Image source @ Visual China
Text | Most talked about FunTalk, by | Zhang Xing, editor | Wang Fangjie
On the afternoon of December 15th, I opened the B station live channel, entered at least 20 live broadcast rooms, and saw a bunch of beautiful little sisters, with soft voices, occasionally driving, but not the legendary "little yellow car".
However, according to media reports, before double 12, the new version of the B station APP did add a small yellow car function, and users could watch the live broadcast while placing orders and shopping.
This has aroused everyone's interest, these years, in the field of content platforms, B station is the end of the universe like existence, it from the two-dimensional community, transformed into a creator community, but does not affect the reputation of the two-dimensional population, but also gathered a large number of high-quality content creators. Such user stickiness and community prosperity, really everyone wants to learn can not learn.
So when Station B also announced that it was going to start live streaming, it was somewhat surprising. At this moment, the head content platform, Douyin, Kuaishou, B station, and Xiaohongshu are all involved in the field of live streaming.
Presumably the end of the universe is really the cargo.
Due to the direct trading attributes of the goods, many people speculate that the reason for the B station is the pressure of performance. In the past three quarters, the loss of Station B expanded by 144.18% year-on-year to 2.686 billion yuan, far exceeding the market expectation of 1.818 billion yuan, the highest single quarter since listing; the adjusted net loss was 1.622 billion yuan, and the net loss exceeded the sum of the first half of the year. During the same period, the gross profit margin of Station B was 19.6%, which fell below 20% for the first time in two years.
After the release of the financial report on November 17, Station B fell sharply in the US stock market for two consecutive days, with a combined decline of nearly 30% in the two days; in the Hong Kong stock market, the stock price fell by more than 10% on the 18th. As of December 13, the U.S. stock price of Station B has fallen by more than 70% in just over 9 months. Station B, which was only listed in Hong Kong in March, has only 40% of its Hong Kong stock price compared with the highest point.
But is Station B carrying goods for the purpose of increasing revenue? The reason is not always true. In the third quarter, Station B achieved revenue of 5.21 billion yuan, and the main sources of income were value-added services, games, advertising and e-commerce and others. Compared with its MAU of 267 million in the current quarter, the above business and overall revenue actually have a lot of room for development.
For example, MAU is about twice as fast as Station B, and its revenue in the third quarter reached 20 billion yuan, of which online advertising was 10.9 billion yuan, while station B's advertising business was only 1.17 billion yuan.
So, why does Station B catch a late set and start bringing goods now?
01 Quietly Mimi's live streaming with goods
Station B is not only now preparing for the live broadcast with goods.
From September 19 to 25, before the Mid-Autumn Festival this year, Station B member purchase held the fourth anniversary of the "Honmei Good Things Festival", arranging four game UP masters, Name, Xie Anran, Cool Breeze Kaze and Han Xiaomu, to try a 4-hour live broadcast for the first time.
Although the live broadcast of Station B still follows the scene setting of the two-dimensional culture, and all the goods sold are mainly based on the two-dimensional hand-made and surrounding daily necessities, driven by the four major game live UP masters, the popularity of the live broadcast is indeed beyond the imagination of ordinary people. Later data shows that the traffic between live broadcasts can reach 5.13 million at the peak, which is close to the average level of Douyin's current first-line anchors.
In the follow-up report, Station B also said that although this live broadcast with goods was only a special action launched for the Mid-Autumn Festival, it did not expect that the enthusiasm of users was so high, and the cumulative sales had far exceeded their expectations.
In addition, in the B station, the goods are not recent, at least in October in some UP main videos, there is already a business with goods.
Some netizens said that when brushing the B station video of the well-known big UP master "Huanong Brothers", they found that there were advertisements selling agricultural products below. After clicking into the product page, it is actually not a jump to a third-party platform, but a member purchase of Station B's own, and the payment methods are WeChat, Alipay, and Huabei.
In fact, Station B considers combining video with e-commerce, which is not something that happened this year. Relevant information shows that the so-called "member purchase" actually existed as early as 2017, mainly serving the sales of various types of IP derivatives. After the opening of the "Fireworks Platform" in Station B in 2020, categories such as beauty and food were added.
"Judging from the previous live broadcast test, if the B station enters the e-commerce live broadcast, it will definitely be more vertical, and the interest points and derivatives that the secondary yuan and the UP main focus will be the biggest feature", talking about the fact that the B station is online live with goods, Zhang Ye (pseudonym), who has just left iQiyi, told "The Most Talked".
He believes that the category at the beginning should be relatively niche, "B will be cautious at this point, and dare not break through his own human design soon." In his view, if the commodity category is expanded after Station B, "how to select and solve supply chain problems is the core problem that Station B needs to solve."
