Reason for the domain. Although the old users of station B are not cold about Feng Timo and the stars, the fans behind them are what station B desires. Perhaps many celebrities and fans behind the celebrities are walking outside the B station. Strictly speaking, it was the same reason to form a game team and buy the right to live broadcast games.
Behind all measures is what Chen Rui refers to as the “$ 10 billion elimination line.” The current market value of station B is $ 5.5 billion. To achieve this goal, the market value of station B must increase by $ 1.5 billion per year for the next three years.
From the perspective of revenue, last year’s annual revenue of station B was 4.13 billion yuan. In the first three quarters of this year, the revenue was 1.37 billion yuan, 1.377 billion yuan, and 1.895 billion yuan, with a total of 4.767 billion yuan. Although showing rapid growth, there is still a certain gap from Chen Rui’s goal.
In terms of the number of users, the third quarter financial report of station B shows that monthly active users have exceeded 126 million, and the target of station B is to reach 220 million monthly activities in three years.
Using data to measure, the market value, revenue, monthly activity, and so on can only be filled by those old users or second-dimensional groups at station B. Fresh blood is the future growth of station B. Therefore, Station B has been constantly testing new services such as water games, live broadcast, and entertainment, and is preparing to further reduce the barriers to entry.
A two-pronged approach, just growth!
What was the result of this “gamble”?
For a long time, what was the focus of station B that has been questioned by the outside world? There is simply no clear way to monetize. And the game revenue ratio is too high, it is its most criticized place.
With the efforts of Station B for nearly a year, the company’s revenue structure is developing in a good direction. The third quarter financial report shows that the revenue of the game business of Station B has dropped to 50%, which is basically the same as that of the non-game business.
This result was obtained by station B with massive capital investment.
Heavy money investment has brought not only revenue growth, revenue structure becoming more reasonable, but also increasing losses. Burning money for users and revenue is a double-edged sword, and you need to master the scale and the climate.
The third quarter net loss of station B reached US $ 56.8 million, an increase of 65% year-on-year. According to its recent investment in new business, we seem to be able to foresee the approximate results of the next quarter’s station B financial report-monthly user activity and overall revenue continue to grow, and losses continue to increase. Hopes for future profits need to be built on the basis of accelerating the embrace of new user groups and exchanging new people for new revenue.
Game ads for B-site homepage banner
The ship turned around when it was small, but now the displacement of this warship at station B allows accelerated steering? From the advertising revenue at station B, we can see a part of “underwater resistance”.
In the third quarter, the advertising revenue of station B was 250 million yuan. This data seems to be gratifying (up 80% year-on-year), but it is analyzed by about 127 million users at station B, and the average daily use time is 83 minutes. An average user brought only 1.97 yuan to station B in Q3 Of advertising revenue, this efficiency is not ideal.
We might as well make a simple horizontal comparison, taking iQiyi as an example: According to the “September 2019 Mobile App TOP1000 Ranking” released by Analysys Qianfan, iQiyi App’s monthly number of people has reached 565 million. In the third quarter, the advertising revenue of 2.1 billion yuan, each user in Q3 brought iQiyi advertising revenue of 3.72 yuan.
The reason for this gap is that the user attributes of station B are too single, which has resulted in a limited range of advertisers or lower intent to deliver than other long video platforms. This is also the reason why most of the advertisements on station B used to be games and painting training.
To achieve growth, challenges and opportunities are bound to come at the same time. First of all, the live broadcast and e-sports that Station B strongly bets are both money-buying transactions. Although the two markets are hot, it still takes a long time to achieve profitability. Even if the plate is getting bigger and bigger, but the unseen loss will continue to hurt capital market confidence if it continues for a long time.
Second, how to coordinate the coexistence of new and old users at station B (this is also a commonplace talk). The management of station B hopes to break the circle, get rid of the inherent labels such as two-dimensional, ACG and add some new fashion elements, but this may not be welcomed by old users. In the process of breaking the circle, how to create a delicate balance for the new and old user groups is the biggest test of the B battle.
Today’s diversification is a big bet at station B, but also a bet that must bet and cannot fail.