In the early morning of May 21st, Beijing time, the funny headline (Nasdaq: QTT) today released its first fiscal quarter earnings report for the fiscal year ending March 31. The report shows that the first quarter of the first quarter of the company's net loss was RMB 688.2 million (US$102.5 million), compared with a net loss of RMB 302.6 million in the same period last year, and the loss increased by 127.4% year-on-year.
The price of the interesting headline also fell to $5 on May 20, the lowest since listing. At the same time, the interesting headline announced that the original CEO Li Lei will no longer serve as the CEO of the company for personal reasons, but will still retain the directorship and concurrently serve as the vice chairman, and the founder and chairman Tan Siliang will take over the post of CEO.
Observing the pattern of interesting headlines, its operation is like the current blockchain products, especially the design of economic system, similar to many blockchain information products. Therefore, many blockchain practitioners regard the interesting headline model as the first "sentinel" for the application of blockchain. On September 14, 2018, when the headline was listed, there was an article that was considered a victory for the blockchain model.
However, the continued losses seem to indicate that the products of the previous blockchain era were not so successful.
Interesting headline and blockchain relationship
In June 2016, the fun headline was launched. As an information platform, the funny headline brings a very different economic distribution mechanism.
The distribution mechanism of the portal era information platform is: advertisers will pay advertising fees to information platforms, such as Sina News, Tencent News and other portal news websites. These platforms will leave most of their income in their own bodies. Of course, in order to solve copyright problems, these platforms will also purchase content, but they are all talking about one company, and there is no model for achieving industry-wide consensus. Content providers with weaker strengths will not receive revenue.
Later, the WeChat public account, today's headlines, and Baijiahao established an incentive plan for the creators to give the revenue creators the content creators from the advertisers.
(Cartography: Interchain Pulse)
It's worth noting that these products also share revenue, but no one has tied it to the blockchain. The reason is that the mechanism of “mining” is still unclear and there is no “consensus”. The amount of income distribution depends on the platform.
The fun headline creates a new model in which the advertiser’s money is given to the platform and the platform is returned to the reader.
(Cartography: Mutual Chain Pulse) Unlike other information products, the fun headline has a complex accounting mechanism to determine how much incentives are given to readers and is relatively transparent. The reader knows how much incentives he or she can get.
The fun headline gives readers an incentive bookkeeping symbol called “gold coins”. Gold coins come from a variety of “mining” operations, including reading, mining, active mining, sharing, mining, comment mining, and using interesting head products. Mining and so on.
Many of the mining behaviors are very similar to many native blockchain social media, such as the well-known foreign Steemit, the coin world developed by the domestic team, the Netease circle, the currency, etc., all use a lot of behavior records to achieve "virtual currency". distribution.
"Virtual currency" is recorded in a blockchain, which is a "cryptocurrency" that can realize a transaction of a certain value. In the fun headline model, the virtual currency of the issue, the "gold coin" and the platform's advertising revenue, are anchored.
As shown in the following figure, in addition to the different ways of accounting, the interesting headline and other blockchain media platforms seem to be no different. And relying on the credit of the headlines (the investors behind Tencent, Xiaomi, People's Network), their trust mechanism can maintain their operations without the need for blockchain.
(tabulation: interchain pulse)
The idea of interesting headlines is wonderful: to get users through incentives – to get advertising revenue through users – to reward users with advertising revenue. A perfect closed loop.
However, the headlines are facing the depreciation of gold coins.
Before the listing last year, the exchange rate of the interesting head gold coins and the RMB was 1 yuan = 1,500 to 1600 gold coins. In just half a year, the gold coins depreciated to 1 yuan = 10,000 gold coins.
The perfect closed loop is likely to evolve into a vicious circle: by motivating users – by advertising revenue from users – advertisers find that advertising ROI returns are low – reducing advertising revenue – reducing user incentives – user churn.
From the first quarter report, the user growth rate has slowed down. From the third quarter of 2018, the growth rate of 69% was down to 21.4% in the first quarter of this year.
In fact, in order to maintain this cycle, the fun headline uses the money of the financing to motivate the user, thus causing the situation of the first quarterly report mentioned at the beginning of the article – the loss is expanding.
It can be said that the interesting headline is an era of pre-blockchain era, and an innovative attempt by the centralized organization to use the "pass-through economy" thinking. The current results are not ideal.
But this provides a lot of inspiration for the project parties that are building the “pass-through economy”.
First of all, blockchain practitioners place high expectations on the “pass-through economy” because they can credibly establish the common interests of shareholders (employees), employees (producers), and users (consumers) through “pass-through”. Production relations (blockchain is the origin of technology that changes production relations).
Interesting headlines bind the interests of shareholders and users, but unfortunately, the interests of content producers are not taken care of, so when it comes to interesting headlines, advertisers often judge that the quality of their content is not very good. According to some advertisers to introduce the pulse of the chain, the funny headline can bring a very good CPC conversion rate, but it is difficult to bring actual consumption, because the user of the interesting headline is for the incentive, not the real concern. “The user of the headline is to make money, not to spend money.”
Secondly, the distribution and exchange ratio of the interesting head gold coins is relatively random, resulting in more serious inflation.
Finally, it is also the core of the problem – the production relations created by the interesting headlines have gone wrong. The fun headline treats the original consumer as a producer. A media product, the reader is its consumer. For example, in the age of paper media, readers need to buy newspapers and magazines. Even in the Internet era, the Internet companies use wool to pay for the dog to pay for the book, but the readers exchange their information for free. The essence is still consumers.
The fun headline model is to make readers a “flow producer”, stimulating readers to pull traffic and reward work. The readers who are rewarded are naturally not content consumers, and the advertisers who are interested in headlines need to place advertisements based on content, which is a contradiction in itself.
Returning to the “pass-through economy” of the blockchain, when designing the incentive mechanism, the project side needs to consider the division of labor of production relations and the source of value of the certificate of anchoring, in addition to economics and currency banking.
In fact, the media day survives in a simple trading relationship, which is the direct transaction of content value. As a value Internet, the blockchain can realize the content of content value and the advertising value. Advertising value can be solved with an advertising chain, without the need for media participation, and the realization of media value does not require advertising.
The author's ideal blockchain + media should be the following model:
(Cartography: Inter-Chain Pulse) The core work of the platform is to help readers find the content they need and help content creators find the right readers.
Author: Mutual chain pulse commentator Yuan yet
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