Introduction to the stone: The growth story of Station B seems to have been unable to make up for the shortcomings of losses, and people are worried that Station B is walking on the old road of iQiyi's decline.
Jin Mei | wen
After the 2019 B Station New Year's Eve Party was broadcast, it received a lot of praise, and its stock price rose by nearly 20% in the opening 4 days of the New Year. In 2020, the B station New Year's Eve party achieved another good result, the ratings were second only to Hunan Satellite TV, and the stock price soared by 20% in 4 days. In 2021, the number of new year's live broadcast viewers of Station B reached a new high, with 300 million viewers watching at the same time at the most, but after the New Year's Eve, the stock price of Station B never repeated its past glory.
Without stacking stars, not being conventional, the audience can also "travel through time and space"... The party at Station B still has a lot to watch. In particular, the "Misplaced Time and Space" program allowed Chen Yannian of "The Age of Awakening" and his actor Zhang Wanyi to open a hundred-year-old lookout in "Parallel Time and Space". While traveling through time and space, the audience brushed the "tearful" barrage on the screen. At the end, the bullet screen full of screens" "This world is as you wish" is very spectacular.
However, the super high rating of Station B did not usher in the rise of the stock price, but went all the way down.
There is no future for brands that don't capture young people, as Javier, coca-Cola's former vice president of global marketing, once said, "The secret to setting up a growth engine for brands is to make sure that the brand's market share in the younger group is higher than the market share in the older group."
But Station B holds young people, but there is no clear future.
1
The joys and sorrows of Station B
Station B holds Generation Z (also known as "Houlang", pointing out people born in 1995-2005), but these people are children who need to ask their parents for money, so they have not created considerable income for Station B. Nowadays, the commercial realization of major platforms mainly relies on the "front wave" to pay the bill, and what Station B can do is to call on capital to grow up with him and wait for the back wave to grow up.
But the strange thing is that this wave of Generation Z is a different face in the FMCG world.
They have a stronger willingness to spend and tend to a niche culture, so in order to cater to The Z generation, a series of high-end, personalized products have come out. Xicha and Mixue Ice City have replaced the affordable Xiangpiaopiao, and the net red snacks are also constantly upgrading. In the eyes of fast-selling brands, the Z generation and the Z generation of the B station seem to be two groups of people.
Fortunately, the capital is willing to believe in station B and wait with him, because young people really like station B. In the third quarter of 2021, the monthly active users of Station B were 267 million, an increase of 35% year-on-year; the daily active users were 72 million, an increase of 35% over last year; and the average daily use time was 88 minutes, reaching a record high.
And B station users not only watch videos, but also take videos, which allows B stations to establish a self-circulating content ecology. Chen Rui, CEO of Station B, said: "Station B is not content-driven but ecologically driven, and if the content mechanism is good, the soil will blossom into a variety of flowers." But the embarrassing thing is that Station B guarantees that the UP master "blossoms", but it cannot guarantee the UP master "result".
The main income of B station UP is too low. Some out-of-the-box bloggers can't even earn back dozens of dollars for things. Station B has formulated an incentive mechanism for feeding back up the main body, but the conditions for obtaining rewards are very high. Therefore, the cost of the incentive plan in the company's annual report has always been at the bottom of all costs.
Fortunately, users really love this "small broken station", and UP owners "use love to generate electricity" and continue to be active here.
It is a pity that the operating model of "generating electricity with love" is difficult to last. In 2020, a group of sea-catching video UP owners collectively posted posters, announcing farewell to Station B and signing an exclusive agreement with Watermelon Video (ByteDance's video website). Allegedly, after changing the court, their earnings increased by 10-20 times. In addition, Wizard Finance was poached and signed an exclusive agreement with Watermelon Video, and the cost of "job hopping" was as high as 20 million yuan.
In the face of ByteDance's encirclement and interception, the problem of B station not making money has become more and more fatal.
In the first three quarters of 2021, The loss of Station B reached 4.491 billion yuan, and Station B lost 2.686 billion yuan in the third quarter alone, surpassing iQiyi's loss of 1.73 billion yuan in the third quarter and becoming the new loss king of the video industry.
Gratifying user growth, 300 million people at the same time watching the New Year's Eve party, can not stop the B station stock price soaring trend. The growth story of Station B can no longer make up for the shortcomings of losses, and people are worried that Station B is on the road to the decline of iQiyi.
