Douyu Q3 lost 165 million, and lost 3 years of “League of Legends” broadcasting rights. Has the traffic flowed through?
Editor’s note: This article is from WeChat public account “Node Finance” (ID: jiedian2018), author Icya.
Recently, the barrage video website Bilibili (Station B) won the 800 million auction of the League of Legends Finals in China for three years of exclusive broadcast rights. At the same time, it also participated in auctions such as Douyu, Kuaishou, Huya and other live broadcast platforms.
The “winning bid” at station B may not be good news for Douyu. It may be difficult for Douyu to taste the sweetness in the future of the League of Legends live broadcast.
According to Douyu (NASDQ: DOYU) ‘s financial report for the third quarter of 2019, Douyu’s cumulative operating income in the third quarter was 5.220 billion, and the cumulative operating income growth rate was 109.30%; total operating profit was -297 million, total profit The growth rate was 51.36%; non-US GAAP recorded a net profit of 72.2 million yuan, an increase of 37% from the second quarter.
Douyu founder and CEO Chen Shaojie said, “Overall, our business maintained a stable growth trajectory in the third quarter. Thanks to the demographic dividend of gaming e-sports in China, along with the summer game release and mobile device iteration The experience we bring is increasing, and the size of our users, especially mobile MAU, continues to expand. “
But judging from the performance of Douyu in recent years, continuous losses seem to be the norm for Douyu.
Sitting on Jinshan traffic, but falling into a circle of not making money
Douyu is a barrage-style live sharing website that provides users with game-based live content and event services, covering entertainment, variety, sports, outdoor and other fields. On July 17, 2019, Douyu was officially listed on the Nasdaq Stock Exchange.
Comparing Douyu’s past financial data, we can see that Douyu achieved a loss in the first two quarters of 2019, and achieved a net profit of 41 million yuan in the two quarters. In the fourth quarter, the net loss was 165 million yuan (approximately US $ 23.2 million). Although it was slightly narrower than the same period of the previous year, it was still in a loss.
Data source: Douyu’s annual financial report, node financial charting
In the third quarter, the cost of Douyu was 1.542 billion, an increase of 59.4% compared to 967 million in the same period last year. The cost of bandwidth also increased from 142 million in the same period in 2018 to 151 million in the third quarter of 2019. The overall increase in bandwidth costs has shown a narrowing trend. In addition to the cost of bandwidth, Douyu is shifting from high prices to cost-effectiveness in its anchor selection strategy. It has adjusted the past “regardless of cost, digging people crazy” business model, and this change is reflected in content costs.
According to Douyu’s public information, since 2016, Douyu has obtained more than 30 national and global e-sports exclusive live broadcast rights, including League of Legends, Jedi Survival, DOTA2, etc .; in 2018, Douyu Live Over 340 e-sports events, and hosted more than 90 e-sports events. In terms of professional e-sports players, Douyu has signed with the World Champion IG Club and sponsored 26 top e-sports teams. In addition to purchasing copyrights and signing clubs, Douyu is also constantly making efforts on its own e-sports events, such as DSL. Fish Super League, Betta Fish Jedi Survival Gold Grand Prix, Betta Fish Carnival, Betta Fish Fun Festival, etc.
In the Internet thinking, sitting on the two golden hills of “data” and “traffic” can quickly help companies become giants. Because of the advantages of Internet traffic, the model of commercial realization will have no boundaries. In fact, Douyu’s quarterly average MAU reached 164 million, and mobile terminal MAU reached 52.1 million. Large numbers of users coupled with the high-frequency hosting of popular events, Douyu has a traffic advantage, but why is it in a strange circle of not making money?
The root of all this may be Douyu’s “extensive” management of the traffic business.
Traffic monetization, can it really run through?
In addition to being a traffic accident, game streaming has gradually formed an industry chain from game copyrights and e-sports events to live broadcast platforms and derivatives, with game copyrights and e-sports events as the core. Thanks to this, the revenue model of the game live streaming platform is diversified, including rewards, advertising, product intermodal transportation, membership, and knowledge payment.
By comparing the relevant data of Douyu and Huya, two major game live broadcast platforms in China, we find that Douyu has advantages in terms of MAU and pay rate. In the third quarter of this year, the average MAU of Douyu reached 164 million, and that of Huya was 146 million. In terms of paid users, Douyu’s paid users exceeded 7 million, while Huya’s was 5.3 million.
