Station B becomes “the worst video platform this year”?Iqiyi is willing to bow down

Two years ago, when everyone was discussing Station B, a certain Internet tycoon asserted: Take off is inevitable, and the difficulty of commercial realization is only temporary.

Today, two years later, Station B did take off, but it flew staggeringly. On the one hand, Station B, which has money, has invested in 43 companies this year. These companies cover too many fields and are called “investment without rules.” “. On the other hand, the growth of the game business at Station B has been sluggish. It used to be a cash cow business, but now it has become a “oil bottle”?

The data will not lie. The financial report released last night revealed everything that the B station experienced.

In this financial report for the third quarter of 2021 as of September 30, B station revenue was 5.207 billion yuan, a year-on-year increase of 61%. The net loss was 2.686 billion yuan, compared with 1.109 billion yuan in the same period last year, and the loss increased by 144.01% year-on-year. The adjusted non-GAAP quarterly net loss was RMB 1.62 billion.

On the whole, this financial report is mixed. The overall revenue data of station B has performed well and the number of users has maintained a steady growth. However, the loss has further expanded beyond expectations, the loss rate has further exceeded the revenue growth rate, and at the same time, the operating fee and expenditure have increased. As a result, gross profit margin bottomed out and fell below 20%.

　　How to support the high valuation of the most losing platform this year?

In the third quarter, the revenue cost of station B was 4.188.1 billion yuan, an increase of 70% compared with the same period last year. Total operating expenditure was 2.895 billion yuan, an increase of 57% compared with the same period last year.

Among them, sales and marketing expenses were 1.633.3 billion yuan, an increase of 37% compared to the same period last year; general and administrative expenses were 474.9 million yuan, an increase of 87% compared to the same period last year; research and development expenditures were 788.3 million yuan, an increase of 37% compared to the same period last year Compared with an increase of 97%.

The operating loss was 1.878 billion yuan, while the operating loss in the same period last year was 1.0833 billion yuan.

The main reason for the increase in losses at station B is that several expenditures have almost doubled, as well as investment losses.

Based on the first three quarters, station B had a total loss of 4.704 billion yuan. On the same day, iQiyi, also a video platform, also released its Q3 financial report. In the first three quarters of 2021, iQiyi lost a total of 4.422 billion yuan. In terms of losses, Station B has surpassed iQiyi and has become the video streaming media platform that has lost the most money this year (among the published data platforms).

Even excluding investment losses and many other factors, the non-GAAP net loss of Station B in the third quarter was 1.622 billion yuan, which was also a relatively large expansion compared to the 970 million yuan loss in the same period last year.

How to support high valuations with large losses? This is a major problem currently facing Station B.

43 wildly voted, accused of being radical and disorderly

According to incomplete statistics, since 2013, there have been 146 public foreign investment incidents at station B. Since the beginning of this year, it has increased investment. Only from 2021 to the present, about 43 companies have participated in the investment at station B. The investment scope includes games, MCN, film and television copyright, animation production, audio and video content, tool content, and life. E-commerce, derivative peripherals and other fields.

In 2020, the total revenue of 12 billion yuan will be used for investment of 5.59 billion yuan, accounting for 46.58%. Although some investments are to strengthen strategic cooperation, such as Xindong.com and China Mobile Games, they are also dragging down the profitability of Station B. Judging from the financial report for the third quarter of this year, Station B changed from its investment profit in the same period last year to a substantial loss. This change was mainly due to changes in the fair value of the investment in listed companies.

At present, foreign investment has not yet brought actual benefits to Station B. In April of this year, Station B invested 700 million yuan in a 4.72% stake in TapTap. However, in the first half of the year, Xindong Network performed poorly, with revenue of 1.379 billion yuan, a year-on-year decrease of 4.3%; net profit attributable to shareholders of listed companies was -325 million yuan, a year-on-year decrease of 257.4%.

The investment core of Station B is still in the game field and the MCN field. However, judging from the 43 investments made this year, in addition to the investment layout based on its own ecology, Station B has also entered new areas such as catering, electric vehicles, clothing, news, and telecommunications. At the beginning, the investment style was not very structured, and even a bit radical.

New energy vehicles are indeed a hot sector this year, and Internet companies with a reputation seem to be rushing to enter this field. However, it is still relatively rare in content areas that are not closely related to automobiles. Station B is a company. Earlier, Bytedance reported that it was forming an Internet of Vehicles team, and then Bytedance said that it was doing some exploration to meet the user experience of in-vehicle scenarios.

