Himalayas lost 2 billion yuan in three years, and the "ear economy" was unpaid

「Core Tips」

Switching from U.S. stocks to Hong Kong stocks, online audio platform Himalaya submitted a prospectus for the third time. Although the listing can obtain the "blood transfusion" of funds, it cannot solve the dilemma of insufficient "hematopoietic" ability. In the past three years, Himalaya has lost more than 2 billion yuan and still has not found an effective way to liquidate. Where are the ceilings of the Himalayas? Will it be able to successfully solve its own commercialization problems in the future?

Author| King?

Edited by | Liu Yang

In the field of domestic Internet entrepreneurship, Fujian businessmen can be said to occupy half of the country, such as Wang Xing, founder of Meituan, Zhang Yiming, founder of ByteDance, Chen Lei, CEO of Pinduoduo, and Lu Zhengyao, former chairman of Luckin Coffee. With the online audio platform Himalaya being exposed to the third submission of the prospectus, the Internet listed company is expected to usher in a new member - Yu Jianjun, a native of Pucheng, northern Fujian.

In 2012, Yu Jianjun, who has continuous entrepreneurial experience, founded Himalaya FM to focus on the field of online audio. At that time, Koala FM, Lychee FM and Himalaya were launched in the same year, and Dragonfly FM was born a year earlier than the previous ones. The reason why the entrepreneurial project was named Himalayas was inspired by Amazon and Alibaba, according to Yu Jianjun.

But what really made Himalaya famous was Ma Dong's launch of the paid course "Speak Well" on the platform in 2016. On the day of the launch, it sold more than 5 million yuan and broke through 10 million yuan in a week's income, which not only made Ma Dong and his back Mi Wei Media earn a lot of money, but also made the Himalayas, who were not yet famous at that time, quickly "out of the circle" and quickly grew into a leader in the domestic online audio track.

However, so far, Himalaya is not at ease, the slowdown in revenue growth, the loss continues to expand and other issues, is still the dilemma faced by Himalaya and the entire sound track.

As the absolute head platform in the track, what is the commercial background of the Himalayas? Where is the ceiling? Is the listing a "Himalaya" that is difficult to climb for Himalaya?

1. It is difficult to escape the curse of content platform profitability

As a kind of existence in content entrepreneurship, In the ten years since its inception, Himalaya has received investment from many well-known institutions such as Tencent Investment, Yuwen Group, Goldman Sachs Group, Baidu, Xiaomi Group, etc., and has obtained the first place in the average monthly active users of china's online audio application mobile main application.

But similar to the problems faced by many content startup projects, Himalaya is also mired in the problem of slowing revenue growth and the commercialization of profitability. Even Yu Jianjun himself has said that "there is no profit schedule."

According to the prospectus, from 2018 to 2021, Himalaya's revenue increased year by year, from 1.481 billion yuan to 5.857 billion yuan. However, the hidden worry behind the revenue growth is the slowdown in growth, from 2019 to 2021, the company's revenue increased by 82.2%, 51.1% and 43.7% respectively, and the downward trend is more obvious.

Even with 268 million average monthly active users across the board, and the current average monthly active paying users and paid members on mobile terminals are 14.9 million (12.9% of the payment rate) and 14.4 million (12.4% of the payment rate), Himalaya is still in a continuous loss situation, and the loss has a tendency to further expand.

From 2018 to 2020, Himalaya's pre-income tax losses were $3.142 billion, $1.925 billion and $2.882 billion, respectively. By 2021, the loss of 5.106 billion yuan will almost double year-on-year. Even under non-IFRS measures, its net losses from 2018 to 2021 amounted to $756 million, $748 million, $539 million and $759 million, respectively.

For Himalaya's "curse" of non-profitable operation that has been increasing revenue for several years, a senior industry observer told Leopard Change: "As the head platform in the long audio field, the loss problem suffered by Himalaya is very similar to that of long video content platforms such as Youaiteng, which is nothing more than the scale of cost expenditure is much higher than the sum of business revenue. ”

In addition to the rising cost of customer acquisition and operating costs of long video platforms, the biggest cost burden is reflected in the content copyright. iQiyi, Tencent Video, and Youku not only spend huge sums of money to purchase film and television dramas and variety show copyrights, but also directly participate in the production of original programs in recent years, and the average annual content investment of the three major platforms has reached tens of billions of yuan.

