Edit | Yu Bin
Produced by | Chaoqi Network "Yu see column"
Before short videos and live broadcasts entered their peak moments, online audio also experienced a brilliant period. As early as 2016 to 2017, online audio platforms mushroomed, pulling the entire industry towards a tens of billions of markets. According to CIC data, the market size of China's online audio industry has increased from 1.6 billion yuan in 2016 to 13.1 billion yuan in 2020, with a compound annual growth rate of 69.4%.
However, as one of the leading enterprises in online audio, Himalaya has fallen into a long-term loss while its revenue scale has grown. If it were not for the repeated pursuit of listing, perhaps the embarrassment of increasing its income and not increasing profits would not have been exposed to the public.
Since 2019, there have been many news on the Internet about Himalaya's IPO seeking to go public, but so far there has been no following. While the outside world is highly concerned about whether Himalaya can be successfully listed, some people have lost confidence in the online audio platform because of the exhaustion of its listing road. In particular, investors in its previous rounds are full of worries and anxieties about their unclear future.
The dilemma of capital: frequent financing "listed"
In terms of listing, Himalaya has always been a pioneer and a huge momentum. First in 2019, the rumors of listing in the United States were broken, and then in March 2021, the news came out again, and in May, the IPO application was submitted to the United States to be listed on the New York Stock Exchange, with Goldman Sachs, Morgan Stanley, Bank of America and CICC as joint underwriters. However, there is no following.
With its listing plan repeatedly stranded, Himalaya shareholders have also ushered in changes: 12 directors have withdrawn, and 18 investors such as Xiaomi have withdrawn from the ranks of shareholders. At a time when investors are choosing to retreat, Himalaya has also accelerated its pace of impacting IPOs.
In mid-August last year, Himalaya shifted its listing target to the Hong Kong Stock Exchange. At that time, Himalaya even registered Himalaya Holdings in Hong Kong and submitted a prospectus the following month.
The prospectus shows that Himalayas' revenue has multiplied over the past few years. From 2018 to 2020, Himalaya's revenue was 1.481 billion yuan, 2.698 billion yuan and 4.076 billion yuan respectively, with a compound annual growth rate of 65.91%. As of June 30, 2021, Himalaya recorded revenue of $2.51 billion, an increase of 55.5% over the same period last year.
At the same time, the prospectus also shows that Himalaya has been in a state of loss for a long time. Between 2018 and 2020, its net loss was 756 million yuan, 748 million yuan and 539 million yuan, respectively, while in the first half of 2020, its net loss also reached 324 million yuan, with a cumulative loss of 2.3 billion yuan in three and a half years.
It can be seen that although The annual loss margin of Himalaya is narrowing, profitability is still the biggest problem. The reason for Theraya's losses is due to rising operating costs and marketing expenses. It is precisely because of this that the capital that entered the market in the early days has some hopelessness and has gradually retreated.
When the popularity of online music gradually dissipated, the impact of capital retreat on the Himalayas was self-evident. In the past, Himalayas lacked traffic and lacked users, and they could burn money and get it quickly. Nowadays, it is also necessary to cut back on food and clothing and seek to go public to continue its life.
The high operating cost of the platform is even more fatal. It is understood that content sharing fees, copyright authorization, payment processing fees, Internet equipment procurement, etc., are all very important inputs for Himalaya.
Moreover, as a platform that relies heavily on quality content, investment in this area has been increasing for many years. The dilemma that Himalaya is in is that investing too much in the platform will weaken the profitability of the platform, and too low will not attract users with high-quality content creation capabilities.
The prospectus discloses that Himalaya has reached cooperation with 140 publishers and is still moving forward on the road of IP cooperation.
While the cost of content copyright remains high, its marketing expenses have increased significantly. Taking the first half of 2021 as an example, In half a year, Himalaya's marketing expenditure reached 1.23 billion yuan, doubling year-on-year.
As a niche platform with a limited audience, it is indisputable that Himalaya needs to spend a lot of marketing expenses to implant advertisements on mainstream Internet platforms and applications. This has also brought huge channel promotion and brand advertising costs. More often, it will lead to himalayan inadequacy.
Because of this, although Himalaya has made rounds of financing, the losses continue. According to the data of Tianyancha, before seeking to go public, Himalaya has completed nine rounds of financing, including well-known capitals such as JD Digital, Yuwen, Gopher, and Zhangjiang Hi-Tech. At a time when the power of capital has reached the end of the bridge, The urgent psychology of Himalaya to seek listing has been exposed.
The tide of the industry has faded, and the profitability of audio software is in doubt
As we all know, the dividend period of online audio products is from 2016 to 2017. At that time, short video, live broadcast and other product forms had not yet formed a climate, and 4G network technology was not enough to support the popularity of such products. Therefore, the Himalayas are born at the right time.
However, such dividends are only short-lived. With the popularity of 5G networks in the past two years, short video and live broadcast Internet platforms have risen one after another, and continue to seize people's limited time and attention. Listening to online audio is more like the era of television sets, still listening to the radio, and even a little like a thing of the last century.
In fact, with the sharp increase in the demand for online audio content by the intelligent terminal of the Internet of Things, the number of users of online audio has also been growing in recent years. According to data, as of December 2020, the number of online audio users in the mainland reached 282 million.
