Author | Hao Xin

Editor | Wu Xianzhi

"For just 50 cents per video, you won't get cheated. We're all friends here, so come and get 66 inspiration points for free!"

Kuaishou's Kelin has become an AI application that thrives both domestically and internationally. During its peak internal testing phase, hundreds of thousands of people lined up in China, while overseas users begged for a "Chinese account". According to Kuaishou, since its launch in June 2024, Kelin AI has served over 5 million users.

Cheng Yixiao pointed out in the Q3 2024 financial report that "Kelin reached over 1.5 million monthly active users in September."

According to Similarweb, an international web analytics tool, among AI video products during the same period, Kelin's traffic growth was rapid. As of September 24th, Kelin's total visits reached 33.7 million, surpassing Runway (31.34 million) and Pika (7.52 million), which had been launched earlier.

(Image source: Similarweb)

However, this success is inseparable from Kuaishou's aggressive marketing strategy. According to "Silicon Valley AI News", "Hash Growth" was one of the driving forces behind Kelin's international expansion, helping it advertise on multiple overseas media platforms such as X, YouTube, and Newsletter.

From June 24th to September 24th, Kuaishou conducted large-scale advertising campaigns overseas with keywords like "King ai", "King", and "Kingai". The CPC (Cost Per Click) for its paid search has reached the top level in this field. According to Similarweb's estimates, Kelin's overseas advertising expenses amounted to approximately $332,000 (about RMB 2.324 million) over three months. In comparison, Pika, a startup in the same period, only spent $255,000, which is one-ninth of Kelin's expense.

(Image source: Similarweb)

With Kuaishou's aggressive spending pace, it may be difficult for other AI video startups to keep up. Relying on overseas advertising, Kuaishou quickly initiated a paid model and offered discounts to attract users.

Cheng Yixiao stated, "Kelin AI's monthly commercial revenue exceeds RMB 10 million, and we are confident in achieving rapid growth in revenue next year."

The breakdown of this calculation is as follows: millions of marketing expenses, tens of millions of revenue, billions of model training costs, and video generation costs of over RMB 1,000 per video.

Faced with Douyin's strong competition, Kuaishou has played its trump card with Kelin. Like domestic AI applications, exchanging quantity for quantity will ultimately hurt itself. Returning to Kuaishou itself, it still needs to prove to the market that large models and AI can make a significant impact on its next quarterly financial report.

Kelin: The "Pinduoduo" of AI Videos

The outside world has labeled ByteDance as an "AI application factory", and Kuaishou has also accumulated many AI applications.

At the model level, ByteDance and Kuaishou mainly focus on audio and video. ByteDance has the general large language model "Doubao", while Kuaishou has "Kuaiyi"; for image generation, ByteDance has "SDXL-Lighting" and "ResAdapter", while Kuaishou has "Ketu"; for video generation, ByteDance has "AnimateDiff-Lightning", and Kuaishou has the "Kelin large model".

Specifically, at the application level, ByteDance's AI applications cover various fields and are launched independently at home and abroad; Kuaishou, on the other hand, has tightened its strategy and focused on popular application sectors. For video editing tools with AI functions, ByteDance has "Jianying", while Kuaishou has "Kuaiying"; for AI video generation, ByteDance has "Jimeng", and Kuaishou has "Kelin"; for AI companionship applications, ByteDance has "Maoxiang", while Kuaishou has an independent application called "Feichuan" and an embedded function called "Kuaizai Peiliao"; for AI image generation, ByteDance has an independent application called "Xinghui", while Kuaishou incorporates similar functionality into its "Ketu Mini Program".

Compared to ByteDance's aggressive approach to AI, Kuaishou is somewhat more conservative.

ByteDance takes individual model capabilities and turns them into products, aiming to find the next "Douyin". Under ByteDance's standardized production process, most AI applications are currently above average. Even facing the pursuit and blockade of startups, its products can still maintain a good monthly active user base and growth rate. Kuaishou's approach is more focused, serving existing scenarios and business ecosystems, amplifying existing content production, understanding, and recommendation capabilities, with its main focus still on the "Kuaishou" base.

As a result, until Kelin emerged, most of Kuaishou's AI applications did not make much of a splash.

