jav.hk VIP: The Price of Business Promise

On August 15, 2024, jav.hk officially announced that in order to thank users for their support, users on the site can receive permanent VIP members for free. The news exploded in the circle-not because of generosity, but because of the weight of the promise. On the Internet, the word "permanent" may be less valuable than a VIP card.

QKPFX0 Cost promised by QK: Who is paying for "permanent"?

"Permanent" is not a technical issue, it is a business issue. Technically, a permanent VIP is nothing more than a database record, a Boolean value, and a few lines of code. But commercially, behind this is an unlimited check, and the one signing is not the user, but the platform itself.

Let's do some calculations. Assuming that jav.hk's current DAU is 500,000 (conservatively estimated, it may actually be higher), and the annual VIP membership fee is 200 yuan. If these 500,000 people all cash in on permanent VIPs, the platform's annual loss of cash flow will be 100 million yuan. This is just a static account. If users grow in the future, this number will expand exponentially. More importantly, this 100 million yuan is not a one-time cost, but a "silent cost" that is spent every year-the platform must continue to provide servers, bandwidth, operation and maintenance, customer service, and may even face the pressure of updating copyright content.

This is just a superficial cost. The more hidden cost is opportunity cost . When the platform invests resources into maintaining permanent VIP, it means giving up other possibilities-such as developing new features, improving user experience, and even transforming. The average life span of an Internet company is only 15 years, and the definition of "permanent" may be longer than the life span of a company. When you promise "permanent," you are trading future flexibility for today's user growth.

QKPFX1 Endorsement of QK Promises: Leverage of Credit

In Internet commerce, credit is the cheapest leverage. In a word "permanent", the cost is almost zero, but the revenue may be the growth of millions of users. This set of gameplay has long been common:

• In 2013 , Netease Cloud Music launched a "permanently free" cloud disk service, attracting a large number of users. In 2018, Netease closed the service on the grounds of "copyright compliance," causing strong dissatisfaction among users.
• In 2015 , Baidu Cloud (now Baidu NetDisk) launched a "permanently free" 2T space, which was gradually tightened and eventually became "exclusive to members."
• In 2016 , Xunlei launched "permanent membership". As a result, in 2019, renewal was stopped on the grounds of "technology upgrade", and users could only purchase it again.

What these cases have in common is: The fulfillment period of commitments is much longer than the company's strategic cycle . Internet companies 'strategic adjustments are usually quarterly or annual, while the definition of "permanent" can last for decades. When strategy and commitment conflict, commitment often becomes a victim.

But the case of jav.hk is different. It is not a listed company, has no shareholder pressure, and has no short-term performance constraints. In theory, it can fulfill its promises more "willfully". But that's the problem: When a company has no external constraints, its promises are less credible . Because there is no guarantee that it won't change its mind tomorrow-maybe it's because the founder leaves, maybe it's because of a policy change, maybe it's because of a transformation of the business model.

Zhang in ### Data Center

I know an engineer who does IDC operation and maintenance, Lao Zhang. A few years ago, his company promised a major customer "free custody for life" on condition that the customer pay a one-time fee for 10 years. At that time, the company's boss thought it would be cost-effective: if he got 10 years 'worth of money, he would talk about future matters in the future.

It was a good deal at first. Lao Zhang's company used the money to expand the computer room, recruit people, and even gave employees year-end bonuses. But five years later, things changed. Electricity bills have increased, labor costs have increased, and customers 'business volume has also increased-originally only one cabinet was needed, but now five are needed. The boss began to regret his original promise. He approached his client and said that "lifetime" might need to be redefined, for example,"lifetime" refers to "the duration of the company."

The customer refused. They have included "lifetime free" in their promotional materials and even used this promise to attract investment. The two sides quarreled for several months and finally broke up on bad terms. The customer withdrew business and Lao Zhang's company also lost a large order. To make matters worse, the matter spread in the industry, and other customers began to doubt whether Lao Zhang's company's promises were reliable. Lao Zhang later said to me: "Promises are easy to say but difficult to take back. If I hadn't been so impulsive at the beginning, life would be much better now. "

Anyway, Lao Zhang's company is still good. At least they are still operating and have a chance to remedy it. If a company goes bankrupt, a "permanent" promise really becomes a "permanent" regret.

QKPFX6 The paradox of QK's promise: Why is the more generous, the less trustworthy?

Here's a counterintuitive paradox: In the business world, the more generous a promise, the less credible it is. Because behind generosity, there is often greater uncertainty hidden.

1. The motives for generous promises are questionable . When a company suddenly declares "permanent free" or "lifetime membership," the market's first reaction is not "This company is so nice" but "Why is it doing this? "。Possible explanations include:

   • short-term development: Attract users with generous promises, and then monetize them through other means in the future (such as advertising, value-added services).
   • Competitive Strategy: In a highly competitive market, use promises to suppress opponents.
   • capital chain problem: The company may be in urgent need of cash flow and exchange promises for advance payments from users.
   • Exit Strategy: The founder may be paving the way for an exit, stabilizing users with promises, and then selling the company.