The industry insider further explained: "The main monetization method of long videos such as Aiyouteng is in the membership subscription and advertising business, but these revenues cannot cover the cost at all, which directly leads to the fact that several platforms are still unable to reverse the loss." ”

"The same goes for the Himalayas. Himalaya's early revenue support was mainly advertising, but the platform must balance the user experience and short-term revenue considering the impact of advertising on user size, activity, and willingness to pay. Fortunately, Himalaya has chosen to increase the content system, making its own income structure more reasonable, and subscriptions, advertising, live broadcasting, and innovative businesses have their own seats. The person said.

"However, this will inevitably continue to push up the expenditure on content purchase, sales and marketing, and the sum of these two costs in the prospectus accounts for about 80% of the revenue per year, so it is a loss."

It is not difficult to see that the tried-and-true "rule of no two" in the field of Internet entrepreneurship - through the burning of money marketing to increase the scale of users, seize market share, and then consider the profit of the business logic has begun to "fail".

The fading of traffic myths, coupled with the decline in the overall scale of enterprise-side online advertising, the "spring" of the online audio industry may come later than expected.

2, the listing can only "blood transfusion", can not "hematopoiesis"

For investment institutions, ten years is enough to give a relatively objective conclusion about the commercial value of a certain track and the commercial value of the head players in this track. After all, the so-called high-quality assets should not only have a reasonable business model, but also meet the pursuit of capital's value of time.

In other words, the enterprises invested by the institution must have a deep "moat" and good growth expectations. But these expectations are not fully reflected in the Himalayas, who claim to link content creators and listeners through sound. This is probably also the reason why the patience of capital has been polished.

Yang Xiaoyan, a content producer who has operations on WeChat public accounts, major media content platforms, video numbers, Jitter Express, B station, and Himalayas, told Leopard Change that his current main position is more in graphics and video platforms, and audio platforms like Himalaya are only occasionally operated.

As for the specific reasons, "Leopard Change" combines Yang Xiaoyan and some other multi-field operation content creation, and summarizes the following levels of answers -

The first is the platform's incentive mechanism for content creators, which is also the most important point for this part of the population that relies on content creation to make a living, compared to other platforms that often hold tens of billions of traffic, cash and other resource packages, Himalaya's incentive policy is extremely weak, and the description of rights and interests is vague every time the incentive statement is issued.

Yang Xiaoyan told "Leopard Change": "Take station B to compare. The original incentive policy of Station B at the end of 2021, content creators can get up to 70% of the shares, and the completion of advanced tasks can accumulate rewards for a long time, and creators can also superimpose the rights and interests of signing basic salaries and activity rewards. If the monthly turnover can reach more than 5 million, it can also activate additional tasks with higher rewards. ”

Most of the incentives she gets from Himalayas are more general, "the platform will tell you that there is traffic, there is cash, but it will not clearly give quantitative figures, such as the highest percentage of the share, how to give cash."

Second, for the user, the presentation of audio content is one-dimensional, corresponding only to hearing. Graphics, videos, and live broadcasts are a mixture of visual and auditory dimensions, and can even mobilize people's emotions, making it easier to retain users.

Finally, there are copyright and other reasons. Some content creators say that some audio content may not have a problem at the time after uploading, but after a while it will be notified that there are copyright issues involved, and then all kinds of tears will begin. In a way, this is also a common problem faced by 13.5 million UGC creators on the Himalaya platform.

Of course, there are also some content creators on the Himalayas who say that as voice actor enthusiasts, they record audio content to share mainly based on interest, satisfying their own feelings.

The ecological atmosphere of 13.5 million UGC, 380 PGC, 9300 PUGC, and the not-so-good business situation make the listing financing a key battle in the development of Himalaya.

It must be mentioned that listing can only "transfuse" blood for a company, and cannot help companies improve their "hematopoietic" capabilities. That is to say, on the basis of unchanged business logic, listing cannot essentially change anything. This can be seen from Lychee, an audio platform that has a certain degree of overlap with Himalaya at the business level.