2
The circle is broken, but it can't be separated from the circle
Breaking the circle and seeking user growth is the core strategy of Station B.
The user limit of China's secondary yuan is 100 million people, and the B station can only be diversified to grow. In 2020, technology, knowledge, finance, and workplace-related content have enabled Station B to achieve rapid user growth. In November 2020, Chen Rui expressed surprise at the early completion of the annual user target and proposed a goal of increasing the number of users to 220 million in 2021.
In February 2021, the rapid user growth made Chen Rui throw down the rhetoric of reaching 400 million users in 2023. This means that in 2021, Station B will reach at least 250 million users. The larger the goal, the more radical the process of achieving it is likely to be. In order to create an open and diversified ecosystem, Station B has made many changes from the aspects of member ecology, brand ecology, content ecology, and business ecology.
In the third quarter of 2021, the monthly active users of Station B reached 267 million, and the user growth once again exceeded expectations. However, from the cross-Chinese New Year's Eve of Station B in 2021, it is not difficult to see that it is getting farther and farther away from the small circle of the second dimension. Some netizens joked that before watching the 2021 New Year's Eve party, I thought "don't make so many second dimensions", and after watching it, the feeling is "you are the whole second dimension".
In 2021, Chen Rui repeatedly emphasized that the life, game, entertainment, animation and knowledge regions have replaced the second dimension and become the top five content categories most popular with users of Station B.
But the embarrassing thing is that station B is crazy to abandon the second dimension, and on the other hand, it cannot "wean" from the second dimension.
The two-dimensional game "FGO" has always been its "cash cow" after entering station B in 2016, and a game in its heyday even supported half of the revenue of station B. Station b through the two-dimensional game of intermodal transportation and agency distribution, to obtain a five-to-five share of revenue with the manufacturer, supporting 80% of the company's performance.
In 2016, the large member subscription launched by Station B, the main content is still two-dimensional drama viewing (non-two-dimensional paid movies, TV series and variety shows have not yet formed a scale in Station B), and since then, the live broadcast business and e-commerce business of Station B have mainly revolved around two-dimensional content, so the source of income of Station B is still very dependent on the two-dimensional native customer base before the "breaking of the circle".
But Chen Rui, who is frantically moving towards 400 million users, has attracted many new users. The influx of new people, the dispersion of platform energy and the subtle change of community atmosphere have made the original business of Station B lose its former glory.
In the first three quarters of 2021, under the premise of increasing game publicity, the game revenue increased by only 9%, and the proportion of game revenue fell to 30%. Station B holds a quarter of the Internet users, but the game business only wins 2% of the big plate.
The reason for this is, first of all, that the policy suppression has caused many games to shut down. Secondly, the two veteran games of "FGO" and "Blue Route" have entered a period of life decline, but Station B has "no successor". In addition, with the rise of channel-free game communities such as TapTap, the channel advantage of Station B is also declining.
Nowadays, although the E-commerce, advertising, and value-added business of Station B have all grown to a certain extent, no business can assume the responsibility of "cash cow" proportional to the scale of users. There is a fault in the revenue of Station B.
Station B, which has poor growth on the income side, spends money but is unambiguous.
Station B has not been bad for money. With young people in hand, Station B has successively received huge strategic investments from Tencent, Alibaba and Sony. Strong financing capabilities bring abundant cash flow to the company.
However, the more aggressive expansion strategy has led to a sharp increase in the company's sales expenses. In the 12 years since its establishment, Station B has accumulated losses of more than 9.6 billion, and it seems that it will accelerate losses.
Because of the circle-breaking thing, it is impossible to achieve without spending money. Station B will inevitably face the challenge of improving the content ecology, improving the copyright business, and transforming into a pan-entertainment integrated video platform. But explore self-made variety shows, buy copyright videos such as documentaries, TV series, movies, variety shows, layout e-sports live broadcasts, and hold many large-scale offline interactive activities... All of this requires real money and silver.
As Station B breaks the circle, its management costs also double. The content of Station B mainly adopts manual review, and with the growth of user volume and the expansion of user groups, management costs will naturally increase.