   Either motivation means that there are more complex calculations behind the commitment. And the more calculations, the less credible the promise becomes.

2. The cost of generous promises is opaque . What users see is "free" or "permanent", but they don't see the cost structure behind it. For example, if a cloud storage company promises "permanently free 1T of space," users will find it a good deal. But if the company's cost structure is 0.1 yuan per GB per month, then 1T of space will cost 1200 yuan per year. If the company does not have a stable source of revenue, sooner or later this promise will collapse.

3. Fulfilling generous promises depends on uncertainty in the future . "Permanent" means that the company must fulfill its commitments indefinitely in the future, which is full of uncertainty:

   • Technology Changes: For example, the cost of cloud storage may be significantly reduced due to technological advances, but it may also soar due to policy changes.
   • business model changes: Companies may switch from To C to To B, or from a free model to a paid model.
   • founder change: If the founder leaves or the company is acquired, new management may not recognize old commitments.
   • policy risks: For example, certain countries may suddenly ban certain types of services, making promises unfulfilled.

   When the fulfillment of promises relies on so much uncertainty, users naturally wonder: Can the company really stick to it?

QKPFX18 Alternatives to QK's Promise: Sustainable Trust Mechanisms

Since "permanent" commitments are not commercially sustainable, are there a better alternative? The answer is: Replace verbal commitments with mechanism design .

1. Transparent cost disclosure . Instead of promising "free forever," it's better to tell users the cost structure. For example,"Our server cost is 0.1 yuan per GB per month, and the bandwidth cost is 0.05 yuan per GB. We promise not to increase prices in the next 5 years, and we will give 6 months 'notice in advance for the part that exceeds 5 years. "This way, users can assess risks and companies have room for adjustment.

2. Phased commitment . For example,"We promise to provide free services in the next three years, and adjust it based on market conditions after three years. "This kind of commitment is more credible because the company can flexibly adjust based on actual conditions.

3. Trust Fund . Companies can establish an independent trust fund specifically used to fulfill long-term commitments. For example, putting part of the income into a fund ensures that the fund can continue to fulfill its commitments even if the company fails. This mechanism is common in the insurance industry, but rare in the Internet industry.

4. User co-governance . Involve users in the company's decision-making process, such as setting up user committees to vote on major decisions. In this way, even if the company wants to change its commitment, it needs to obtain the consent of the user.

QKPFX23 The sociology of QK's promise: Why do we always believe in "permanence"?

Humans are inherently fond of certainty. In a world full of uncertainty,"permanent" commitments give us a false sense of security. This psychology is infinitely amplified in Internet business:

1. Anchoring effect . When users first see "permanent free", this promise will become the "anchor" in their hearts. Even if the company adjusts its policies later, users will feel "lost" because they are accustomed to "permanent" expectations.

2. Sunken Cost Fallacy . Users may have invested time, data or money on the platform. When a company wants to change its promise, users will feel that "I have already given so much, and it cannot be in vain," making it more difficult to accept the change.

3. herd mentality . When one company launches a "permanent" commitment, other companies follow suit to compete. When users see that everyone is promising "permanent", they will think that this is the industry standard and ignore the risks behind it.

4. Short-termism . Both users and companies tend to focus on short-term interests. Users think of "free now" and the company thinks of "new now." Both sides ignore the long-term consequences.

This psychology is vividly demonstrated in the case of jav.hk When users see "permanent VIP", their first reaction is "earned" and ignore the risks behind them. When the platform sees user growth, its first reaction is "success" and ignores future costs. Both sides are driven by short-term interests and ignore long-term costs.

QKPFX28 The price of QK's promise: The other side of efficiencyism

The core logic of Internet business is efficiency. Get the most benefits at the minimum cost. Under this logic, a "permanent" commitment is an anti-efficient behavior-it sacrifices future flexibility for today's growth.

But efficiencyism also has a price. When all companies pursue efficiency, trust becomes scarce. Users no longer believe in promises, and companies no longer value credibility. Eventually, the entire business ecosystem will become more short-sighted and utilitarian.

The case of jav.hk reminds us: While pursuing efficiency, we cannot ignore the value of trust . Trust is the cornerstone of business, and commitment is the carrier of trust. When promises become cheap, so does trust.

Perhaps we need to rethink the meaning of business commitments. Rather than pursuing "permanence", it is better to pursue "sustainability." Instead of exchanging promises for short-term growth, it is better to exchange trust for long-term value.

Because in the final analysis, the essence of business is not transactions, but relationships. The foundation of relationships is trust.