Litchi, which was listed with the aura of "the first share of online audio", did not perform well in the capital market. Just one year after its listing, Lychee's market value shrank by nearly 60%. Although around the Spring Festival in 2021, with the "ClubHouse" of the audio social software of the technology "madman" Musk, the lychee has also turned red, but the highlight moment is fleeting.

Over the past few months, Litchi's share price has been swinging around $1, and on March 1, 2022, it hit an all-time low of $0.87. Compared to the initial public offering price of $11, Lychee shares shrank by more than 90%.

As for the market prospects of the big audio track, according to the latest report of Essence Securities Research Center, the size of the global online audio market will grow from 10.5 billion yuan in 2018 to 30.7 billion yuan in 2023, but in the next 3 years, both content production and profit growth trends will slow down significantly.

Referring to the stock price trend of Lychee, even if the IPO is successfully passed, it is difficult to say whether Himalaya can have a good performance in the capital market after listing.

3. The strategic swing behind multiple transformations

Looking at the entire audio track, in addition to Himalayas, lychees, and dragonflies, since 2020, many "spoilers" have poured in: "Cloud Listening", a comprehensive sound integration distribution platform under the Radio and Television Corporation, Tencent Music, which sets long audio as a long-term strategy, "Tomato Listening" promoted by Byte, and a rapidly popular podcast platform Small Universe.

This makes the already not-so-rich "ear economy" sector more crowded, and the Competitive Pressure on the Himalayas, which occupy the "top spot", is increasing.

The drumbeat of "storytelling" is the possibility of business "prosperity", and Himalayas has been thinking about how to tell "stories" more beautifully. This leads to the all-content intelligent AI speaker product launched by Himalaya in June 2017 - Xiaoya.

However, according to Aowei Cloud Network (AVC) "2021 H1 China Smart Speaker Market Summary Report", since 2019, the industry has been presenting a three-legged situation of Tmall Genie, Xiaomi and Xiaodu.

Starting from the second quarter of 2019, Tmall Genie and Xiaodu first set their sights on the three major operators and established cooperation, and the three major operators became the main incremental channels for the offline market of the smart speaker industry.

In the subsequent time, several companies actively expanded B-end channels, such as the hotel service industry, the real estate industry, as well as Channels such as Pinduoduo and Online Live Broadcasting. Thanks to the expansion of many channels, the sales scale of several intelligent hardware companies in the industry during the epidemic has maintained positive growth.

The Himalayan Xiaoya did not make any splashes in the market, which was expected. Objectively speaking, not only Xiaoya of the Himalayas, but also other latecomers in this market are difficult to really pose a threat to the three major "players" of Tmall Genie, Xiaomi and Xiaodu.

So Himalayas found another new story, that is, the "Internet of Things".

Flipping through the Himalayan prospectus, the term "Internet of Things" appears 92 times. In 2021, Himalayas had an average of 268 million monthly active users, including 116 million mobile users and 152 million monthly active users listening to audio content through the Internet of Things and other open platforms.

In the prospectus, Himalaya said it has partnered with 74 automakers to provide in-vehicle audio content through pre-installed devices, and has also established partnerships with some of the leading smart home appliance manufacturers.

At the same time, it can also be seen from the industry research notes that Himalaya has repeatedly implanted in the prospectus of China's online audio industry mobile terminal, Internet of Things/car and other open platforms to obtain customers, market prospects, etc., it can also be seen that the Internet of Things may have become a new outlet for Which Himalaya has placed high hopes.

Coincidentally. Lychee is also trying to stimulate the market's attention through "storytelling". Not long ago, Lychee announced that it would actively embrace some innovative concepts such as meta-universes and NFT digital collections, hoping to drive more commercial play.

However, whether it is wading in the field of intelligent hardware or the field of layout of the Internet of Things, to a large extent, most of the operations of Himalaya are stepping on the "wind outlet" and hoping to break out a path through "borrowing the wind". This strategic vacillation also reflects a certain helplessness in the Himalayas.

What's more, in recent years, "other innovative products and services" including the sale of self-developed Internet of Things devices, IP-derived cultural and creative products, customized audio services, e-commerce and audio trans-text publishing have accounted for 7.1%, 6.9% and 6.4% of revenue, respectively.

There is not much time left for the Himalayas.