02 The business logic of Station B
Although many people often compare B station with long video platforms such as "Aiyouteng", the business logic between them is completely different.
In the case of iQIYI, the only listed of the three long video platforms, on November 19, iQIYI released its third quarter of this year's financial report, showing that its revenue revenue was 7.6 billion yuan, the same as the first quarter, membership service revenue of 4.3 billion, accounting for 56.6%, online advertising revenue of 1.7 billion, accounting for 22.4%, becoming the second largest source of income, the two major revenues together accounted for 79%. The cost of revenue in the third quarter was 7 billion yuan, an increase of 10% over the same period in 2020, and the increase in revenue cost was mainly due to the increase in content costs in the quarter. Content cost, as an important part of revenue cost, was 5.3 billion yuan, accounting for 75.7% of the total cost.
Zhang also believes that the three long video platforms dominated by iQIYI are actually a content producer and wholesaler, "through the comparison between iQIYI's revenue and cost in this quarter, it can be found that the proportion of content cost and revenue is not much different, indicating that the core business model of these three parent video platforms is actually sold to consumers and advertisers through the purchase or production of content, and then use membership services and advertising forms to sell to consumers and advertisers."
And this can also explain why iQiyi rushed to recover this cost from members for a period of time, and even sacrificed user favorability to implement advanced on-demand screening and other means. In his view, for iQiyi, content purchase is both the main means of growth and the main means of profitability, "this model determines the subsequent product design and user experience."
This set of logic is actually the core logic of all head minister video platforms.
But Zhang also feels that the B station is completely different from iQiyi, at the very least, the membership service is not the most important income of the B station, "among which the value-added services include the large member fee of the B station, although the monthly paid users in this quarter reached 24 million, an increase of 59% year-on-year, but the quarterly fee of the big member of the B station is only 40 yuan, which means that the membership income brought by the big member in this quarter is about 900 million yuan, and the value-added service should be nearly 1 billion is similar to the live broadcast tip, the up main video tip, etc.
According to the third quarter financial report, the revenue of the value-added service business of Station B was 1.91 billion yuan, the revenue of the game business was 1.40 billion yuan, the revenue of the advertising business reached 1.17 billion yuan, and the income of the e-commerce and other business was 730 million yuan.
It can be seen that the membership income and advertising revenue that are consistent with other long video platforms account for less than 45% of the total revenue of Station B, while the revenue of other sectors accounts for more than 55%.
Although the income of large members is not large, Zhang also feels that Station B still attaches great importance to this system, "more or more as an entrance to commercial drainage." The follow-up whether it is mobile games, live tips, big members or "charging plans" (tips to up), are all spontaneous actions of users. Mobile games can not be downloaded, downloaded can also not be charged money; live tipping and charging tipping need not be said, all depends on personal wishes.
The targeting of advertisements on Station B can also illustrate this point.
On December 10, Station B held the 2021 AD TALK Marketing Conference, and released the three advertising situations and measures that Station B will focus on supporting in the next year.
According to the information of the conference, there are three types of advertising supported by Station B, that is, the circle culture & grass marketing based on UP main and OGV delivery; the integrated event marketing with free collocation of public domain private domain traffic; and the brand number marketing position that directly makes the brand into the UP master.
Such a reality shows that the advertising of B station is based on content embedding and does not disturb users as the bottom line, mainly based on the process of video information viewing, and hard broadcasting is not supported in B station, which is completely different from several other long video platforms that constantly use hard wide as a prerequisite for membership fees.
This actually means that the business model of Station B is funnel-shaped, the import port is very wide, responsible for user growth, and the guide export is very narrow for profit. The huge gap in throughput between the import port and the guide outlet allows B to slowly cultivate the paid needs of deep/core users without harming the user experience.
03 Everything is for the user's duration
In the business model of Station B, is live streaming a pure guide export?
"From the B station can now see a very clear business model can be known, the purpose of the B station online live with goods is not just the income obtained from the goods", a well-known MCN agency head of Lao Lin told "The Most Talking", even if the B station is engaged in live streaming with goods, the ultimate goal is still to fall on the user's stickiness.
In his view, the core of the existing business model of Station B is that it is necessary to continuously increase the stickiness of users. "Because only the more time users spend on this platform, the more efficient the commercial means of users who dominate the payment of Station B can be, and can also promote the continuous improvement of revenue."
Therefore, he believes that Station B cannot easily change its business model for the pressure of the capital market. "Now that we are determined to go online to live streaming with goods, it is only possible that in this way we can better improve user stickiness and user use time."
