Image source @ Visual China
Wen | business data school, the author | Wenbin
The Himalayas are going public again.
On March 29, online audio platform Himalaya submitted a listing application to the Hong Kong Stock Exchange, ushering in new progress in the intermittent listing process for nearly a year.
This is the third time That Himalaya has submitted a prospectus. Originally, Himalaya planned to go public in the United States and submitted a listing application to nasdaq in April 2021, but then voluntarily canceled the application.
In September of the same year, Himalaya transferred to the Hong Kong Stock Exchange, but there was no further action after the submission of the form, until March this year, when the prospectus expired for six months due to the expiration of the audit figures.
Therefore, this time the prospectus was resubmitted, and the overall data was not much different from the previous disclosure, but the data and information were updated in accordance with the listing requirements of the Hong Kong Stock Exchange.
The updated prospectus data shows that in 2021, The monthly active users of Thexirayan Reached 267.9 million, an increase of 24.4% year-on-year. Among them, the average monthly active users of mobile terminals are 115.6 million, and the monthly active users of The Internet of Things and other open platforms are 152.3 million. According to the China Insight Consulting report, the average monthly active users in 2021 ranked first among online audio applications in China.
For now, Himalaya's main revenue continues to come from subscriptions, advertising, live streaming and other innovative products and services.
According to prospectus data, Himalaya's revenue in 2021 was 5.86 billion, an increase of 43.7% year-on-year. Among them, in 2021, Himalayas subscription revenue was 2.99 billion yuan, an increase of 49.0% year-on-year; advertising revenue was 1.49 billion yuan, an increase of 38.8% year-on-year; live broadcast revenue was 1 billion yuan, an increase of 39.6% year-on-year.
But at the same time as revenue growth, losses are also expanding. From 2020 to 2021, Himalaya's intra-year losses were 2.882 billion yuan and 5.106 billion yuan, respectively; after adjustment, the 2021 losses widened from 539 million yuan in 2020 to 759 million yuan, but the gross profit margin increased from 49.1% in 2020 to 54.0% in 2021.
The reason for the widening of the loss was explained in the prospectus as a result of changes in the fair value of convertible redeemable preferred shares and expenses incurred by the Company in terms of content acquisition, sales and marketing activities, and research and development activities.
It can be said that the current Himalaya is still facing the contradiction between high content and user acquisition costs and inefficient monetization capabilities.
However, it is worth mentioning that with the popularity of smart homes, smart speakers and Internet of Vehicle Terminals, Himalaya's scenes outside of mobile terminals have been further popularized. According to the data, the monthly active users of Himalaya Internet of Things and other open platforms have reached 152 million in 2021, an increase of 35% year-on-year. Among them, the monthly active users of vehicle intelligent terminals and home intelligent terminals are 0.49 billion.
01, content investment has no bottom pit, profitability is still a big problem
Content costs remain high, and it's always been a cliché for online audio platforms.
Unlike Litchi FM, which focuses on UGC content, Himalaya takes a diversified approach to content monetization, and its content consists of three ways: PGC, PUGC and UGC.
In the specific operation, PGC is mainly composed of publishing houses, online literature platforms, and professional content institutions such as Deyun Society and professionals with IP value such as Wu Xiaobo and Yu Qiuyu.
PUGC is mainly a creator with professional capabilities in the platform, and the platform matches them with appropriate copyright content, which in turn helps them produce professional content. UCG is user-generated content production.
In 2021, PGC and PUGC on the Himalaya platform accounted for only 9.7% of the total content time, but contributed 54.6% of the total listening time of the whole platform.
At the same time, as the most important components of paid content, PGC and PUGC are also the most important sources of income for the platform. The data shows that from 2019 to 2021, the proportion of subscription revenue of the platform continued to increase from 47.2% to 51.1%.
Therefore, for the platform, expanding the content investment of PGC and PUGC has become the main way to continue to increase revenue.
However, although the distribution of profits between the platform and the content creator is mainly based on revenue sharing, in some cases, the platform still needs to pay the copyright license fee to the copyright owner.
As of 2021, the platform has 4.4 million active content creators and has established business cooperation with 160 head publishing houses and more than 140 head online literature platforms.
Therefore, from 2019 to 2021, the revenue share will account for 33.3%, 31.7% and 27.3% of the total revenue, respectively. Copyright royalties also accounted for 6.2%, 6.3% and 5.7% of total revenue.
Of course, content investment is an inevitable thing, and there will be income when there is investment. However, for Himalaya, the more important problem is that the number of audio subscriptions has never been able to achieve scale effect due to the impact of user scale and user willingness to pay.
Some insiders revealed that on the audio platform, the general album can sell 100,000 copies is already a super hit, and the album that sells one million copies is not at all. That is to say, the heavily invested PGC and PUGC content is difficult to dilute the cost through the scale effect.
To this end, Himalaya will invest more funds in user acquisition and brand promotion, and from 2021 onwards, it will launch a series of activities such as "Relieve boredom along the Way to the Spring Festival, Listen to Himalaya", "Mother's Day - Happy Mother Freeday, Be Yourself" and "Science Fiction Season" for new users, especially users below the third tier.
While increasing user acquisition, Himalaya has also continued to promote pay-per-view content, such as "Hi-Bo", which provides new training programs for content creators.
As a result of this series of investments, Himalaya's sales and marketing expenditure increased from 1.707 billion in 2020 to 2.63 billion in 2021, an increase of 54.1% year-on-year. But at the same time, the total average monthly active users also increased from 215 million in 2020 to 267 million.
Just this number is obviously not enough for the original intention of wanting to achieve revenue growth by expanding the scale of users.
02, enemies from all directions
In the field of online audio, Himalaya is deservedly the first in the industry.