In addition, Station B is still constantly investing abroad. Since 2021, Station B has invested in more than 40 companies. There is nothing wrong with investing in games, MCNs, animation, film and television copyright companies, but Station B has also invested in catering, electric vehicles, clothing, which are not highly correlated businesses. Investment strategies can be very confusing. These investments in the third quarter directly led to a loss of 724 million yuan for Station B.
Income is broken, expenditure has soared, and the loss of Station B has gradually expanded. If this situation is not curbed as soon as possible, when the number of users of Station B reaches 400 million, it will inevitably be a larger deficit.
3
Cha-rice has become the lifeblood of Station B
Nowadays, the game self-development business of Station B has made progress, but there is great uncertainty about whether it can run out of the blockbuster; the large member business is limited by competitive pressure and the prospects are unknown; e-commerce live broadcasting is still in the exploration period, and the competitive pressure is also not small... At this time, the advertising business has become a treasure mine that Station B cannot but dig.
For nearly a hundred years, selling the audience's "eyeballs" to advertisers has always been the survival logic of the media. But in 2016, Station B began to try patch ads, and a large number of users left. Chen Rui could only compromise and finally turned the patch advertisement into a recommendation advertisement. Why is it that other media and advertisements are natural, but when they arrive at station B, they are earth-shattering?
Unlike the media positioning of other platforms, Station B is a community. If you compare the media such as Douyin, Kuaishou, Little Red Book, and Aiyouteng to a square, then Station B is the living room for young people. Everyone does what they like in the living room, and they will have like-minded friends... Therefore, the cultural atmosphere it has precipitated is not reproducible, and it also ensures the high viscosity and high retention rate of platform users, which is the moat of Station B.
But this moat not only blocked the enemy, but also blocked the advertising business of Station B. When you see people holding billboards in the square, you can ignore them. But in the living room of their own living room, when they see the advertisement, of course, they can't help but kick it out. What's more, the user discourse system of Station B and the discourse system of the brand are completely different, and the two seem incompatible.
Zhang Xiaolong once compared WeChat to our "best friend", "How can I be willing to put an advertisement on the face of your best friend?" "So WeChat has not yet started ads." The strategy of Station B is also relatively restrained, so it will not seek its own death by adding advertising.
B station users actually do not hate the role of the gold lord, the title of the New Year's Eve party, users are even very grateful. The key is how the brand fits into the circle culture, so that users feel that the brand is "their own person". This point needs to be rethought by Station B, such as how to help brands establish new ways of discourse? How do you build a sense of role for your brand? How do you emotionally interact with users? Wait a minute. Like 2020, KFC sucked the original chicken in the B station, which provided a high degree of heat for the brand.
On December 10, the B Station 2021 Marketing Conference released the commercial middle office system "Brand Bank", which is composed of a commercial traffic management system, an advertising system, and a UP main business cooperation platform "Hanabi". Provide official support for the UP master "Just Rice".
For advertising effectiveness, Station B also gave a new measurement standard. Station B proposed "brand equity = brand content + user relationship", using the objective number of "brand-related manuscripts to increase multiples" to interpret "community compound interest". Interpret "IP compound interest" with "multiple search volume", thus figuratively and digitally digitizing the emotional connection between users and brands.
The scale of users has increased, the most direct benefit is reflected in the advertising business, how to reasonably eat under the premise of the B station without changing the taste, has become the top priority of the B station. Tencent's advertising revenue in the third quarter was 22.5 billion, Kuaishou's advertising revenue in the third quarter was 10.9 billion, Byte's advertising revenue was greater than 30 billion, the average daily playback of B-station video was 2.3 billion, and its advertising revenue in the third quarter was only 1.12 billion. It is calculated that every 1,000 plays will generate 4.2 yuan of advertising fees.
However, it should be noted that the advertising business still has a ceiling. How to, like WeChat, through vertical diversification of their business scope, integration of the industrial chain, the original market transaction into the internal behavior of the enterprise, to build their own perfect business ecology should be the future of Station B.
In terms of community operation, there is no successful precedent, and it is not easy for Station B to succeed. I know that there are many complaints about the B station, low wages of employees, high work pressure, frequent flow of middle-level personnel and so on. Although Station B is a big station in terms of traffic, it has been running desperately and has not yet trained a team at the helm of a large company. Now it is time for Station B to slow down and develop from extensive to refined.