In the field of "Sora"-like products, Kelin is a rising star. Previously, this sector already had applications such as Runway, Pika, Jimeng, and PixVerse. However, due to the dispersion of AI video generation functions, it has been impossible to form a monopoly, and Kelin has seized the market gap, directly exploding in the niche market of "physical logic generation".

Kelin's success can be attributed to a well-executed marketing campaign. Initially, a small group of professionals praised the generation results after internal testing, arousing curiosity in the industry. Subsequently, overseas marketing followed, with foreign tech influencers leading the charge in sharing Kelin's generation cases, creating the impression that Kelin was "exploding" overseas. This heat then Transmission to the domestic market , naturally leading to another wave of marketing momentum.

Similarweb data shows that relying on marketing has indeed brought positive benefits to Kelin.

Before large-scale advertising, Runway dominated most of the traffic under the same search terms, making it difficult for other competitors to compete. After Kuaishou's investment, Kelin's search traffic soared, rapidly narrowing the gap with Runway and becoming a top player. The cost was paying above-market fees. According to Similarweb, the CPC quote for Runway-related search terms was $0.38-0.65, while Kelin's was $0.46-0.68.

Kuaishou's aggressive spending has made overseas AI video startups struggle to breathe, and its low-price strategy has dealt another blow. Kuaishou's "old iron flavor" overflows the screen, offering 66 inspiration points for free, with a monthly subscription fee of RMB 66 for Gold members and RMB 666 for Diamond members.

After comparing the prices of most products on the market, Guangzi Planet found that Kelin can be considered the "Pinduoduo" of the AI video industry. Whether domestically or internationally, Kelin has driven prices to their limits.

Based on the standard version prices of each company, using Runway as a benchmark, the price for generating a 5-second video is $1.20 (about RMB 8.40). Under the same conditions, Pika charges $0.20 (about RMB 1.40), Jimeng charges $0.30 (about RMB 2.10), while Kelin's discounted price is only $0.10 (about RMB 0.70).

Before Kelin's entry into the international market, the positioning of foreign AI video sectors was very clear: a high-end professional route represented by Runway and a low-cost popular route represented by Pika. However, Chinese products' "Pinduoduo"-style price wars have made it difficult for Pika and others, directly slashing the monthly price from $10 to $3.88.

After Kuaishou's strategy was proven successful, Minimax's Hailuo AI also embarked on the same path, with the "productization + advertising + low price" formula for going overseas proving effective time and again.

AI Ignites the Second Video Competition

Kelin allowed Kuaishou to shine momentarily in front of ByteDance, but the Sora-style narrative is full of bubbles.

A report revealed that the computational load for training Sora is enormous. It requires between 4,211 and 10,528 NVIDIA H100 GPUs running for a month. This computational load is equivalent to 14,739 H100 GPUs running for a month, costing approximately $440 million at the current market price of about $30,000 per GPU. An NVIDIA H100 GPU can generate approximately 5 minutes of video per hour, and as the number of users increases, the cost of inference computation will also increase.

For Kuaishou, Kelin is like Jimeng for ByteDance; both involve bottomless short-term investments with meager revenue generated. Technological and resource constraints doom AI video to remain a relatively niche market, with the broader arena still belonging to Jianying and Kuaiying.

AI is currently the biggest variable, and the huge user base of editing tools fills the imagination for AI transformation, representing both user growth and new commercial breakthroughs.

Recent public data shows that Jianying had 100 million monthly active users in 2021. According to the latest data from Sensor Tower, since ByteDance launched CapCut overseas in 2020, its monthly active user base has exceeded 300 million, accounting for 81% of the total active users of mobile video editors. Before Sora's debut, Zhang Nan, CEO of Douyin, was appointed as the head of Jianying, showing ByteDance's strategic importance.

Faced with the real gap with Douyin, Kuaishou is more urgent. Historical lessons constantly remind Kuaishou that it cannot abandon AI, as it may be the key to defeating Douyin.

Kuaishou once paid a heavy price for ignoring Douyin's "growth". During the intense competition between Douyin and Kuaishou from 2018 to 2021, Kuaishou fully emulated Douyin, investing heavily in acquiring and retaining users. During the peak period, the cost per MAU reached RMB 22.43.

