Summary of Key Points
Shenzhen's Huoke Culture Media has achieved annual revenues of over 1 billion yuan through an "industrialized IP creation + anxiety-driven marketing" strategy, surpassing competitors like Boshang and Getdou in scale. However, this success comes at the cost of numerous user complaints (false advertising and difficult refunds). The company's model involves selecting high-profitable areas (such as AI traffic and academic planning) to package its instructors, using short videos to tap into users' anxiety, followed by low-priced courses in live streams and further sales through private messaging platforms. This approach is not an isolated case, revealing common issues in the knowledge payment industry: a focus on marketing over content, targeting anxious consumers, and a gray area in regulation that makes it difficult for users to seek redress. In the long run, this model is unsustainable due to low repurchase rates, rising traffic costs, and exhausted reputations. The industry must return to the value of its content.
The Secret to 1 Billion Yuan in Revenue: A "Precise Harvesting" Assembly Line
The company's profits do not come from its content but from a well-structured "course-selling" process:
1. Step One: Using Short Videos to Trigger Anxiety
They produce large quantities of 15-30 second videos that directly address users' concerns—telling bosses that they should invest in AI traffic now, parents that neglecting programming education for their children will put them at a disadvantage, and middle-class individuals that failing to manage their assets will lead to financial loss. These videos use free offers and trial courses as bait to lure users into live streams or add them on WeChat.
2. Step Two: Converting Visitors with Low-Price Courses in Live Streams
The company replicates traditional sales tactics, first amplifying users' anxiety (e.g., "Ordinary people can still succeed") and then presenting common business wisdom as "exclusive methodologies." When users are emotionally invested, they are offered low-priced courses for 9.9 or 19.9 yuan, with limited quantities available (e.g., only 20 spots left) to create a sense of urgency and drive purchases.
3. Step Three: Further Sales through Private Messaging Platforms
Users who purchase the low-price courses are added to WeChat groups where operators share success stories and additional content to maintain their anxiety, eventually leading them to more expensive system courses or offline executive training programs for high-net-worth individuals. The entire process is carefully orchestrated.
The Root of the Complaints: False Advertising and Discrepancy Between Promises and Delivery
Behind the impressive revenue are numerous user complaints, mainly due to two issues:
1. Discrepancy Between Promotion and Actual Product
Users expect to learn from top instructors or receive personalized guidance, but often find that the actual instructors are unrecognizable assistants, and the so-called "customized plans" are merely copied templates. High-priced support services also fail to meet expectations.
2. **Refund Policies That Are More Aggressive than "Overbearing Terms"
Salespeople promise full refunds, but when users request them, the company uses legal agreements to deduct 30% of the fee or prolongs the review process (e.g., waiting 30 days), leaving users with no choice but to accept the situation.
3. Separation of IP and Service Delivery
The company separates IP creation (e.g., hiring popular speakers like Zhang Qi) from content delivery, with the latter handled by younger instructors or assistants. Users pay for the reputation of the IP but receive subpar services, which is the main source of complaints.
Industry-Wide Issues: High Traffic Costs, Targeting Anxious Consumers, and Difficulties in Seeking Redress
This company's tactics are representative of the entire knowledge payment industry:
1. Inverted Traffic Costs: Content Becomes a Secondary Priority
The cost of acquiring traffic is increasing, with most funds going towards buying it (e.g., advertising on short videos), leaving little for course development. To cover costs, prices are raised, and more aggressive marketing tactics are used, creating a vicious cycle where marketing expenses rise, content quality declines, and user dissatisfaction increases.
2. Targeting Two Types of Anxious Consumers
The industry focuses on two groups:
- Small business owners/entrepreneurs who fear losing their businesses and are willing to pay for growth strategies or high-end networking opportunities, only to find that these services are ineffective.
- Middle-class parents who worry about their children's education and pay for basic online courses with little practical value from AI-based solutions.
3. Lack of Effective Regulation
Many companies operate under labels like "culture media" or "consulting services," avoiding educational regulations. False advertising is often verbal or part of live stream scripts, and outcomes are hard to quantify, making it difficult for users to seek compensation.
Long-Term Challenges: A Short-Sighted Business Model
The revenue growth driven by anxiety is unsustainable:
1. Low Repurchase Rates
Users who experience poor service are unlikely to repurchase and may discourage others from buying the company's products. To maintain revenue, companies must continuously attract new customers and spend more on traffic, leading to increasing costs. Once expenses exceed income, the model collapses (similar to the early financial literacy courses that peaked in revenue but soon declined).
2. Poor Quality Over Good: The Survival of the Fittest
Companies skilled at marketing thrive, while those focused on quality content struggle due to high traffic costs. This leads to a negative perception of the industry, with many considering knowledge payment as a form of "intellectual taxation."
3. The Need for a Return to Content Value
Some companies that focus on quality content and build strong reputations (e.g., children's programming or professional skills) achieve higher repurchase rates. This shows that users are willing to pay for valuable information, not just for fabricated anxiety-inducing tactics.
Conclusion
The company's 1 billion yuan in revenue is based on exploiting societal anxieties for quick profits. However, such models will eventually fail as consumers become more discerning and regulations tighten. The essence of knowledge payment is value—users want content that solves real problems, not manufactured anxiety. Only by focusing on quality content and providing meaningful services can the industry thrive.