or directly purchase membership packages.
It can be said that this wave of price reduction was not a big loss for Xingyi Sky Technology, but it's hard to say for Apple.
After all, they are truly reducing prices!
More importantly, the plummeting sales and revenue led to both Apple's stock price and market value plummeting.
This impact was naturally even more severe.
The Head of Customer Service changed the subject,
"Chairman, how should we respond to our customers in Xia Guo? For users who purchased iPhone 4s for 4988 in the past week or half month, should we refund them a 500 difference?"
"Refund the difference?" Cook coldly smiled, "No refund. This precedent cannot be set. Once it is, all subsequent ones will have to be refunded, and that would be troublesome."
"But they'll make a fuss, defend their rights..."
"Let them make a fuss as they please. It's not your first day at Apple. Apple only makes the products we want to make, and it's impossible to compromise with users!"
"Yes!"
The subordinate replied, his expression somewhat complicated.
Without a doubt, Apple's situation was going from bad to worse, while Xingyi Sky Technology was experiencing double blessings.
On the 22nd, Wang Yi received a call from CCTV Director Meng:
"Chairman Wang, after our discussions, we are, in principle, willing to reach a strategic cooperation with Xingyi Sky Technology. However, for the specific details, we still need you to come over, and we can discuss them carefully."
"No problem, we're also close."
"How about tomorrow morning then?"
"Okay."
Wang Yi agreed.
Xingyi Sky TV was poised for launch in the second half of the year.
Resolving the OTT license issue in advance would ensure they were prepared for any eventuality.
The next day, Wang Yi arrived at CCTV Headquarters and met with several executives:
"Welcome, Chairman Wang. We hope to have a win-win cooperation in the future."
Wang Yi smiled and shook hands with them,
"Of course. Our cooperation can not only be win-win, but also set a precedent and provide a model for the OTT cooperation model!"
"Right, Chairman Wang is truly farsighted and so attentive to the OTT license; others are dismissive of it!"
Wang Yi understood the underlying meaning.
OTT licenses restrict the TV end of video platforms, which many platforms find quite resistant to and are not proactive about.
Instead, they all launched their own unlicensed TV-end APPs.
This also led to slow progress.
In his previous life, it wasn't until September 2014 that all TV-end apps were taken down.
After all, the major platforms didn't want to share a portion of their hard-earned membership fees with others.
Wang Yi sighed,
"I don't know how it will be implemented in the end. It's also uncertain if other platforms will cooperate. But Xingyi Sky Video will be a platform that abides by the rules."
Rather than stubbornly resisting to the end, it's better to plan ahead and seize the greatest benefits.
"Haha, with Chairman Wang's words, we are relieved."
The executives exchanged glances and all breathed a sigh of relief.
They were also worried that Wang Yi, like other platforms, would stubbornly resist to the end.
"You and Director Meng have already discussed the relevant matters of the previous cooperation, so let's get straight to the point."
Director Yang smiled and said,
"CCTV Headquarters and Xingyi Sky Video will each invest 50 million to establish a joint venture company to operate internet TV, each holding 50% of the shares."
"Subsequently, Xingyi Sky Video will develop a TV-end Xingyi Sky Video APP, which will be operated by the joint venture company. CCTV Headquarters will provide the OTT license and broadcast control, and Xingyi Sky Video will provide internet video content and technical support."
"Of the membership revenue from the TV end, half goes to Xingyi Sky Video, and half goes to the joint venture company. Of course, since Xingyi Sky Technology holds half of the shares in the joint venture company, you can actually take 75%!"
"Furthermore, Xingyi Sky Technology contributed more, so both the name of the joint venture company and the video name will be decided by Xingyi Sky Technology!"
Xingyi Sky Technology provides all the video content and technical support, while CCTV Headquarters only provides a license and gets 25% of the TV membership revenue for free.
Such cooperation seems somewhat unfair.
But there was no alternative.
A total of 7 OTT licenses, all of them priceless treasures.
Without a license, it would have to be taken down after September 2014, and Xingyi Sky Video would not be able to log in to the TV end.
In fact, the cooperation in his previous life also followed this method.
For membership revenue from the TV end, the OTT license holder could take half simply by virtue of the license!
