Chapter 77: The Rebellion of Human Nature

Before Gu Cheng crossed over, in his previous world, many historians had reconstructed the early days of the online gaming boom at the turn of the century.

“Legend” broke out from among its peers—not so much a victory of gameplay or quality, but a triumph of marketing.

When Chen Tianqiao, in an era without Alipay, rolled out a “net café owner recharge agent system” nationwide, and lured net café owners into promoting his game with hefty commissions, he had already won.

Online gaming is a highly herd-driven, coercive industry; its pleasure comes from social sharing. Once a game establishes its flag and proves to the world that—if you level up, gear up, and dominate within this game—you can gain real-life social bragging rights, then the game’s quality and graphics become irrelevant.

Countless players will swarm into the game, spreading it like a virus. They’re no longer paying for the game itself, but for the chance to show off. The reason people spend more on online games than single-player ones is precisely this difference.

Even twenty years later, if two identical single-player games are listed for paid download in an app store, with the sole difference that one includes a “share results to Weibo/Facebook” button, the version with the sharing feature will outsell the other tenfold.

“According to Maslow’s hierarchy of needs, once material life is relatively rich, showing off becomes the main driving force for human progress.”

Everyone understood this in later generations. But in 2001, few did.

Gu Cheng was one; Chen Tianqiao was another; Ma Teng barely counted as well. Unfortunately, the latter two lacked Gu Cheng’s opportunities and resources.

Moreover, Gu Cheng’s ambitions were greater, his vision sharper. Because he understood the pulse of the age, he could move faster than Chen Tianqiao in certain niche areas where boldness paid off.

The “primitive version of Alipay” in his hands was already performing to its fullest potential.

...

By late June, Pan Jieying had finally finished her exams and could enjoy the leisure of summer, ready to throw herself back into her cousin’s business.

Since Gu Cheng’s last press conference, Pan Jieying had been absent from company affairs for about two weeks, completely absorbed in her finals and thesis defense—after all, she was just a first-year MBA student.

Those two weeks had Gu Cheng run ragged. He was wholly focused on business, personally handling countless trivial management tasks, living the mundane life of a white-collar worker, with not a moment’s leisure for the “poetry and distance” he once dreamed of.

So when Pan Jieying reappeared at the office door, Gu Cheng felt as though he’d seen his savior. He rushed forward and hugged her tightly: “Sis, you’re finally back. If you didn’t come back soon, I’d have died of mundanity.”

“Now you know you can’t do without me? Now you appreciate how hard I work? Let’s see if you dare ignore my advice next time!” Pan Jieying replied with a hint of pride, savoring the feeling of being needed by family. Once she’d had enough, she barked orders, “Alright, give me a rundown of the past two weeks’ operations. I’ll take care of the mess from here.”

Gu Cheng hurriedly produced a stack of messy reports, giving his cousin a rough overview:

“The game company is running as usual, no issues. Our concurrent users have surpassed 150,000 and are steadily growing. We have 1.6 million active, paying users.

On Dingdang.com, after involving net café owners in the rebate channel, we sold 540,000 copies of the ‘Meteor Shower’ album in just half a month. Second place is Jay Zhou’s ‘JAY,’ with 370,000 sold in the first half of this year; third is Jolin Tsai, who recently returned, with 160,000 sold.

Moreover, in these two weeks, about thirty independent musicians and singers without distribution channels or agents have sold albums on Dingdang.com. The highest sold 40,000 copies, the lowest a few thousand. Their combined sales exceed 500,000 copies, bringing in over ten million yuan.

Including official film and TV disc sales, Dingdang.com’s online revenue this month reached 40 million yuan, with a gross profit of 10 million. Factoring in the effects of hunger marketing in the first half and the new piracy channels and lack of hot releases in the latter half, we estimate total annual sales will reach 150 million yuan, with a gross profit of 30 million.”

Pan Jieying studied the reports carefully, thought a moment, and sensed something amiss. She asked, “Forty million in June, but only 150 million for the rest of the year? That’s a steep decline. What’s this ‘new piracy channel’ you mentioned?”

Gu Cheng gave a wry smile: “Many net café owners aren’t satisfied with five yuan per album—they feel sales aren’t picking up. Most net cafés in first- and second-tier cities where we rolled out our agent recharge points are seeing a drop in legitimate album sales. I’ve seen that many are now also selling pirated discs.