In the automotive sector, the Krypton auto stocks purchased at station B are pre-A series preferred stocks and generally have no voting rights, but station B is also considered to be related to the popular electric vehicle sector, except for popular concept investment considerations , As for whether there will be cooperation in content, channels, and advertising levels in the follow-up, or a car plan will be brewed, long-term observation is needed.

In the same month of investment, station B also participatedChina TelecomThe strategic placement of A-share IPO, the subscription amount is about 500 million yuan.

Judging from this year’s investment strategy, in addition to the investment based on the ACG ecology, Station B has begun to focus part of its energy on investment trends and outlets.

However, investment losses are affected by the market, and the return on investment is expected to increase when the general environment is improving in the future.

　　The game business is not making money, and the profit is fading away

In Q3 of 2021, revenue from the game business at Station B increased by 9% year-on-year to RMB 1.40 billion. In contrast, revenue from value-added services business increased by 95% year-on-year to 1.91 billion yuan; advertising business increased by 110% year-on-year to 1.17 billion yuan; e-commerce and other business revenues reached 730 million yuan, a year-on-year increase of 78%.

As the four horse-drawn carriages of B station revenue, advertising, value-added, and e-commerce have all maintained rapid growth. Among them, the amount and proportion of advertising business revenue continue to increase, and the B station content has an obvious effect of breaking the circle.

However, compared with the large membership, advertising business, and e-commerce business that are in the rapid development stage, the growth of the basic game business is much slower and the growth is very difficult. In the third quarter, station B launched three exclusive agency games, and in September ushered in the fifth anniversary commemorative event of “Destiny: Grand Position Designation”, but no obvious benefits were seen. The new games launched in the second quarter contributed generally.

In the revenue composition, the proportion of game businesses with higher gross profit margins has decreased, which also affects the decline in gross profit margins. In this quarter, the gross profit margin of station B hit a record low at 19.6%.

In the past, Station B has always wanted to tear off the label of game companies and move towards a diversified and balanced income model. In 2020, Station B will complete a major change in its revenue structure. Value-added service businesses such as VIP membership and live broadcasting will take the lead in revenue generation and occupy the first place in revenue. Since then, the proportion of game business has gradually declined, and now it accounts for the proportion of total revenue. To 26.7%, it is a far cry from nearly 80% at the beginning of listing.

However, the decline in the proportion of the game business is also affecting the profit schedule of Station B-it is getting farther and farther away from profitability. The lack of kinetic energy in the gaming business is another major problem it currently faces. Station B has been focusing on self-developed games since 2019. Whether self-developed games can make a significant contribution in the future is still unknown.

It’s too late to re-lay out the meta-universe

In terms of user growth, in the third quarter, the average monthly active users (MAU) of station B was 267.2 million, and the number of mobile monthly active users was 249.9 million. The average number of daily active users (DAU) was 72.1 million, an increase of 35% compared to the same period last year. The average number of monthly paying users (MPU) was 23.9 million, an increase of 59% compared to the same period last year.

　　BilibiliChairman and CEO Chen Rui said on the conference call that more screens will also become the home of video, such as TV screens, which have become the second-ranked device in station B MAU. Station B now has a TV-side MAU that has surpassed that of the PC-side. At the same time, the TV-side broadcast time is longer than other terminals. He believes that the TV-side will have further growth potential.

According to its disclosure, the overlap between TV and App users is less than 20%. Most users are in third, fourth, and fifth-tier cities. This completely differentiated user is active and brings more confidence to station B. The existing content of B station is reserved for future product changes, including changes in multiple scenarios. There should be other room for growth at the end of user penetration growth.

“Following the pace of the goal, we are confident that we will reach the goal of 400 million yuan in three years (that is, the MAU will reach 400 million by 2023).” Chen Rui said.

In addition, when Chen Rui mentioned the concept of Metaverse, he did think that station B in China is one of the most suitable companies to realize the concept of Metaverse, but Metaverse is still a long-term goal. “It requires certain prerequisites, and requires breakthroughs in products and technologies to realize this concept. I think (the realization of the meta universe concept) is really not in the last two or three years.” Chen Rui believes that companies that are only deploying or entering the meta universe should It’s too late.

So with regard to the current community ecology of station B and the layout of games and animations, will it catch the wind of the meta universe and make profits in the future? (Yang Xuemei)