As the best two-dimensional cultural community, Station B has been busy "breaking the circle", but building less and less.
The vigorous "circle-breaking" operation at Station B (BILI.US, 09626.HK) was once again blocked.
According to Xin entropy, the live broadcasting business department of Station B plans to lay off employees, and the list has been preliminarily drawn up, and after the Shanghai area returns to normal, it will conduct layoff interviews. The layoffs will affect the entire live broadcasting department.
The reason for the layoffs may be the imbalance between the live broadcast area of Station B and the guild. The live broadcast department "allows" to enter the guild with a higher standard than the industry, and unlimited rebates brush the water, resulting in an imbalance in the ecology of the live broadcast area. The B station official also responded to this, saying that the recruitment is still in progress, the company's business development is good, and did not mention whether to lay off employees.
The fear of the obstruction of the live broadcast business is not empty. There are already UP hosts (broadcasters) who have reported that since April, the creative incentive of the B station platform has decreased by 80%.
The source of revenue for live broadcasting business is mainly the commission share between the company and the anchor. According to the officially announced ratio, the Android side share ratio is 5:5, each 50% (before tax). The iOS side is less than 50% due to Apple's official commission.
"Rebates" is an unspoken rule of station B live broadcasting. The guild will swipe 100 yuan on the live broadcast of station B, the platform will draw 40 yuan from it, and the remaining 60 yuan will belong to the guild.
However, in order to motivate the guild to participate in the live broadcast, the platform will return 20-40 yuan to the union, but sometimes there will be extreme situations, such as the platform has returned 108-109 yuan.
This attracted a large number of guilds to participate in the live broadcast. Therefore, some insiders pointed out that as long as the guild can bring out 10% of the natural flowing water, it will not lose money.
At the same time, the person pointed out that most of the UP owners of station B are their own users, and there has not been a "top stream" UP master until now. For whether to leave the B station, a UP owner frankly said, "At present, everyone is still observing the policy, how to broadcast or how to broadcast."
However, some UP owners said that compared to doing video, live broadcast commercialization is simpler. Not to mention the complicated procedures for making videos, compared with peers, the ability of B station video monetization is relatively poor.
Once the creative incentive of the B station is reduced, there is a possibility of up main loss in the later stage. However, the surge in creative incentive costs has put a lot of cost pressure on Station B.
According to the revenue sharing situation announced by the company in the third quarter of 2021, the revenue sharing cost of Station B includes the fee paid to the game developer, distribution channel (app store) and payment channel, as well as the fee shared with the anchor and content creator.
As of the third quarter of 2021, this cost has accounted for 49.8% of the total cost of total revenue, amounting to 5.3 billion yuan, an increase of 2.3 billion yuan over the entire year of 2020.
Source: Company earnings
The value-added service business accounts for 35.8% of the company's total revenue, which is the largest business of Station B, but the problem of profitability of live broadcasting business has not been solved.
According to the 2021 financial report, although the revenue of value-added services increased by 80% compared with 2020, with an increase of 3.089 billion yuan, the live broadcasting business is still facing the situation of increasing revenue and not increasing profits. In the face of the huge pressure of operational turnaround in 2024, reducing costs and increasing efficiency is the normal thinking of ordinary people.
The supervision of live broadcasting business is becoming more and more stringent. Recently, the policy of no version of the game can not be live broadcast has landed, at this time the game live broadcast business, but also lack of reasons to continue to spend money.
Source: B station financial report
This is already the second business of Station B that has encountered difficulties. Previously, the e-commerce business also made people shine in 2021. At that time, behind the outbreak of e-commerce business, it was the support of blind boxes.
According to company insiders, the blind box business accounts for 80% of the business volume of e-commerce, but the online blind box business later encountered the problem of public opinion criticism and tightening policies.
2021 is a year of great changes, the growth of the entire Internet industry is weak, and the head companies have played the banner of "cost reduction and efficiency increase". Station B is trying to break the circle in this year, and it is also necessary to achieve non-GAAP breakeven in 2024, and Chen Rui's pressure can be imagined.
This time, Chen Rui and Station B ushered in a big test.
