Who hasn’t developed while solving difficulties?
Editor’s note: This article is from the public micro-channel number “to coffee think tank” (ID: laikazk), Author: Shiba Inu.
Doudou
The user growth goal for the next three years is that by 2023, our monthly active users can reach the new world. ——Chen Rui
Doudou is a 70’s who likes to watch American TV series. He suddenly discovered the fun of Station B in the second half of 20 years.
“I haven’t had much contact with it before, but later I found out by chance that there was the complete episode of “Jojo’s Bizarre Adventure” on Station B, and the latest Obtaining Blade.” Doudou was like discovering the New World at that time. He works in a financial institution in a more serious work environment, there are not many channels to contact young people, and the quality of the various dramas on station B is very clear, which makes him immediately buy a one-year membership without hesitation.
“Unexpectedly, there are so many good-looking animations on station B. I used a lot of video sites before, but they all feel the same. If you are a member, you can choose one of three.”
Doudou’s choice was also reflected in the financial report of Station B this time. As station B continues to go out of the circle, this “Otaku” website, which is known for its second dimension, has attracted more and more people’s attention, and its user base and audience have also continued to expand. In the fourth quarter, monthly active users of station B increased by 55% year-on-year to 202 million; among them, monthly active users of mobile terminal increased by 61% year-on-year to 187 million. At the same time, daily active users reached 54 million, achieving a year-on-year growth of 42%.
After the financial report was released, the review of the financial and operating data of station B also showed a flood of opinions and contending on Weibo/p>
There is a positive view that the company’s performance in 4Q in 2020 completely exceeds expectations, which proves that while the out-of-circle strategy is successful, with the deepening of the circle, new users are more sticky and have stronger consumption. With relatively stable consumption habits, Station B’s development stamina can be justified, while the other school’s view is that Station B has embarked on a path different from its original intention, with rising market costs and far lower income growth. Loss, the platform continues to support large traffic to UP ownersBelow, station B also gradually showed a tendency to “microblogging”, which made the earliest loyal users feel at a loss.
One week after the financial announcement, the stock price of Station B continued to rise, and the capital market had already given its own judgment with real money. The latest report released by Founder Securities pointed out that, as a strong community platform where the first generation of Internet aborigines in China gathered for Generation Z, it is optimistic about the potential for continued expansion of user traffic and accelerated monetization in the future, combined with the valuation of comparable companies in the industry. The target price for 2021 is US$204.94, and the “recommended” rating is maintained.
01The effect of “breaking the circle” strategy is increasingly apparent
Since 2019, Station B has made a lot of strategic adjustments, focusing on the three keywords of “brand breaking, user growth, and organizational structure optimization”, and the strategic effects have become increasingly apparent. We believe that the current “Break the Circle” strategy has achieved significant results in terms of the increasingly optimized revenue structure of Station B or the penetration of more spectrum users.
Let’s first look at the changes in the income structure. Bilibili’s total annual revenue in 2020 reached 12 billion yuan, an increase of 77% year-on-year, of which Q4 revenue in 2020 was 3.831 billion yuan, an increase of 91% year-on-year. From the perspective of revenue composition, as the company’s business scope gradually expands and the platform’s diversified development accelerates, while revenue has increased substantially, the company has gradually gotten rid of its dependence on a single game business, and its revenue structure has been continuously optimized.
Specifically, the company’s mobile game business revenue will account for 40.03% in 2020, and the revenue from value-added services is close to the mobile game business, reaching 32.05%, and Q4 value-added business revenue surpasses mobile game revenue for the first time, Has become the first major business pillar of Bilibili quarter, and advertising business, e-commerce and other businesses have also developed relatively rapidly.
(Laika Think Tank organizes according to public data)
For the fourth quarter, 4Q20 mobile game revenue was 1.130 billion (yoy+29.6%), and the “Yuanshen” combined transportation contributed significantly. The revenue of live broadcast and value-added services was 1.147 billion (yoy +118.5%). The investment in live broadcast was increased, the results were obvious, and the growth of paid membership was obvious. Advertising revenue was 722 million (yoy+149.5%), brand awareness increased, and algorithms promoted performance advertising. E-commerce and other revenues were 741 million yuan (yoy+168.5%). Non-GAAP gross profit margin increased by 1.0% to 24.9% from the previous quarter.
Look again at the growth of users. In the fourth quarter, the average monthly active users of station B increased by 55% year-on-year to 202 million. Among them, the average monthly active users of mobile terminal increased by 61% year-on-year to 187 million. High-quality user growth has laid a solid foundation for the rapid development of commercialization. Driven by a large amount of high-quality content, the average monthly paying users this quarter reached 17.9 million, a rapid growth of 103% year-on-year. The overall payment rate also hit a new high, climbing from 6.8% in the same period last year to 8.9% in this quarter; gross profit margin has achieved seven consecutive quarters of chain growth, reaching 24.6%.