Fortunately, Wang Yi and CCTV Headquarters formed a joint venture company, holding half the shares, only then could he take 75%.
Otherwise, it would only be 50%.
Of course, the membership revenue from the mobile and PC ends still belonged to Xingyi Sky Technology and had nothing to do with CCTV Headquarters.
Wang Yi nodded,
"I have no objections. As for the joint venture company, let's call it Galaxy Internet TV Co., Ltd. The Xingyi Sky Video TV end will be called Galaxy Video. The slogan will be: 'Galaxy is brilliant, spending good times together.'"
"'Galaxy is brilliant, spending good times together!'" Director Yang nodded, "Good, that's the one!"
Wang Yi, however, recalled a problem,
"We will develop the Galaxy Video APP as soon as possible, and it's estimated to be launched in the second half of the year. The price of TV-end video membership will definitely have to be higher than the mobile end, but it can't be too much higher."
Director Meng nodded,
"That's right. After all, our license holder also needs to get a portion of the membership fees. If it's the same price as the mobile end, you'll lose a lot of money. So, it will be 10 yuan more expensive per month, 120 yuan more expensive per year."
"This price is reasonable,"
Wang Yi said with a smile:
"Additionally, we can launch a terminal revenue sharing model later. Our competitors also have many TV video software, which will also seize a lot of market share. But if other brands of TVs, such as Hisense TV, can also have Galaxy Video directly built into their UI interface, like Xingyi Sky TV, then we will have more users, and revenue will be higher.
Members opened through Hisense TV channels can share 10% of the profit with Hisense! Of course, Galaxy Video members opened through other channels, or brands without built-in Galaxy Video, will not require sharing."
Director Yang nodded,
"No problem. One more brand with built-in Galaxy Video means millions more potential users. Sharing 10% of the profit with the TV brand is absolutely fine!"
The others also had no objections.
To get brands like Hisense and Skyworth to also have Galaxy Video built-in, they would have to share 10% of the membership revenue with them.
Otherwise, why would they build it in for you?
The two parties discussed some more details, and then jointly signed the agreement, reaching a cooperation agreement.
Xingyi Sky Video on mobile is 180 yuan per year, and Galaxy Video on TV is 300 yuan per year.
If a member is brought by a certain brand of TV with built-in Galaxy Video service, the TV brand takes 10%, which is 30 yuan.
Xingyi Sky Video and Galaxy Company evenly split the remaining 90%, which is 135 yuan.
Of course, Xingyi Sky Video also has 50% shares in Galaxy Company, so it can get another 67.5 yuan, meaning Xingyi Sky Video can take 202.5 yuan in total.
CCTV Headquarters, by virtue of the license, directly takes 67.5 yuan.
If it's a Galaxy Video member opened through Xingyi Sky TV, Xingyi Sky TV also gets a 30 yuan terminal fee, making it 232.5 yuan.
Of course, these are membership revenues under ideal conditions.
In reality, all of them need to offer discount promotions.
For example, the original price for Xingyi Sky Video annual membership is 180 yuan, with regular promotions at 168 yuan, continuous annual package at 160 yuan, and major promotions at 150 yuan.
Similarly, Galaxy Video also has regular promotions at 288 yuan, continuous annual package at 268 yuan, and major promotions at 258 yuan.
Calculated this way, the money Xingyi Sky Video can get is only around 170 yuan.
After deducting film and television production costs, copyright purchase costs, and technical service costs, there isn't much profit.
The 10% shared with TV brands and the 22.5% shared with CCTV Headquarters are all free gains, incurring no losses at all!
Of course, the cooperation with the CCTV OTT license holder was purely for being prepared.
When Xingyi Sky TV is released in the second half of the year, in addition to the built-in Galaxy Video, it will still retain the Xingyi Sky Video TV end launched last year.
The Xingyi Sky Video membership at 180 yuan per year and the Galaxy Video membership on the TV end at 300 yuan per year are not interchangeable.
However, the Xingyi Sky Video TV version launched at the end of last year is interchangeable with mobile-end membership, completely negating the need to share revenue with CCTV Headquarters, and only costs 150-180 yuan per year.
Simply put, these days iQiyi, Youku, and Tencent Video are all unlicensed, and they all launched their respective TV versions, so the money earned all belongs to the video platform itself.