Only niche independent music escapes piracy, since their consumer base is too scattered for pirates to bother. Anyone selling over ten thousand legitimate albums per month is being pirated. As for net café owners, if twenty or more people ask about a disc each month, they’ll judge it worth pirating and contact suppliers.”

Pan Jieying was stunned for several seconds, deeply struck by the darkness of human nature. It took her a while to accept this reality.

Truly, greed knows no bounds. Without Dingdang.com establishing this e-commerce channel, building fame, and enabling payment, net café owners wouldn’t have had this side income from selling audio-visual products.

Yet reality is stark: according to Dingdang.com’s market research, “selling twenty discs a month, or having twenty inquiries,” almost determines whether a net café owner will reach out to local disc pirates.

In first- and second-tier cities, with higher incomes and consumption, a net café might cover five or six hundred people who can afford legitimate audio-visual products—so these owners took the plunge first. Gu Cheng estimates that, by the end of summer vacation at the latest, all major city net cafés’ popular album markets will be hit by piracy, with legitimate sales expected to drop by eighty percent. Only niche music selling fewer than twenty discs per month will survive.

In third- and fourth-tier cities, where hot album sales are lower, more musicians’ works will survive, escaping pirates’ attention. But Gu Cheng predicts that by next year, his own albums, as well as those of Jay Zhou and Jolin Tsai, won’t be safe.

All they’ll be able to do in the future is rush to sell new releases ahead of the pirates’ disc production and packaging cycles—since in the CD piracy era, pirates needed time to operate.

Once 2003 arrives and MP3 downloads become widespread, even that brief window disappears. Legitimate music will face the fierce impact of “pirated MP3s going live the same day as official releases.”

...

“No matter what, even though we’re making far less, at least we’re ‘robbing the rich to give to the poor.’ Those musicians who could only make a few thousand or tens of thousands per album now have a way to earn a living. That’s partial fulfillment of your dream,” Pan Jieying said, digesting the situation, and then teasing her cousin, “Those who qualify to be pirated are just you and Jay Zhou—the ‘fat cats.’”

“Alright, I don’t consider that much consolation,” Gu Cheng replied, half amused, deciding to move on. “Sometimes I think—since net café owners in big cities are so greedy and unreliable, the channel system we set up is bound to become obsolete sooner or later. I estimate it won’t last more than two years. That’s why I believe it’s time to implement the next phase of ‘Alipay’—and I need you to oversee this fully during the summer.”

“Go ahead, tell me what to do.” Pan Jieying smiled warmly, accepting the task without even asking for details.

Gu Cheng opened his computer, pulled up a proposal, and pointed it out to his cousin. “Chen Shoufu and Sister Wen still haven’t managed to develop the security guard, so we can’t release physical address binding this year. But not enabling physical address binding for payments doesn’t mean we can’t promote Alipay to ordinary users.

Here’s my plan: next, we’ll open a download channel for the new, revised ‘Alipay’ on Dingdang.com or Legend Entertainment’s official website. But after installation, registration for a payment account will require verification of ID, bound bank card, and real-name mobile phone card, as well as obtaining the MAC address of the user’s usual hardware device. Once we bind it on the server side, they can use it. That way, we’re safe from account theft.

And I hear that next year, China Merchants Bank will launch its first online banking and U-Key test version, with other commercial banks likely to follow in 2003 and 2004. If we start laying the groundwork now, we’ll be ahead of the curve when unbinding MAC addresses becomes possible. Most of the profits from Legend Entertainment and Dingdang.com can be invested in promoting this system.”

Pan Jieying’s eyes sparkled; lately, she’d learned a lot about internet business from her cousin and quickly spotted a problem. “If you force ordinary users to bind their MAC address, isn’t it only suitable for those with home computers, especially laptops? People who go online at net cafés or use work computers will hardly be able to use our new Alipay.”

“That can’t be helped. Online payment services must always prioritize security. Since our current technology is only suitable for laptop users, we’ll target that group first. I asked Li Guoqing—when he started Dangdang.com with no distribution channels, he still had 500,000 book buyers. China is huge; there are plenty of passionate enthusiasts. Our Alipay foundation is stronger, so we’ll take it slow—no big deal.”

Slow and steady wins the race. Take too big a step, and you risk stumbling.

Pan Jieying thought it over and accepted her cousin’s plan: this year, they’d focus on users nationwide with personal laptops, using various means to bring them into the Alipay system. Even if only a million users are gained in the second half of the year, so what?

Pioneers always have it tough.