The spring and cold of live broadcast listed companies in 2021 have not stopped, and it is necessary to transform as soon as possible to get rid of poor performance

Economic Observation Network reporter Ren Xiaoning Although spring has come, for live broadcast companies, the cold winter is still continuing. As of March 28, the domestic mainstream live broadcast listed companies have released 2021 financial reports, from the performance point of view, Huya, Douyu, Zhiwen Group (Momo), the three once unlimited live broadcast companies, in 2021 handed over either revenue decline, or from profit to loss of the report card.

During the epidemic in 2020, with the rise of live content on short video platforms such as Douyin, Kuaishou, and Station B, live broadcasting company users have been impacted, and the number of active users has declined. However, the performance of live broadcasting companies that year was still good, and most of them showed an upward trend. In 2021, the performance of live broadcasting companies has declined significantly. Zhang Yi, CEO of Ai Media Consulting, told the Economic Observer Network that even without the impact of short videos, live broadcast companies have reached the ceiling. If you rely only on the live broadcast business, it is difficult for these companies to see the future.

Judging from the performance of the financial report, there are also live broadcasting companies that have performed well in 2021, such as Yingke and Huanju Group. It is precisely because of the early transformation of these two companies that they have found profit points outside of live broadcasting, and have achieved revenue and profit growth in 2021.

Performance has mostly declined

By the end of 2021, Douyu had lost money for five consecutive quarters. In 2021, Douyu's annual net loss was 620.2 million yuan, compared with the net profit of 404.7 million yuan in 2020, which turned from profit to loss. In addition, in 2021, the revenue of Douyu was 9.165 billion yuan, down 4.5% year-on-year. After 16 consecutive quarters of profitability, in the fourth quarter of 2021, Huya also began to lose money, with a net loss attributable to the company of 313 million yuan, compared with a net profit of 253 million yuan in the same period of 2020, a year-on-year change of -223.72%.

The net revenue of Zhiwen Group in 2021 reached 14.576 billion yuan, down 3% year-on-year. Among them, the revenue of live broadcasting decreased from 9.638 billion yuan in 2020 to 8.379 billion yuan in 2021. The net profit attributable to Zhiwen Group in 2021 (adjusted) was 280 million yuan, compared with 836 million yuan in the same period of 2020, down 66.5% year-on-year.

These three companies were once "excellent students" in the live broadcasting industry, and in 2020, even in the face of the impact of the rise of live broadcasting on short video platforms such as Douyin, Kuaishou, and Station B, these three live broadcasting companies have maintained growth.

In 2021, the performance of live broadcasting companies represented by Douyu, Huya and Zhiwen Group showed a large-scale decline. Several live broadcasting companies also made separate explanations in their earnings reports. Douyu said that due to the year-on-year decline in revenue from live broadcasting, advertising and other businesses, it led to a year-on-year decline in annual revenue. Live streaming revenue is the main source of revenue, but the number of paying users who tip anchors has decreased. The average paying user of Douyu in the fourth quarter of 2021 was 7.3 million, a decrease of 300,000 from 7.6 million in the same period in 2020.

Huya said that the decline in performance was mainly due to the decrease in the average quarterly number of paying users, and the recent macro environment had adversely affected user payments. Huya's live broadcast revenue fell to 10.19 billion yuan in 2021 and 10.31 billion yuan in 2020. At the user level, the total number of paying users in Huya in the fourth quarter of 2021 was 5.6 million, down 400,000 from 6 million in the same period in 2020.

The number of users of Zhiwen Group increased slightly year-on-year, and declined month-on-month. In December 2021, Momo's main monthly active users were 114.1 million, a slight increase of 0.26% from 113.8 million in the same period of the previous year, and a decrease of 1.4 million compared with 115.5 million in September 2021.

Zhang Yi told reporters that the short video platform has a huge user scale and a diversified user structure, the cost of customer acquisition is low, and at the same time, it challenges the live broadcast platform with the help of its own capital power. However, even without the challenge of short video, users of live broadcasting companies are already facing a ceiling and need to find new points of strength.

The transformation should be early

The live broadcast companies that performed well in 2021 were Yingke and Huanju Group. In 2021, Yingke's revenue was 9.18 billion yuan, an increase of 85.4% over 4.95 billion yuan in the same period of 2020. Net profit after tax was RMB430 million, up 113.1% from the same period in 2020.

Huanju Group's revenue in 2021 was US$2.619 billion, an increase of 36.5% year-on-year. Adjusted net profit for the full year was US$109 million, which was also the first time that Huanju Group achieved full-year profitability after the sale of domestic live broadcasting business YY in 2020.

What both companies have in common is that they both made an early transition and now have other revenues besides live streaming.

At the performance briefing meeting of Yingke on March 28, Feng Yousheng, chairman and CEO of Yingke Group, revealed that at present, Yingke's live broadcast revenue accounts for less than 30% of the total revenue of Yingke, "which is equivalent to us recreating two Yingke." ”

Yingke started with live broadcasting and was one of the first companies to enter the live broadcast track in 2015. In 2019, Yingke began to transform, and at present, in addition to live broadcast products, it has also made social products and blind date products, contributing new revenue.

Feng Yousheng mentioned that the main reason for the transformation at that time was that some investors asked, after the vibrato, do you still have living space? "Yingke started with live streaming, but we know that every product has a life cycle." In 2019, he formed a team within the company to look for opportunities in other areas.

The new track that Yingke found was the social segment. In 2021, its social product revenue was 5.74 billion yuan, accounting for 62.6% of the total revenue, and a number of vertical social products represented by Jimu entered the mature commercialization stage. Revenue from live streaming products and blind date products was RMB2.56 billion and RMB610 million respectively, accounting for 27.9% and 6.7% of the total revenue, respectively.

"We didn't burn money to expand the scale, and only projects that passed the acceptance would increase investment." We will strictly control the finances and make the company's operations reach a healthy level. Feng Yousheng said that under this control, the performance of Yingke Company in 2021 has a good performance.

At present, Chinese Internet companies are facing two significant trends: stricter regulation and stock competition under traffic saturation. Feng Yousheng believes that the growth momentum of social products in the future is one of the domestic subdivision tracks, and the other is the dividend opportunity in the overseas multilingual environment.

Huanju Group's performance in 2021 rose and achieved its first full-year profit after selling YY, thanks to overseas opportunities. At present, the main business of Huanju Group is overseas products, according to App Annie's list of Chinese non-game manufacturers and applications released in December 2021, Huanju Group ranks second in the revenue list, second only to ByteDance.

Huanju Group is also a representative company that has been transformed early. As early as 6 years ago, when the domestic live broadcast company was still in the "Thousand Broadcast War", Huanju Group set up an overseas company BIGO internally to copy the domestic live broadcast gameplay to foreign countries, and in 2021, this business reaped returns.

At present, Huanju Group is operating live broadcast, social and short video business in more countries and cities to reduce its dependence on the single market. They employ more local employees in each country and region, and through the work of local employees, they do local business according to local needs, and their global employees are several thousand.

Li Xueling, founder of Huanju Group, said that in the global social and entertainment market, he believes that there is still a very large market space. Feng Yousheng also mentioned that in 2022, Yingke will focus on the layout of overseas markets, and the overseas strategy will aim at strong cash flow tracks such as overseas reading and overseas games.