According to China Insight Consulting data, Himalaya mobile users spent a total of 1,744.1 billion minutes listening to audio content in 2021, accounting for about 68.3% of the total mobile listening time of all online audio platforms in China.
But in the age of all-media, it's clear that the enemies of the Himalayas are no longer limited to online audio. What's more, it may face a double squeeze from short video and music streaming platforms.
Different from the development stage of foreign media, the excessive transition from graphics to video in domestic media is very short-lived, which leads to audio content in the middle of graphics and video and does not have enough time to cultivate its own user habits and content ecology.
After the rise of the short video platform, it has better compatibility than the audio content platform. For example, in terms of live broadcasting, the live broadcast of short video platforms has a richer and more immersive audiovisual experience. Even after turning off the video in live video, you can complete the same function as the audio platform.
More importantly, compared with audio content, short video platforms have more advantages in terms of traffic and monetization ability. This has also led many premium content creators on audio platforms to turn to short video platforms.
Nowadays, on major short video platforms, audio live broadcasting has also become one of the mainstream content forms.
In the voice live broadcast room, there are Kuaishou, Douyin, Himalaya, and NetEase Cloud Music
If the short video platform is two different tracks of video and audio, there are still great differences and unique values in terms of user experience and other aspects that cannot be replaced. Then the impact of music streaming platforms on online audio platforms is more direct.
For example, when the growth of online music payment was weak, NetEase Cloud Music and TME have bet their profits on social entertainment services.
Nowadays, the functions of online audio platforms such as listening to books, audio live broadcasts, podcasts and other functions have developed very maturely on music streaming platforms such as NetEase Cloud Music and QQ Music, and have become one of the most important sources of income for music streaming platforms.
Among them, NetEase Cloud Music has entered the live broadcast field since 2018, and has successively launched products such as "LOOK Live", "Sound Wave" and "Sound Street". By 2021, NetEase Cloud Music has updated more than 50 versions in the field of live broadcasting, adding functions such as song room, release status, listening together, and podcast story - human theater.
NetEase Cloud Music financial report data shows that in 2021, the revenue of NetEase Cloud Music's "social entertainment services and others" segment reached 3.7 billion yuan, an increase of 63.1% year-on-year. Among them, the number of monthly paid users of social entertainment services increased by 109% year-on-year to 683,300.
The listening page of the online music platform, from left to right, is Kugou, NetEase Cloud Music, QQ Music, and Himalaya
Similar to NetEase Cloud Music, in 2021, Tencent Music's long-format audio MAU exceeded 150 million, an increase of 65% year-on-year. "Social entertainment services and other revenue" accounted for 63.3% of Tencent Music's total revenue.
Liang Zhu, CEO of Tencent Music, said, "Long format audio is an excellent complement to the company's strong music portfolio and helps to expand the scale of users. ”
As a result, in January 2021, Tencent Music announced the acquisition of 100% of the shares of Lazy Listening. In April of the same year, TME's Cool Me Listening merged with Lazy Listening Books and upgraded to a new brand "Lazy Listening".
Investment bank Needham released a report after the completion of the acquisition, saying that the acquisition has greatly enhanced Tencent Music's ability to compete with Himalaya on podcasts.
It can be said that the entry of online music into online audio platforms is like a dimensionality reduction blow. After all, listening to music as a more basic need has more advantages in terms of user size and consumption frequency.
03. Where are the opportunities for a breakout?
So, in the face of the double siege of short video and online music, where is the future of online audio platforms?
In fact, compared with short videos and online music platforms, online audio platforms also have their own advantages, that is, audio has more accompaniment attributes, and therefore has stronger user stickiness and loyalty.
According to the data of China Insight Consulting, the time spent on online audio per mobile active user in 2021 is 131.2 minutes, far exceeding the 87.2, 71.9 and 63.8 minutes of short videos, long videos and online music.
On the other hand, the willingness and ability of Himalayan users to pay is also increasing at a speed visible to the naked eye.
According to the prospectus data, from 201 to 2021, the average monthly active paying users of Theraya mobile terminal accounted for 6.2%, 9.8% and 12.9%, respectively.
While users' willingness to pay increases, the scale of users is also expected to usher in new growth.
According to the data of China Insight Consulting, from 2021 to 2026, the compound annual growth rate will reach 39.5%. Among them, the compound annual growth rate of Internet of Things/vehicle terminals will reach 80.4%.
From the prospectus data, it can also be seen that from 2020 to 2021, the core growth of Himalaya's monthly active users mainly comes from the Internet of Things and other open platforms.
According to the data, the monthly active users of Himalaya Internet of Things and other open platforms have reached 152 million in 2021, an increase of 35% year-on-year, surpassing the monthly active users of mobile terminals. In addition, there are 0.49 billion monthly active users of vehicle-mounted smart terminals and home smart terminals.
According to Lotu Technology, the sales volume of China's smart speaker market in 2021 will be 36.54 million units. Omdia expects global smart speaker shipments to grow at a compound annual growth rate of 20.5% over the next five years.
According to the data of the China Commercial Industry Research Institute, the assembly rate of intelligent network systems in the automotive industry is expected to reach 83% in 2025, and shipments will increase to 24.9 million units, with a compound annual growth rate (CAGR) of 16.1%.
In the future, with the popularity of smart homes, online audio content will obviously have a broader application space, and these spaces will also allow online audio to form a sufficiently differentiated experience with short videos and online music.
But there are also many problems, such as when Himalaya enters the user's life scene through third-party devices such as cars and smart homes, Himalaya has also transformed from a content platform to a content provider.
When the user is not in their own hands, is Himalaya or Himalaya? That's another topic.