In May 2003, Taobao was born, and in the past two months, more than 2,000 new products were added every day. The things on the top are not only cheap, but more importantly, they are rich in variety. Whether it is genuine or cottage, only unthinkable, not unbought.
Later, with the further rise and expansion of e-commerce, the term "almighty Taobao" was integrated into the subconscious of netizens.
With a variety of contents, the B station that started from the second dimension is now also labeled as "almighty", similar to the state of Taobao's barbaric growth in that year. The video content on the home page of Station B has 21 main partitions, of which only 3 are closely related to the quadratic element. The content of Station B is becoming more and more diverse, especially the videos of various teaching courses, so that it is in contact with more netizens.
The vitality of the content ecology will determine the ceiling of user scale, and users will determine the future of Station B.
On the evening of March 3, Beijing time, Station B released the results of the fourth quarter and full year of 2021. Although revenue has maintained rapid growth, the loss has been even greater. The medium-term goal of Station B is to achieve breakeven under non-US GAAP in 2024, and in this context, how to tell the story of content ecology is of increasing significance to Station B.
01, the loss of expansion, B station to rely on advertising
The value of advertising to Station B continues to increase. In 2021, the advertising business is the most prominent segment of Station B.
In 2021, Station B achieved a total revenue of 19.384 billion yuan, an increase of 61.54% year-on-year. Although revenue has maintained rapid growth, the loss margin has increased even more. In 2021, the adjusted net loss of Station B was 5.5 billion yuan, which was 1.1 times larger than the adjusted net loss of 2.6 billion yuan in 2020.
In the fourth quarter, Station B achieved a total net revenue of 5.781 billion yuan, an increase of 51% year-on-year, lagging behind the overall growth rate of the whole year. Adjusted net loss was $1,660 million, compared to an adjusted net loss of $692 million for the same period last year. Net loss widened by approximately 140% year-on-year.
The road to profitability in Station B is still long.
Specific to various businesses, in the fourth quarter of 2021, Station B's revenue from mobile games was 1.295 billion yuan, an increase of 15% year-on-year; revenue from value-added services was 1.895 billion yuan, an increase of 52% year-on-year; revenue from advertising was 1.588 billion yuan, an increase of 120% year-on-year; revenue from e-commerce business and other businesses was 1.003 billion yuan, an increase of 35% year-on-year.
In terms of revenue structure, the contribution of games and value-added services to Station B has further decreased, and the advertising business has become the largest growth engine.
On February 21, the Science and Technology Innovation Board Daily quoted people in the game industry as saying, "This year's domestic non-issuance of edition numbers is the biggest bearish." On the same day, the stock prices of Tencent, Station B, Kuaishou and other related companies fell sharply. For Station B, the game business contributed more than half of the revenue earlier, so much so that the outside world regarded it as a game company. And now, it's free of the hassle of that questioning.
In fact, in the fourth quarter of 2021, benefiting from the performance of unique games such as "Blue Route" and the contribution of newly released games, the game business of Station B has rebounded from the performance of the previous three quarters, but the proportion of game revenue in the overall revenue of Station B has dropped to 22.41%.
The value-added services of Station B include large members, live broadcasting business and other services, which have slowed down compared with the previous growth. In the first three quarters of 2021, the year-on-year growth rate of this part of the business was between 89% and 98%.
The most eye-catching performance of Station B at the moment is the advertising business. In this regard, revenue growth is the fastest, directly driving the growth of the total revenue of Station B, and it accounts for more than 27% of the overall revenue.
Game supervision is becoming stricter, the growth rate of value-added services is slowing down, and advertising may be the most important thrust for the development of B stations in the future.
However, is the prospect of the advertising business of Station B big enough?
02, the evolution of content behind user growth
The performance of the advertising business of Station B benefits from the strengthening of the brand influence of Station B, and the brand influence depends on the continuous growth of users of Station B.
As of the fourth quarter of 2021, the average monthly active users of Station B reached 272 million, and the average monthly active users of mobile terminals reached 252 million, with a year-on-year growth rate of 35%. The average number of daily active users of Station B was 72.2 million, an increase of 34% year-on-year, and the average daily user usage time reached 82 minutes.
Users willing to spend money on Station B also continue to increase, and in the fourth quarter, the average monthly paid users of Station B increased to 24.5 million, an increase of 37% year-on-year, and the payment rate increased to 9.0%. As of December 31, the number of large members of Station B reached 20.1 million, an increase of 39% year-on-year.
In the words of Chen Rui, chairman of Station B, the community of Station B has maintained the characteristics of high growth and high stickiness. Compared with other long video platforms, this is an advantage of Station B. It reflects the effectiveness of the content strategy of Station B.
(Chen Rui)
Starting with anime-related content, B station has been constantly expanding new content positions on the basis of consolidating secondary element related content, thus exchanging users who were not interested in B station earlier. However, with the expansion of content, Station B will also bear the cost of growth.
In 2016, when mentioning Station B, the first thing that the outside world thought of was the second dimension, bullet screen, primary school students and so on. Chen Rui said in a speech that year that among the 100 million active users of Station B, less than 10% of users over the age of 25 were users, and a large number of users of Station B "should be post-90s, post-95s and post-00s users".
After three years, Station B is more willing to let the outside world realize the richness of its user composition. At that time, the proportion of users aged 18-35 in Station B reached 78%. In another speech, Chen Rui mentioned: "We have gradually expanded from a platform based on the post-90s and post-00s to a large number of post-80s, or even post-70s, and have also become users of our platform."