Industry data proves this.
According to the "Network Attention Analysis Report of the Live Streaming Industry" launched by the Micro Hotspot Big Data Research Institute, in the second half of 2020, the number of e-commerce live broadcasts exceeded 10 million, the number of active anchors exceeded 400,000, the average live broadcast time of a single session exceeded 3 hours, and the average stay time of users in the live broadcast room was more than 23 minutes.
"During this year's Double Eleven, our anchor is in the waist of Douyin, but each live broadcast time is also 4 hours on average, and the maximum residence time of a single user is more than 2 hours, and the average is about 20 minutes", Lao Lin believes that the B station values precisely the length of time that users stay in the live broadcast room when they live with goods, "because the user is full of calculations a day, the maximum time to use the Internet, staying on one platform for a long time, the time spent on other platforms will be short."
In his opinion, this is the thing that Station B is most concerned about. "Recently, these video platforms, whether it is Douyin, Kuaishou, or B station, watermelon, and even Taobao, JD.com are involved, when they meet with MCN institutions in private, they will promise all kinds of intangible benefits, hoping that we will broadcast more times and longer on his own platform."
Everyone has seen the impact of live streaming on the user's time and has begun to increase the intensity of the competition.
Moreover, the circle-breaking strategy of the B station in 2020 is actually constantly increasing the scale of users imported on the funnel, and hopes to increase the stickiness of new users by adjusting the content in order to promote the development of their own business models.
Similarly, the data shows that among the users who pay attention to live streaming with goods, users in the age group of 21 to 30 years old account for the highest proportion, accounting for 55.44%; followed by users under the age of 20, accounting for 21.80%; users in the age group of 31 to 40 years old account for 17.69%. This is actually in line with the existing user base of Station B and the user group that breaks the circle to include.
Therefore, rather than saying that the B station launched the small yellow car to increase additional revenue, it is better to say that the B station attaches importance to the purpose of live streaming with goods and directly refers to the use time of competing users.
Smart people are not only B station family.
Following short video platforms such as Douyin and Kuaishou and e-commerce platforms such as Taobao and Tmall, platforms related to short videos such as Xiaohongshu and Weibo have followed up with live streaming with goods, and even some TO B platforms have begun to push live streaming with goods.
Overnight, it seems that live streaming has become the best choice for many video platforms, some platforms have raised this business to the core strategic height related to the next development of enterprises, and long video platforms have begun to test the sea.
In June, Mango TV opened the road to help farmers live with goods with the popularity of the popular variety show "Sister who Cut through thorns"; iQiyi also followed close behind, not only announcing the layout of the star + KOL with goods matrix at the Joy Party in July, building a closed loop of online content live broadcasting, and some of the creators' personal homepages also launched the "commodity window"; Tencent Video naturally did not want to show weakness, and launched the first domestic live broadcast with goods vertical screen variety show "Goose Outside Surprise" in August...
And the overseas short video giants seem to have a sharp mind with these domestic platforms, and many celebrities on Amazon, YouTube and Facebook have begun the process of live streaming with goods. The key is that these live streams are similar to domestic goods, and the videos are added to Amazon's shopping cart, which can be directly jumped to buy.
Facebook, which has just changed its name to Meta, officially announced its entry into live streaming in early November, and proposed to combine group buying with live streaming. Follow-up Reuters report shows that Meta will be in the e-commerce field in 2022, especially live streaming with more layout, and strive to achieve on Meta to allow users to complete all network services and consumption behaviors, and let users stay longer than any other platform.
The reason for Meta's decision-making, in fact, shows that the impact of live streaming on user stickiness and duration is the fundamental reason why various video platforms at home and abroad are desperately online live streaming with goods.
Zuckerberg pointed out in this regard at the latest earnings report meeting that Meta's next important product is live e-commerce, "we want to help users find products that are interested, and let them stay in our APP from the beginning of purchase, so that we will unlock more opportunities."
This kind of naked display of ambition is indeed very Internet. Behind the transformation of almost all video platforms to live streaming with goods, the ambitions of each family for user time have also been revealed.
In 2018, when Station B was listed on the U.S. stock market, my colleague Fang Jie interviewed Chen Rui. When it comes to competition, he said that the competitors of Station B are every product that occupies the user's time and mind, and at that time, he listed the biggest competitors as the glory of the king and PUBG.
In just a few years, the short video platform has risen rapidly with live e-commerce and has become the biggest hunter of user time. In the third quarter, the average daily time of Kuaishou users was 108.8 minutes, while the B station was 88 minutes.
Standing in this 20-minute time difference, Station B will also start to carry goods.