Research On The Profit Model Of Video Sharing Websites-Based On The Basic Formula "Revenue-Cost"

Since April,2005when the first domestic video sharing websitewww.tudou.com made public, in only short five years, video sharing websites inChina have experienced venture capital favor, horizontal competition, copyrightdisputes, copyright costs soaring, license storm, bandwidth cost pressure, thecompetition from gateway websites and TV organizations and homemade play boom.Video websites industry now also begins to enter the mature stage of development.The pattern of the whole video websites market is clear and video sharing websites isalready in leading position.Despite the rapid development and users’ vast scale (as of2011, video internetusers have reached325,000,000), so far, the whole industry still relies advertisementincome, although they themselves and scholars are trying to explore new profit model.And with regard to the cost of bandwidth and content, industry in the whole is in loss.This paper firstly analyzes the development situation of video websites industry fromboth the microcosmic and macroscopic perspective. Macroscopically, this paperpresents the development situation of video internet from user scale, market size,market pattern and seven years’development history of the industry. Microcosmically,the author does some statistical and comparative analysis of business performancefrom2007to2011of the three listed video sharing internet and other listed internetindustries.Secondly, this paper analyzes the profit model of video sharing websites from thecontent angle, constructs its industry chain based on above study and analyzes profitdifficulty due to profit distribution unbalance. Finally, according to the profitdistribution situation in the industry chain,this paper, based on the basic formula ofprofit model revenue-cost, proposes customized graphic and content for mobileusers, video search cooperation, and customized advertisement cooperation, andcomes up with strategies like setting up joint purchase and joint broadcast platform inorder to further increase and expand the existing revenue source, make effectivecontrol of the costs, win profit distribution and make a profit as soon as possible.The innovations in this paper are as below: first, summarize the developmentsituation of video internet, collect and sort out the2012newest monitoring and report statistic of video sharing internet from the market research organizations, whichmakes this paper more updated and objective; second, this paper has done somestatistical and comparative analysis of business performance from2007to2011ofChina internet service industries listed in America and Hong Kong, fully showing thegeneral development situation of China’s internet service industries and the distinctivefeatures in video internet’s five year’s development; third, from the perspective ofcontent and fund, construct video sharing internet industry chain and analyze profitdistribution dilemma that the internet faces in industry chain, then based on thisknowledge, put forward corresponding strategies from revenue source and cost.