Station B is still a community dominated by young people, but a platform with only young people is destined to have limited appeal to brands that place advertisements.
Station B must expand its own user composition, and attracting users depends on fresh content.
According to the creator ecology report officially released by Station B, in 2009, creators in the three fields of games, animation and music of Station B accounted for more than 70%. In 2012, the technology division of Station B gradually developed, and the number of creators entered the top five of the division. In 2016, the fashion division of Station B grew explosively. At present, a large number of users browsing B station have no interest in secondary content.
Station B has been questioned about "de-quadraticization" in terms of content. Looking back, Station B has been investing heavily in the fields of animation and games, but in order to seek broader development, it must strengthen non-two-dimensional content.
In 2019, the content of the living area rose, and 34 living area UP masters were awarded the annual top 100 UP masters, becoming the district with the largest number of top 100 UP owners that year. At present, "knowledge" has become one of the important labels of Station B.
Station B report shows that in 2021, in all PUGVs (professional users create videos) in Station B, pan-knowledge content accounts for 49%. The scale of creators in the knowledge area increased by 92%, and the number of people studying at Station B exceeded 183 million.
A large number of fresh content has stimulated the community vitality of Station B, and also brought more possibilities to the commercialization of Station B.
Station B's financial report shows that in the whole year of 2021, its advertising business revenue reached 4.52 billion yuan, an increase of 145% year-on-year. In the fourth quarter, games, e-commerce, 3C products, food and beverage, and automobiles became the top five advertiser industries in Station B.
However, with the combination of risks and benefits, the problem of the rapid expansion of the content of Station B has gradually become prominent.
03. The pain and potential risks of auditing
At the beginning of February, Station B was caught in a content-related public opinion storm. An auditor at Station B left this world during the Spring Festival holiday.
At noon on February 7, a revelation about the suspected overtime work caused by the sudden death of the wuhan audit team leader of Station B spread rapidly. According to the network news, "the leader of the Wuhan AI audit team of Station B was asked to work overtime during the New Year, and under the intensity of work from 9 p.m. to 9 a.m., the sudden death of cerebral hemorrhage in the early morning of the fifth morning of the first five years."
Then Station B responded that after internal attendance verification, the employee commuted to work normally according to the work plan, working from 9:30 to 18:30, doing five days off and two, and there was no overtime in the week before the incident.
Station B also said that in 2022, it will increase the recruitment of 1,000 audit staff to reduce the per capita work pressure. At the same time, we will pay more attention to the physical health of employees, in addition to routine physical examinations, we will organize all employees of the Content Safety Center to conduct enhanced physical examinations, and increase the all-weather health consultation room to ensure the physical and mental health of employees.
The work intensity of the audit position is related to the work content and the arrangement of each company. An industry insider who has been engaged in auditing work pointed out to the city that high-intensity audit posts are generally posts directly related to user behavior, and the review of user submissions such as Station B is one of them.
Li Yu, who served as the acting leader of the audit team of the B station, decided to resign before being promoted to the official team leader, and she felt that her body was overwhelmed.
Li Yu also experienced the work rhythm of "doing one break and one day, 12 hours a day, three shifts". If strictly implemented in this system, the actual weekly work averages 42 hours, 8.4 hours a day, and overtime is not much. But the problem is that even if you work 12 hours of high intensity, you still have to work overtime.
Li Yu recalled that there was a month's night shift before leaving, leaving at 9:30 in the morning, but at that time, the volume of business was huge, and all team members were required to work overtime. She had a situation where she had to meet during the day at the same time as she worked the night shift. She asked her supervisor for leave, and the supervisor told her to "get over."
Before responding to the sudden death of employees, Station B should already expand the scale of auditors to cope with the increasingly heavy audit work.
At the same time, with the expansion of the main group of UP station B, how to maintain the quality of the overall content is also the challenge faced by station B.
In 2021, the B station incentive plan covered a total of 388,000 UP owners, and 70% of the traffic was distributed to small and medium-sized UP owners and new UP owners, thus promoting the prosperity of the content ecology of station B. But the number and quality of content creators are not proportional.
Some netizens have browsed various videos of B station with a playback volume of about 10,000 to 100,000, which has caused anxiety about the content of B station.
He noticed that among such videos that are not highly played, there are a large number of videos that rub hot spots but have no actual content, which are produced purely to cater to the audience's psychology and playback volume; there are also a larger proportion of videos, which are not completely without nutrition, but the content and production quality are not high, and the time consumed after watching them makes people feel that the time consumed is not worth it.
The problem is not only in the unknown newcomer UP master, but even the UP master with hundreds of thousands or even millions of fans, caught in the washing, copyright or other storms.
Station B is happy to show the rich diversity of content ecology, with 2 million cultural labels such as food, handicraft, cute pets, etc., forming 7,000 core cultural circles such as sports and fitness, science and technology digital, and national tide and national style.
Just like the almighty Taobao, there is no unbought, only unexpected, B station tries to use the ever-expanding content city pool to meet the various spiritual needs of users, "find every kind of love."
But like physical consumption, consumers are paying more and more attention to the quality of goods. As far as spiritual consumption is concerned, "quality" is more important than "quantity".
(Li Yu is a pseudonym in the text)
(Except for the separately marked source, the above picture is from Visual China)
(Author 丨 Li Nan Editor 丨 Lei Yanpeng)