Fascinated by the internet play
I don't know when to start, every time the B station's earnings conference call, monthly active data and payment rate are the two things Chen Rui most wants to talk about. Maybe when the market is good, talking about profit and loss data is a little too low.
These two data B stations do a great job. By the end of 2021, the monthly active users of Station B have reached 271.7 million, and the user payment rate has exceeded 9%, and there is still half of the effort space from Chen Rui's goal of 2023 (400 million monthly active users, payment rate of more than double digits).
Source: QuestMobile
According to the linear development trajectory, Station B will also become a leading Internet company. Relying on traditional Internet services such as live broadcasting, advertising, membership and value-added services, it will reap good profits.
Unfortunately, starting from 2021, whether it is user dividends or revenue business, the Internet industry has been affected, and "inner volume" has become a new keyword in the Internet industry.
Taking video as an example, according to QuestMobile data, the user growth of the online video industry shows signs of peaking, but online video companies still do not achieve profitability. Long-term video companies such as iQiyi (IQ.US) began to adjust their business and lay off employees, while Station B was expanding against the trend in 2021.
Source: QuestMobile
Advertising and games are the most important ways for Internet companies to make money. According to the financial reports released by major Internet companies, the growth of these two businesses has slowed down to varying degrees.
In 2021, which comprehensively attacked the Internet, Station B harvested three "fruits": layoffs, loss expansion and "sudden death".
At the beginning of February 2022, the company's 27-year-old Wuhan AI audit team leader "Twilight Wood Heart", because of the New Year's Day was required by the company to work overtime, unfortunately passed away in the evening of the Chinese New Year's Eve, the incident was hyped up on the Internet.
On March 4, 2022, the company announced its 2021 financial report, and the loss continued to expand, and the net loss expanded from 3.054 billion yuan in 2020 to 6.809 billion yuan in 2021, and has not yet seen a slowdown.
It could have stayed in the two-dimensional world and lived well, but Station B did not recognize "life".
The previous B station was a "small broken station" of two-dimensional culture, and its revenue mainly depended on games. When it went public in 2018, the game revenue once accounted for 71% of its revenue, and before the listing, this proportion was even higher, even more than 90% at one point.
After winning the exclusive rights to Fate/Grand Order (hereinafter referred to as "FGO") in 2016, according to Chen Rui, this is the most successful Japanese imported game in Chinese history, and there is no one.
According to the prospectus of Station B, FGO's net turnover in 2018, 2019 and 2020 was 2.1889 billion yuan, 2.1018 billion yuan and 1.3199 billion yuan respectively, contributing more than 5.6 billion yuan in three years. In 2018, the net income of Station B was only 4.1 billion yuan, and FGO exceeded 53% of the net income.
According to App Annie's statistics, FGO ranked first in global revenue in 2018, and Glory of Kings and Monster Marbles ranked second or third.
It is also by relying on the two games of "FGO" and "Blue Route" that the B station has completed the listing. The previous B station was the "driving force" of the two-dimensional culture, and many up-and-coming stars of the two-dimensional game relied on the B station to accumulate the first users, such as Mihayou's "Crash Academy" series.
After the listing, Station B became more and more fond of the so-called "Internet play" and Internet company culture. According to media reports, in terms of business, in 2018, the last place elimination mechanism was strengthened, and "optimization" appeared in the dictionary of B station employees for the first time.
Company culture is also starting to harden. During the Mid-Autumn Festival of the year, the company gave employees mooncakes, which an employee did not want, hung on idle fish and sold, and after being discovered, the employee was directly dismissed. Once the company held a concert, an employee wrote a program script to grab tickets, and was also fired.
Many people in the industry said that Chen Rui is actually the most suitable person to be a community. Station B is the best two-dimensional cultural community in the Asia-Pacific region, which is also the biggest advantage of Station B, but now it is turning to Internet business that is not in the genes.
God likes to tease people, as a two-dimensional element of a niche track, ushering in a big outbreak in 2021.
Lost the second dimension
The second dimension has reached the season of ripening, but the B station has not harvested.
2021 is the trough of domestic games, and it is also the first year of the second dimension outbreak. According to Sensor Tower, the two-dimensional game "Original God" has a total revenue of $1.8 billion in overseas AppStore and Google Play, ranking first in the overseas game revenue list.