It won't be until September 2014, when SARFT cracks down, that all iQiyi TV, Youku TV, etc., will be taken down, and licensed compliant OTT video applications like Galaxy Qiyiguo and Kumião will be launched.
By then, the price of TV-end membership will have to double and soar, from 180 to over 300, as half must go to the OTT license holder.
But before September 2014, it wasn't a big problem.
To put it bluntly, these few years are still a transitional period.
When the transitional period ends, new standards will apply.
Wang Yi is now cooperating with CCTV Headquarters, securing the OTT license, and launching Galaxy Video, which is merely a precaution.
The Xingyi Sky Video TV version, which is universal with mobile-end membership, will still continue to be retained.
Simply put, if Xingyi Sky Video doesn't do this, Galaxy Video, with a VIP fee of 300 yuan, simply cannot compete with iQiyi TV and Youku TV at 180 yuan.
To put it bluntly, during the transitional period, Xingyi Sky Video TV end and mobile end share one membership, costing only 150-180 per year.
Two years later, when Xingyi Sky Video TV is taken down, only Galaxy Video at 300 a year will remain.
These are unavoidable circumstances.
By then, when Xingyi Sky Video TV, iQiyi TV, and Youku TV are collectively taken down, users will understand what's happening and won't blame Xingyi Sky Technology.
But if the Xingyi Sky Video TV end is taken down now, and only Galaxy Video at 300 a year is launched, with the TV end no longer supporting Xingyi Sky Video membership, that would be big trouble.
Wang Yi could be cursed to death by users, especially if the two-year memberships given as gifts couldn't be used on TV; he would truly be cursed to death.
Wang Yi would not take this risk.
He would rather follow iQiyi, Youku, Tencent Video, and other competitors, honestly transition without a license together, and wait for 2014!
Regarding this, CCTV Headquarters also understood that iQiyi, Youku, and Tencent Video all had TV ends priced at 180 yuan, so they also couldn't force Wang Yi to take down the Xingyi Sky Video TV end.
Unless SARFT takes action and takes them all down at once.
Before iQiyi, Youku, and Tencent Video are taken down, the Xingyi Sky Video TV version naturally won't be automatically taken down, crippling itself.
These are all matters of course.
After the signing was complete, Xingyi Sky Technology's employees would liaison with CCTV Headquarters for subsequent cooperation matters.
Wang Yi, meanwhile, started drinking tea with the directors.
"Oh, right, Chairman Wang, we can also cooperate in terms of IP rights,"
Director Meng said with a smile.
Director Yang nodded,
"That's right, we are very optimistic about your 'Xia Lan.' The annual weekly update format is not very suitable for satellite TV, but your first season is almost finished, right?"
Wang Yi nodded,
"'Xia Lan' started weekly updates on December 3rd, with three episodes in the first week, and one episode per week thereafter. So far, nearly 20 episodes have been aired. The first season has a total of 26 episodes, all of which have been completed.
If CCTV airs it in April, with one episode per day, the first season will conclude in just under a month. Our Xingyi Sky Video will also finish the first season at roughly the same pace, continuing with annual updates for the second season."
Director Yang nodded,
"That works. Sell us the exclusive broadcast rights for the first season. For this high-quality animation's satellite TV premiere, 26 episodes, how about 15 million for you?"
26 episodes for 15 million, a copyright fee of 577,000 per episode.
This price is considered high at the moment.
After all, an animated episode is less than 20 minutes, half the length of a TV drama.
Moreover, remaking the first season of Xia Lan only cost 10 million!
CCTV giving 15 million is considered breaking even and making a profit.
And in the future, they can operate on small profits but quick turnover.
Since CCTV has bought the copyright for the first season of "Xia Lan," other satellite TV stations might also be tempted!
Wang Yi nodded,
"Since Director Yang has spoken, then 15 million for the first season!"
"Great!"
Director Yang was in a great mood.
Generally, this type of animation doesn't warrant such a high price, at most 200,000 per episode.
But there was no alternative.
"Xia Lan" was too well-produced, and the cost of remaking it was 400,000 per episode.
Coupled with its huge success in online viewership and popularity across the entire network, after CCTV airs it, viewership wouldn't be low, and profits from endorsement and title sponsorship advertisements would be substantial.