I believe that in the past 2020, whether it was the dissemination of the “Houlang” trilogy video or the “most beautiful New Year’s Eve party”, the public has left a deep impression on the public. Take the most beautiful night as an example. According to data released by station B, the number of platform circles is eye-catching. At the same time, the peak number of viewers exceeds 250 million. The number of views on station B is close to 100 million, and the number of views on Weibo topics reached 880 million. , The topic discussion volume reached 1.023 million, which is more advanced in online discussion and dissemination than the satellite TV show.
We believe that the influence of station B and the strong trend of expanding the circle can be seen from the advantages of network broadcast volume, and its more diversified mainstream content is gradually attracting mass users to station B.
After the financial report was announced, when answering questions from analysts, Bilibili Chairman and CEO Chen Rui also said that a wider audienceBecome a user of station B. Three years ago, the user groups of station B were mainly post-90s and post-00s. From last year’s statistics, we can see that a large number of post-85s have become platform users. According to third-party statistics, 86% of users at station B are under 35, which means that a large number of users over 30 are also attracted by station B, which symbolizes that “small broken stations” have been The post-90s and post-00s circles have gradually penetrated into the post-85s and even the post-80s.
02The endogenous power comes from the unique community ecology
“I have always believed that the user growth of content platforms ultimately depends on the quality of the content on this platform, that is to say which platform can provide more good content, then which platform users will eventually go to.” Chen Rui frankly, B’s strategy for user growth has always been to attract users with high-quality content. Quality content includes the quantity of content and the width of the premium content category.
Continuously attracting users with continuously produced high-quality content is easy to say, but it is really difficult to do it. Although many people in the industry compare station B with other short video platforms, unlike all other short video platforms, Laika think tank believes that station B has a unique content community ecology, and this is also station B Where the unique barrier lies. Iqiyi trong>
First of all, the content on station B is extremely inclusive, with a lot of niche and vertical content, which is not paid attention to and refined operations on other video platforms; Second, Because there are most of the young users on station B, there is a certain invisible threshold, and they have their own unique discourse system; third, young people have “admiration “Strong” mentality, so I am willing to invest more time in creativity and production. The final result is that the content production threshold of station B is higher and the quality is better. Fourth, Station B has a unique community attribute, which is completely different from other video platforms, whether it is a short video or a long video platform, such as an extremely rich content interaction mechanism, two dimensions Barrage culture, one-click triple-link, “Yeqinghui” and other terrifying cultures, as well as highly infectious ghost and animal videos, etc., have created a unique community atmosphere for station B, and users of station B are extremely fond of comments , The set average comment data is much higher than other platforms.
It’s worth noting that there are someAnalysts compare station B with long video sites such as iQiyi. The market value of station B is now four times that of iQiyi, and believes that the capital market is at risk of overestimating the share price of station B. However, long-term video sites like Aiyou Teng have indeed faced a relatively clear bottleneck for a long time-a large amount of production costs need to be invested in content production. The content of the three parent video sites is too convergent and it is difficult to make profits for a long time. You must know that, IQiyi has been losing money for 10 years.
In contrast, a large amount of low-cost, high-quality content is being presented on Station B. Through the core drive of PUGV (Professional User Generated Video), we continue to build a unique community belonging to Station B. After continuous iteration and differentiation, the content on station B has formed a rich and diverse content ecology of “PUGC as the mainstay, supplemented by OGC and UGC”. In the fourth quarter of 20 years, the number of active UP hosts on station B reached 1.9 million per month. An increase of 88% year-on-year; average monthly video submissions reached 5.9 million, an increase of 109% year-on-year.
In terms of subdivided content categories, in the fourth quarter, life, games, entertainment, animation, technology, and knowledge were the most popular among users. Among them, technology-related videos contributed to the overall video playback volume in the quarter. 10%. Not only that, knowledge content is also one of the fastest-growing content categories at station B in 2020. These content, whether it is on a long video platform or a short video platform, are very rare to see.
Conclusion
There is another reason Doudou did not hesitate to pay for membership of station B. Station B is only 148 yuan per year, while other video sites he frequently use cost more than 200 yuan anyway. “The membership fees of video sites are increasing, and I feel that this one is quite conscientious.”
Lai Ka Think Tank observes and found that whether it is a continuous annual or quarterly fee, the membership fee of station B is lower than that of other platforms, and the advertising is also much less than other platforms. Li Ni, vice chairman and chief operating officer of Bilibili, said that the advertising volume of station B will not increase for the time being, and it will remain at 5%.
But even so, the advertising business of station B has achieved accelerated growth for 7 consecutive quarters, with revenue in the fourth quarter reaching 720 million, a year-on-year growth of 149%, and a year-on-year growth of 126%.
So, from a longer time dimension, we believe that the advertising business of station B still has huge potential to be tapped.