Source: Sensor Tower
As a phenomenon-level game, "Original God" directly "ignites" the two-dimensional game. According to the data of the China Game Working Committee, the actual sales revenue of China's two-dimensional mobile game market reached 28.425 billion yuan, an increase of 27.43% year-on-year.
Embarrassingly, it is also in the Yangtze River Delta where the two-dimensional game broke out, and a large number of new game companies were born, such as Mihayou, Lilith, Heartbeat, Paper Folding, Eagle Horn and so on. Half of them make their fortunes by the second dimension, and the other half are closely related to the second dimension, but there is no figure of the B station game of the second dimension community.
Cai Haoyu, the father of "Original God" and an entrepreneur of Miha Tour, admitted at a sharing meeting that it was precisely by relying on the promotion of Station B that it accumulated more than 50% of users.
Chen Rui disappeared from the circle of the second dimension.
Since "FGO", Station B has no more dazzling products. Chen Rui's figure was rarely seen in the world of the second dimension.
The host of Shanghai's famous "Game Circle Spring Festival Gala" is Huang Yimeng, CEO of the old rival TapTap (Heartbeat Company), and the guests are Cai Haoyu and Liu Wei of Mihayou; Lilith Wang Xinwen and Zhang Hao; Wu Meng of giants; Yuan Jing of Mu Hitomi; Yao Jianjun of Flying Fish; Wu Dan of Hero Mutual Entertainment; Zhong Yingwu of FunPlus; Ma Xiaoyi of Tencent, except Chen Rui of Station B.
This is not incomprehensible. The game situation of Station B in 2021 can be described as "bad", and even interpreted by the outside world as de-gamification.
Game revenue growth slowed, with revenue of 5.1 billion yuan in 2021, an increase of only 6% over 2020. Looking back at the game business accounting for 71% in 2018, it dropped to 26% in 2021, losing the throne of business first.
But Station B not only did not abandon the game, but turned to its own development.
According to Data.ai data, the number of games represented by Station B has gradually increased every year, with 10 online in 2019, 15 online in 2020, and 22 online in 2021.
In addition, the investment in game research and development has also been greatly expanded, and the number of R& D teams has exceeded 1,000 people, with R& D expenses of 894 million yuan in 2019, increasing to 1.513 billion yuan in 2020, and higher to 2.840 billion yuan in 2021. Chen Rui once said that in a few years, half of the revenue of the B station game business will come from self-developed products.
Since 2020, 36 game companies have been acquired or invested by Station B.
From the perspective of time distribution, the layout of B station on the game is accelerating, investing 10 in 2020, investing 19 in 2021, investing 7 in the first quarter of 2022, and investing 4 in the last 8 days, this frequency is even comparable to Tencent.
Investing so much, the B station game has not "burned" out a top stream, which may be what B station and Chen Rui should reflect. A senior person said that seeing the rise of new game forces such as Mihayou and Lilith, he suddenly felt that the previous playing style of the game industry was not very good.
Where is Station B going?
Chen Rui should be the person who knows station B the most. In 2011, after meeting the founder Chen Rui, he became an angel investor and business consultant of Station B, and has been following up the A round B round.
After Cheetah Mobile (CMCM.US) successfully listed in the United States in 2014, Chen Ruigong, as a co-founder, retired and officially joined Station B as a partner. Later, Chen Rui became the actual controller, and Xu Yi retreated into the background.
In 2014, Chen Rui began to carry out drastic reforms to Station B. Under his leadership, Station B has successively applied for video license applications, removed non-compliant content, purchased the copyright of the drama, and made efforts to release games to prepare for listing.
In 2018, Station B achieved the listing of the NASDAQ exchange.
Four years later, this year, at a fork in the road, this time the situation is not very optimistic. As a two-dimensional cultural community, in the face of the outbreak of two-dimensional games, Station B has gained very little, but has fallen into the "quagmire" of the Internet.
What to do at Station B? Want to do everything is a typical Internet play, the current Internet industry encountered a cold wave, visual inspection has to last for a long time, B station really can afford it?