The first double drop, Mango Super Media pressed the pause button

Wen|Kunyu Business Watch Li Xiaoyao

Mango Super Media, the only long-form video platform in China that can sustainably make profits, has also encountered a bottleneck in development.

On April 21, Mango Super Media released its 2022 annual report, with revenue of 13.704 billion yuan, down 10.76% year-on-year; The net profit was 1.825 billion yuan, down 13.68% year-on-year, which was the first time since the restructuring and listing in 2018 that both revenue and net profit declined.

Different from other Internet video platforms, Mango Super Media, which is backed by Hunan Satellite TV, has an innate advantage in IP resources and input costs. However, as the competition between major platforms around self-made boutique IP becomes more and more intense, Mango Supermedia's IP advantage has also begun to weaken, and the lack of growth has become more and more obvious.

On the other hand, new business has little effect. In 2023, how should Mango Super Media break the game?

The advertising business is dragging its feet

In 2022, the revenue of all Mango Super Media businesses declined.

Among them, the revenue of Mango TV's Internet video business was 10.418 billion yuan, down 7.49% year-on-year; The revenue of new media interactive entertainment content production and operation business was 1.118 billion yuan, down 40.45% year-on-year; The revenue of content e-commerce business was 2.136 billion yuan, down 0.97% year-on-year.

Overall, the revenue of Mango TV's Internet video business, new media interactive entertainment content production and operation business, and content e-commerce business accounted for 76.02%, 8.16% and 15.59% of the total revenue respectively. Among them, the proportion of new media interactive entertainment content production and operation business decreased by 4.07% year-on-year, and the proportion of the other two major businesses increased.

Undoubtedly, the decline of the dominant Mango TV Internet video business directly affects the total revenue of Mango Super Media.

Mango TV's Internet video business is divided into three businesses: advertising, membership and operator. Among them, the advertising business is still under pressure, with revenue of 3.994 billion yuan, down 26.77% year-on-year. The revenue of membership business was 3.915 billion yuan, a year-on-year increase of 6.15%, thanks to the new high membership scale, and the number of effective members reached 59.16 million at the end of 2022. The revenue of operator business was 2.509 billion yuan, a year-on-year increase of 18.36%, and the performance was stable.

It can be seen that the sharp decline in advertising revenue has dragged down Mango TV's Internet video business, which is the first time since 2018 that advertising business revenue has declined, and at the same time, the proportion of revenue of this business is getting smaller and smaller. Previously, advertising revenue has been ahead of the membership business by more than one billion and ahead of the operator business by more than two billion, but now, the revenue of advertising business and membership business are nearly the same. For the sluggish advertising business, Mango Super Media explained in its financial report that it was caused by the adverse impact of the decline in the Internet advertising industry.

In fact, before 2022, everything is good with Mango Supermedia's data. From 2018 to 2021, the revenue of Mango Super Media was 9.661 billion yuan, 12.501 billion yuan, 14.006 billion yuan and 15.356 billion yuan, respectively; The net profit was 866 million yuan, 1.156 billion yuan, 1.982 billion yuan and 2.114 billion yuan respectively.

During the period, the revenue of Mango TV's Internet video business was 4.180 billion yuan, 6.318 billion yuan, 9.061 billion yuan and 11.261 billion yuan respectively, accounting for 43.26% of the total revenue all the way to 73.33%. Among them, the revenue of advertising business was 2.41 billion yuan, 3.35 billion yuan, 4.14 billion yuan and 5.45 billion yuan respectively.

It can be said that the performance of the advertising business is a barometer of Mango Supermedia.

Industry critic Zhang Shule believes that Mango Super Media is the earliest and continuously profitable streaming media platform, and the occasional decline in revenue and net profit is more vigorous in program production investment, which belongs to a normal expansion boundary.

Zhang Yi, CEO of iMedia Consulting, said that the large environmental impact is one of the reasons for the double decline in Mango Super Media's financial report, but it cannot be denied that the lack of explosive products and problems in its own operation and management need to be improved.