However, compared with the mainstream short video and live broadcast product forms, the penetration rate of online audio products is far from it. For example, according to the data of China Insight Consulting, in 2020, the Internet user penetration rate of domestic online audio is only 16%, compared with 57% of online music and 74% of long/short videos.
The high cost of content acquisition and the lack of user growth have also called into question the profit logic of online audio platforms such as Himalaya. Therefore, after being abandoned by investors, Himalaya had to seek self-help in the business model.
"Yu See Column" noted that under the huge revenue pressure, Himalaya even began to drain the online lending platform, app internal sometimes there will be "direct loans", "satisfaction loans" and a small number of bank membership payment products, other Internet financial products are not uncommon.
You know, on the Himalayan platform, many are minors who are growing up and learning. All kinds of signs reveal the profit difficulties and growth anxieties of Himalayas.
If the dilemma of the business model is the internal worry of The Himalaya, then the external competition it faces will also be its fatal external problem. Leaving aside that although different models have created different ways of monetization, most of them cannot get rid of the dilemma of loss.
In the early years of the booming sound track, there was no shortage of strong players at the beginning, and it has basically formed a stable competition pattern of the three giants of the UGC audio platform Lychee FM, Himalaya FM and Dragonfly FM.
However, as the same audio platform, the development path of the three companies is not the same. Himalaya adopts three modes of PGC + PUGC + UGC (user-produced content), Dragonfly FM is mainly based on PGC content, and Litchi FM is mainly UGC mode.
In contrast, Himalaya's market share has certain advantages, according to the "2019 China Online Audiovisual Development Research Report" released by the China Online Audiovisual Program Service Association, in China's online audiovisual market, Himalaya's proportion is as high as 62.8%. But at the same time, the Himalayas have paid a huge price.
It is understood that The main monetization channels of Himalaya currently include paid subscriptions, advertising, live broadcasting, education services and other innovative products and services. Among them, the paid subscription service is the basic disk of Himalaya, contributing more than 1.7 billion yuan in revenue in 2020, accounting for 43.3%. However, as mentioned above, the IP copyright fees that it needs to pay due to its business model are also overwhelmed.
Therefore, when Litchi was successfully listed on the NASDAQ in January 2020 and became the "first stock of online audio in China", It seems that Himalaya not only missed the opportunity to come out on top, but also missed the meaning of the secondary capital market. Even to this day, its listing plan is still like a stone sinking into the sea, which is lamentable.
Smart hardware may not be a breakthrough
As we all know, audio products are suitable for scenarios such as driving, commuting on public transportation, and doing housework at home. However, because it does not have the natural disadvantage of a sense of picture, it is difficult for people to develop the habit of long-term use.
Taking radio, one of the "four big pieces" that has been popular in the past few decades, for example, radios, Walkmans, and even mp3 players that were very popular in the past are used by fewer and fewer users.
Today, I am afraid that the only people who still use radios are the elderly who do not have good eyesight and taxi drivers who drive. Therefore, the ear economy still has a market, but it is always a niche demand, and it is difficult to form a scale effect like short video, live broadcast, and long video.
Therefore, in recent years, there are still many Internet companies that have seen this "slow market" and have cut from smart speakers to these fragmented scenes. However, unlike smart hardware products such as Baidu and Ali Layout, as early as June 2017, Himalaya launched the domestic all-content intelligent AI speaker - Xiaoya, and began to actively layout the field of artificial intelligence, and tried to gradually layout the relevant ecology through content.
However, compared with the massive users of Internet companies such as Baidu and many intelligent hardware infrastructures, Himalaya's intelligent hardware products are obviously a bit thin. It is understood that while Increasing the layout of hardware terminals such as automobiles, smart homes, smart speakers, and smart wearables, Himalaya has also reached cooperation with Alibaba, Baidu, Xiaomi, Huawei and other enterprises in terms of content. In addition, more than 60 car companies have also implanted Himalayan in-vehicle content.
However, Himalaya, which has both a competitive relationship and a cooperative relationship with technology giants, has an awkward industry position. Therefore, in the expansion of smart hardware products, the industry has always been a declining attitude.
On the one hand, as an asset-light Internet platform, its technical strength in developing intelligent hardware may not be the same as Baidu, Ali, and Huawei Xiaomi. On the other hand, as a provider of high-quality content, it also needs these technology giants to cooperate with them for a long time to form a real scale effect. However, the two are originally contradictory, and how the Himalayas find a balance will also be an inevitable problem in the future.
It can be seen that the layout of intelligent hardware may not be able to open the dilemma of the Himalayas, nor may it be a new breakthrough.
epilogue
As the leading online audio platform in China, the strength of Himalaya is beyond doubt. Unfortunately, the content ecological model of its layout has made it fall into the dilemma that it is difficult to form a benign financial model between input and output.
Therefore, even if it uses capital to expand the scale of users, it has never found a way to make a profit. The reason why its road to listing has been ups and downs must also be necessarily related to the fact that its model has not been recognized by capital.
This also means that even if Himalaya is successfully listed, it will continue to face the practical problem of how to break through the bottleneck of development. Listing may be able to solve its urgent needs at the capital level, but it is difficult to eradicate its lingering anxiety.