After the miracle of forceful investment, Douyin and Kuaishou entered a stalemate, expanding outward within their respective circles. According to data from Zhike Research Institute and Quest Mobile, the overall user overlap rate between Douyin and Kuaishou was as high as 47% in May 2019 and dropped to 33% in September 2023, gradually highlighting the differentiation between the two platforms.

AI has the potential to once again disrupt this delicate balance and ignite a second video competition.

Douyin and Kuaishou are like two big bubbles moving towards smaller bubbles with AI attributes and labels. The one that can integrate with these small bubbles first will be able to expand its original bubble first. At the same time, more attractive AI features may also cause some people to switch from their original camp to the other. Once mobility occurs, the stalemate will no longer exist, potentially opening up new possibilities for Kuaishou.

After comparison, it can be found that under similar functional positioning, Kuaiying places more emphasis on AI labels. Its newly launched AI features deliberately direct traffic to Kuaiying. During Kelin's internal testing period, it was embedded in Kuaiying's promotions, guiding hundreds of thousands of people to download Kuaiying to apply for internal testing qualifications and experience its features.

However, the odds of Kuaishou's success need to be considered comprehensively. Faced with the gap in user scale and retention between the two, it is uncertain whether Kelin's new users can fill the gap. For To C, what matters is user perception. Currently, ByteDance has incubated more than a dozen AI applications that mutually direct traffic with Douyin, indirectly planting the idea of using AI in users' minds. Up until now, the only AI product Kuaishou can showcase is Kelin.

Long-term Value of Content Platforms Still Needs to Be Realized

If Sora is considered separately, its value is merely a technology, as Baidu's Robin Li has poured cold water on its prospects, stating that "it will be ten years before we see any returns." However, when applied to content production scenarios, it hides a transformation path from UGC to PGC to AIGC, representing the long-term value of AI video in the future.

Combining Douyin and Kuaishou, the definitive sector we currently see is short dramas. Short dramas provide ample room for error in terms of themes, duration, and user groups for AI video technology. Currently, Kelin and Jimeng greatly lower the threshold for video generation. For ordinary people, generating a few second-long clips is not a problem; the difficulty lies in accurately controlling the generated content and post-production editing. It is still common for a one- to two-minute short drama video to take several hours to produce.

Previously, Kuaishou collaborated with leading AI video creators to produce the industry's first AI short drama as a gimmick. Although it gained exposure and popularity at that time, subsequent AI short dramas did not become an independent unit and remained under traditional categories such as "mystery", "urban", and "period".

For the entire industry, only a few can produce AI short dramas above passing standards. Currently, the supply of AI short dramas is a significant issue. Similar to the early chaotic growth of GIFs and short videos, there is now a need for the first batch of creators to provide content to revitalize the AI short drama sector.

The current state of AI short dramas provides inspiration for content platforms like Kuaishou. In the traditional short drama production and distribution process, Kuaishou and Douyin's "cash cow" revenue comes from short drama advertising. This involves multiple layers of relationships, including content creators, production companies, distributors, and resellers. Due to the complexity of the industry chain, there are many gray areas.

As a new species, AI short dramas have the potential to fundamentally disrupt these relationships. Kuaishou is attempting to make AI short drama creation, distribution, and monetization transparent, becoming a semi- or fully-managed AI content creation platform.

Through AI video creation contests and incentive mechanisms, Kuaishou aims to strengthen the bond between content creators and video generation tools. The more generous the video generation quota, the more it can cultivate creators' usage habits, which is particularly important in the early stages when companies are still competing for market share. The generated video content flows into Kuaishou's content pool as a supplement to meet users' consumption needs, while also attempting to adjust the business logic of the short drama industry chain.

At the end of last month, Kuaishou's short drama section launched a distribution matching and recruitment mode, allowing copyright owners to post recruitment tasks on the platform. Distributors can select and submit distribution applications in the drama selection plaza, while copyright owners have control over the number of distributors, preview episodes, listing time, and cooperation duration.

In the future, Douyin and Kuaishou will be involved in the entire AI short drama process. An integrated platform will have various functions such as AI video generation, editing, distribution, advertising, dynamic monitoring, and data analysis, enabling fully automated production. By then, the value of Sora and Kelin can be unleashed as part of the production process.