The real pressure comes

Unlike Youaiteng, which has been in a loss-making state for many years, Mango Super Media has always maintained a profitable state after announcing a profit in 2017, which is inseparable from the support of Hunan Satellite TV behind it.

Since 2014, Hunan Radio and Television has sold the copyright of Hunan Satellite TV programs to Mango Supermedia at a low price, so that the content production cost of Mango Supermedia can be kept low. The content and advertising of the two are also interchangeable, so Mango TV is more like the online platform of Hunan Satellite TV.

Mango Super Media claims that it has always adhered to the concept of "no innovation or death", but the overall investment in R&D has not changed much, while the number of R&D personnel has been decreasing.

From 2018 to 2022, Mango Supermedia's R&D expenses will be 221 million yuan, 239 million yuan, 184 million yuan, 272 million yuan and 235 million yuan, respectively, accounting for 2.5% of the total revenue. The number of R&D personnel is 645, 645, 622, 595 and 535 respectively.

The R&D investment of other long-form video platforms has already exceeded double digits, and the R&D investment of iQiyi, Bilibili and other platforms has accounted for more than 10% of the revenue.

At the same time, there is also a potential crisis in Mango Super Media, that is, the growth rate of the membership business slows down. From 2018 to 2022, the membership growth rate will be 102%, 92%, 13.3% and 6.15% respectively, while the number of members of less than 60 million is less than half of Youaiteng, and the number of members of Youaiteng has exceeded 100 million as early as 2018.

"The growth of Mango Super Media membership is subject to the saturation of the total number of Chinese netizens, and it is not alarmist to gradually approach the ceiling, and there is not much room for large-scale increase in the number of users to improve in the future." In addition to increasing membership fees, other monetization models can be explored, such as increasing ad exposure, interactive live streaming, and other new product innovations. Zhang Yi told Kunyu Business Watch.

However, in Zhang Shule's view, Mango Super Media is still a certain distance from the growth ceiling of members, on the contrary, it should be Youaiteng who is more worried. At the same time, Mango Super Media due to its traditional TV station base, so that it has more experience and scene expansion possibilities in more revenue scene exploration, and may not be subject to membership fees.

In terms of content, in 2022, Mango will launch 77 variety shows and 163 film and television dramas, but the more eye-catching ones are still concentrated in variety shows, including "Riding the Wind and Waves Season 3", "Detective Season 7", "Escape Room Season 4" and "Through Thorns Season 2" 4 comprehensive N-generation programs, as well as the innovative program "Endless Sound - Hong Kong Music Season" and so on.

Taking the ace show "Sister Riding the Wind and Waves" as an example, its score on Douban dropped from 6.7 points in the first season to 5.8 points in the third season; its investment data, which had set a number of records, also declined, and the number of advertisers decreased from more than 40 to 27.

At the same time, popular variety shows such as "Run", "The Voice of China", "Ace to Ace" launched by Zhejiang Satellite TV and "Extreme Challenge" launched by Oriental Satellite TV have also had a certain impact on Mango. According to the statistics of CSM's Ratings China, Zhejiang Satellite TV will surpass Hunan Satellite TV to become the top of CSM64 cities in 2022, and almost all of this position was held by Hunan Satellite TV in the previous five years.

In addition, compared with other long-form video platforms, Mango Super Media's film and television works are far less popular than Youaiteng.

The best performer in terms of opponents is iQiyi, whose recently released financial report for the first quarter of 2023 showed that the net profit attributable to iQiyi (Non-GAAP) was 940 million yuan, a year-on-year increase of 480.25%. Under this standard, iQiyi has achieved profitability for five consecutive quarters since the first quarter of 2022, benefiting from the popularity of a number of self-made content, including "Crazy". It is reported that in the first quarter, self-made content accounted for 70% of iQiyi's key new content.

Hindered by itself, the opponent exerts strength, and the pressure of Mango Super Media is not small.