CCTV was even embarrassed to offer 400,000, so they settled on a unit price of 577,000.
"As for 'Qin's Moon,' we can discuss it after you've finished remaking the first season."
"Okay."
Wang Yi replied.
As for "Grandmaster of Demonic Cultivation," the directors didn't mention it at all.
Just this name alone meant it couldn't be aired on CCTV, nor on satellite TV.
Wang Yi sighed inwardly.
If he had known earlier, he would have changed the name, missing out on hundreds of millions...
Director Meng changed the subject,
"Your variety show 'The Masked Singer' is excellent, and CCTV is also very optimistic about it. We plan to introduce it. How about 50 million for the first round of satellite TV broadcast rights?"
Wang Yi pondered for a moment.
The cost of "The Masked Singer" was approximately 50 million, so selling it to CCTV for 50 million would cover costs, but wouldn't make a profit.
Unless it's sold to other satellite TV stations as well!
Or sell it to CCTV for 80 million for exclusive broadcast, but that's not very likely.
It's better to continue selling to other satellite TV stations.
He simply said,
"Okay."
Producing one animation and one variety show at once, with a net profit of 65 million, covered all costs and even made a slight profit.
Of course, with subsequent exclusive online broadcasts on Xingyi Sky Video, advertising sponsorships alone could bring in a huge fortune.
The membership revenue generated would also be pure profit.
With such extremely popular animation and variety shows, it's impossible to lose money.
The same was true for CCTV.
Having acquired it for 50 million, CCTV advertisements alone could earn even more.
Extremely high viewership ratings were all free gains.
Similarly, one major reason Wang Yi sold the copyrights to CCTV was also to leverage CCTV's endorsement.
With CCTV's endorsement, viewership ratings and advertising sponsorships wouldn't be bad; on the contrary, they would be formidable.
Furthermore, with CCTV purchasing the copyright for "The Masked Singer," other satellite TV stations might also follow suit and buy it!
Moreover, CCTV would also have many high-quality self-produced dramas, and Xingyi Sky Video could purchase the exclusive online broadcast rights for these dramas in the future.
The benefits of the cooperation between the two parties outweighed the drawbacks.
Two days later, news reports caused a nationwide sensation.
[Xingyi Sky Video and CCTV Headquarters strategically cooperate, forming a joint venture, Galaxy Internet TV Co., Ltd., which will jointly operate OTT licenses and create Galaxy Video!]
[CCTV Headquarters and Xingyi Sky Video form a powerful collaboration, becoming a new benchmark for OTT.]
[Xingyi Sky Video strongly teams up with CCTV Headquarters to operate OTT, iQiyi tragically eliminated.]
[Joining hands with Xingyi Sky Video and abandoning iQiyi, even CCTV Headquarters felt that iQiyi had no future.]
Looking at these news reports, Ma Yuanming, acting CEO of iQiyi, was burning with rage:
"We were talking so well with CCTV Headquarters, almost signing the contract, but Xingyi Sky Video intercepted us! Really, they actually did it!"
"This Wang Yi guy is increasingly having no bottom line in his actions! Dammit!"
"Even snatching the OTT license from us!"
"There are a total of 7 OTT license holders, who else could he not find? Did he have to snatch ours? He's just going against us!"
A subordinate hurriedly comforted him,
"CEO, it's not a big deal. There are still 6 license holders, we can choose to cooperate with other license holders."
"This isn't a cooperation issue!" Ma Yuanming was burning with rage, "If it was just snatching the license, that would be fine. But look at what those news reports are saying? They're saying our iQiyi was tragically eliminated, eliminated by Xingyi Sky Video, saying we are not as good as Xingyi Sky Video, saying we are no good, have no future!"
"The harm isn't great, but the insult is extremely strong!"
The subordinate suddenly realized,
"So that's how it is. Once consumers also think so, and also feel our iQiyi is not as good as Xingyi Sky Video, they will abandon iQiyi and switch to Xingyi Sky Video. This would lead to a plummet in iQiyi memberships and a sharp decline in users. That would be extremely insulting and extremely damaging!"
The corners of Ma Yuanming's mouth twitched: "..."
For a moment, he didn't know what to say.
What he said was truly heartbreaking, but also very reasonable.
