In the “China Mobile Internet Industry Development Analysis Report”, Yingke became the second largest player in the entertainment live broadcast market with 18.31 million subscribers.
However, the situation of the Internet industry is changing rapidly.Since 2018, the short video industry, which is also used for entertainment and boring time, has brought a huge impact to the live broadcast industry with richer content and more flexible time processing. . Official data show that as of July 2019, Douyin’s daily active users have exceeded 320 million; fast-handed daily active users have also exceeded 200 million, and set a goal of exceeding 300 million by the 2020 Spring Festival.
In addition to the impact of short videos, Yingke also has problems that cannot be ignored.
First, the business model is too singular. According to Yingke’s 2018 annual report, the revenue earned through live broadcast rewards reached 3.729 billion, accounting for 96.59% of total revenue. From 2015 to 2017, Yingke’s live broadcast rewards accounted for 94.6%, 99.8%, and 99.4% of the total revenue, respectively. It can be said that Yingke’s revenue almost comes from users’ rewards. Restricted profit model, it is difficult to provide strong support for Yingke’s market value growth.
Second is the lack of novelty in Yingke’s content. In recent years, the content of live broadcasts has been almost unchanged. It is because the head anchors show their charm to retain users, and they are similar to other live broadcast platforms. The homogeneity is serious and the advantages are not obvious. Competition in the live broadcast industry is becoming increasingly fierce, but Yingke lacks differentiated characteristics, which has led to a slump in market share.
Similar problems once plagued Panda and the whole people, and these two platforms have been eliminated in the competition of the live broadcast industry, and Yingke in distress should feel the crisis.
YY net profit continued to decline year-on-year
As the “leader” of domestic live broadcast listed companies, YY (Happy Age) is not having a good time.
On November 13, YY released its third quarter financial report for 2019. Data shows that YY’s revenue was 6.88 billion yuan, a year-on-year increase of 67.8%. Net profit under non-U.S. general standards was 570 million yuan, a 27% year-on-year decline. YY’s net profit declined for the fourth consecutive quarter.
In early March of this year, YY completed a wholly-owned acquisition of overseas live broadcast BIGO. BIGO has an overseas live broadcast platform BIGO LIVE, a short video production sharing platform likee, and an instant messaging application imo. This represents that YY has grown from a live broadcast platform to a globally diversified video platform and has initially completed its global layout.
The YY related person explained the reason for the decline in profits to the media that the overall overseas business BIGO was still losing money. “BIGO LIVE achieved profit last year, with revenue of nearly 500 million US dollars in 2018. Likee has expanded faster this year and invested more. The commercialization of imo has just begun, so the overall BIGO is losing money.” >
From the perspective of financial reports, the emphasis on overseas markets has allowed YY user data to continue to grow. YY ’s global average monthly active mobile users are 470 million, of which about 77.9% of users are from markets outside China.
In the field of short video, YY ’s global average monthly active mobile users increased from 19.5 million in the same period in 2018 to 150 million in the third quarter of 2019, including 100 million from Likee and imo embedded short video services. 50.2 million. In the field of live broadcast, the average mobile active monthly users of YY’s global live broadcast service increased by 26.5% year-on-year to 160 million, of which 100 million were Chinese users and 54.1 million were overseas.
Along with this, there is a rise in marketing costs. According to the financial report, YY’s operating expenses in the third quarter of 2019 were 2.16 billion yuan, an increase of 60% year-on-year. Of which, sales and marketing expenses were 1.08 billion yuan, accounting for half. The increase in these expenses was mainly due to YY’s continued investment in sales and marketing activities in overseas markets, and R & D expenses increased to 670 million yuan, mainly due to the increase in R & D personnel-related expenses. .
Since 2018, the year-on-year increase in YY’s operating expenses has begun to increase, especially in the first and second quarters of 2019, with increases of 200% and 168%. Compared with the previous quarter, the growth rate of YY operating expenses has begun to fall, but the 54% increase over the same period last year is still 6 percentage points higher.
It can be said that the financial reports of YY in the past two quarters are in a cycle of stimulating revenue growth and dragging down net profit.
Ceiling ceiling to force transformation
Since 2017, the live broadcast industry has encountered a slowdown. In 2017, there were a total of 25 financing events in the live broadcast industry. In 2018, there were only 10 financing events in the entire industry.
In addition, several live broadcast platforms have suspended live broadcast services: In October 2018, the national live broadcast showed “system upgrade and maintenance” and cannot be opened so far; on December 3, NetEase Mint Live Broadcasting announced that it will be shut down in December; After entering 2019, the once star-studded Panda Live also announced the closureThe challenge is.
We will not evaluate the pros and cons of Yingke and YY. From the current point of view, both are choosing to develop their business around their strongest genetic attributes. Yingke Social, YY Video . As for which road can go longer, which way is the best solution for live show breakout, it is still time to judge.