In Zhang Yi's view, Mango Supermedia's self-made explosive IP resources are indeed an important advantage, but relying only on self-made IP to remain competitive is not completely safe. Mango Super Media needs to actively expand co-production, copyright purchase and other channels, and at the same time pay attention to the quality control and innovation of content.

The new business had little effect

In fact, Mango Super Media is also looking for a new way out. But so far, little has been achieved.

It is reported that Mango Supermedia's content e-commerce business includes Happy Shopping E-commerce Business and Xiaomang E-commerce. Happy shopping e-commerce business focuses on TV shopping business and supply chain construction and expansion, and creates a closed-loop service platform and tool platform around TV large screen and TV crowd sales. Xiaomang e-commerce was only launched in 2021, positioned as a "new trend domestic content e-commerce platform", deeply focusing on the integration of IP content and e-commerce formats, relying on content to incubate multiple characteristic product lines, and creating a pendant mang-like brand. At the same time, strengthen the overall linkage with the mango ecosystem, and further expand the cooperation matrix of domestic brands with the help of IP cooperation rights.

Perhaps due to the short online time, the financial report did not give the specific revenue contribution of Xiaomang E-commerce, only revealed that the GMV of the whole year reached 7 times that of the previous year, and the peak DAU reached 2.06 million, and the business development results began to show. At the same time, during the reporting period, Xiaomang E-commerce completed the first round of financing, introduced the necessary liquidity for the strategic cultivation period, and accelerated the construction of a business closed loop of "content + video + e-commerce".

Zhang Yi pointed out that Xiaomang e-commerce needs more market publicity and brand cultivation, especially in terms of professionalism and supply chain, and needs to further improve its own supply chain, logistics, customer service and other systems to improve user experience and expand influence.

For a long time, the performance of Mango's super media content e-commerce business has been relatively stable, but the proportion of revenue is not high. From 2017 to 2022, the revenue of this business was 2.832 billion yuan, 1.99 billion yuan, 2.007 billion yuan, 2.105 billion yuan, 2.157 billion yuan and 2.136 billion yuan, respectively; The proportions in the total revenue were 34.24%, 20.60%, 16.06%, 15.03%, 14.05% and 15.59% respectively.

In 2022, the gross profit margin of Mango's super media content e-commerce business was 6.4%, a year-on-year decrease of 2.33%. The Xiaomang e-commerce app has been installed in the Huawei App Market and Xiaomi App Market with a total of more than 20 million installs, with scores of 1.5 and 3.0 points, respectively, and the feedback from users is mostly due to problems existing in the e-commerce platform, such as too high prices, too slow delivery speed, and customer service not responding to messages.

For the development space of Xiaomang e-commerce, Zhang Shule said that trial and error is the inevitable expansion of profit scenarios in long videos, and IP derivation has always been the most imaginative space, and it has great blue ocean value in the Chinese market, just depends on what way it is achieved.

In addition to exploring new businesses, partnering with short videos is also a major trend on long-form video platforms. Up to now, Sohu Video, iQiyi, and Tencent Video have reached cooperation with Douyin. At the same time, LeEco and Kuaishou also came together.

In the financial report, Mango Super Media also mentioned when analyzing the industry situation that the deep integration of long and short videos is the general trend. However, at present, Mango Super Media has not disclosed any news about the cooperation, only saying that it will increase the degree of protection of rights for copyright infringement.

In this regard, Zhang Shule believes that long and short video cooperation is only resource exchange and heat mutual guidance, which is a kind of "mutual market" in the stage of competition and stalemate, and Mango Super Media should not be exempt from vulgarity.

Zhang Yi said that Mango Super Media cooperation with short video platforms is a possible choice, but it is also necessary to evaluate the costs, benefits and risks of cooperation according to the actual situation and make wise decisions. At the same time, you can also consider further expanding your own short video business and evaluating the drainage effect of short video platforms to improve competitiveness.