"It's over, Chairman Li isn't going to scold me again, is he?"
Ma Yuanming's expression changed drastically.
As soon as this thought occurred to him, the phone rang.
Ma Yuanming sighed and quickly answered.
From the other end came Li Yan's cold voice:
"Useless! An OTT license was snatched away by Xingyi Sky Video, you really are useless!"
Ma Yuanming opened his mouth, speechless: "..."
"You, you, come to headquarters as soon as possible!"
"Yes, Chairman Li!"
Ma Yuanming sighed, and could only act quickly.
In the distance, the demoted Sun Yu coldly smiled,
"Serves him right, Ma. Do you really think you'll be comfortable after replacing me as iQiyi CEO?"
"Aren't you just like me, constantly getting hit hard by Xingyi Sky Video and scolded by Chairman Li, hahaha!"
Upon this thought, Sun Yu was in a great mood, his mentality balanced.
"Luckily there's Ma Yuanming, otherwise I'd be the one getting scolded again."
"But Lin Dong has already gone in, how long can you, Ma Yuanming, still last?"
"Being demoted to head of development department is also quite nice."
Sun Yu hummed a tune, and carrying his coffee, started his leisurely time.
He could even tease the new front desk girl a bit when he had nothing to do, finding joy in it.
At the company, Sun Yu became a special case.
The former iQiyi CEO, now the head of the development department, he became the most special one at iQiyi under such a change.
That evening, Wang Yi returned to Lin Shu's home.
Originally, Wang Yi had planned to return to Jizhou in the next few days to prepare for the new product launch event.
But he was delayed due to the CCTV OTT matter.
Now that these were done, it was time to return to Jizhou.
"Xiao Shu, I have to go back to Jizhou tomorrow. You should rest well at home. I'll come back after I'm done."
Lin Shu wrapped her arms around Wang Yi's arm and smiled sweetly,
"It's fine, Xiao Yi. Your career is important. 'Zhen Huan Zhuan' is airing tomorrow, so while you're not in the Imperial Capital these days, I'll watch 'Zhen Huan Zhuan' at home!"
"Right, 'Zhen Huan Zhuan' airs tomorrow evening." Wang Yi remembered, "But it's agreed, you can only watch, no crying, okay?"
"No way, I'm very strong."
Lin Shu clenched her small fists.
Wang Yi laughed involuntarily,
"Let's hope so."
Dramas like "Zhen Huan Zhuan" are indeed good, but also truly heart-wrenching, especially for girls; not a small number of them cry profusely.
"Brother doesn't believe me!" Lin Shu pouted, "If you're afraid I'll cry, then come back sooner. Xiao Shu is used to waking up every day to Brother's hug!"
As she spoke, Lin Shu's whole body was buried in Wang Yi's arms.
Originally, she had lived in a villa by herself since freshman year of college, very strong and independent.
But ever since she had Wang Yi, she became less strong, less independent.
Instead, she liked to be clingy with Wang Yi every day, with goodnight kisses and good morning hugs...
Girls at this age are most youthful and beautiful, and also most innocent and romantic.
Unlike the girls Wang Yi encountered later in his previous life, no matter what, money talked.
If they argued, a transfer of 1314 would fix it.
If it got serious, buying a bag would settle things.
Although it was easy to handle, it was genuinely uninteresting.
Lin Shu was better, the most essential, purest love, not even involving money.
After all, when they first met, Wang Yi was not the current Chairman Wang, but just a high school senior who had just finished his college entrance exam, still studying for his driver's license, and hadn't even started selling surplus shoes.
And Lin Shu was a rich little lady worth hundreds of millions.
It can be said that Lin Shu's affection for Wang Yi did not contain any impurities.
It was precisely for this reason that Wang Yi did not rush things with Lin Shu.
Instead, he patiently waited until she was willing.
"Okay, Xiao Shu, I'll come back as soon as possible after I'm done with the press conference!"
Wang Yi picked up Lin Shu and placed her on his lap.
Their eyes met, with no superfluous words, only deep affectionate lingering.
The next day, Wang Yi slept until he woke up naturally, then set off, heading straight for Jizhou!
This time, the new product launch event was held in Jizhou, at Meiyou Science and Technology Park!
(End of Chapter)