With the release of financial reports by various platforms in the second quarter, the profitability of long-form video platforms has once again attracted attention.
Represented by iQiyi and Alida Entertainment, it has not only gradually turned losses into profits, but also further reduced costs and increased efficiency through the embrace of new technologies such as AIGC, while discovering and exploring new growth points, thereby giving the market more confidence.
Mango Super Media, which has gradually fallen behind in the drama field in recent years, has also begun to develop diversified routes through live streaming e-commerce and micro-short drama business. And Station B, which once said that it would achieve a turnaround in 2024, constantly stepped on the "throttle" on the road to commercialization and began another game.
The following is the Q2 financial report combing of Tencent, iQiyi, Mango Super Media, Ali Da Entertainment and Station B:
Tencent:
According to the financial report, Tencent's revenue in the second quarter of 2023 was 149.2 billion yuan, a year-on-year increase of 11%, and its net profit was 26.17 billion yuan, a year-on-year increase of 41%. Compared to the previous quarter, revenue and net profit continued to grow.
Growth in advertising revenue was a highlight of the quarter, up 34% year-over-year. The online advertising business became the main driver of revenue growth.
Since last year, accelerating the commercialization of Channels has been put on Tencent's agenda. From the creators of Channels to the paid subscription membership system, the entire content ecology is gradually improving.
Tencent Video's paid membership decreased 5% year-on-year, but increased 2% sequentially to 115 million. Overall, despite the decline in paid memberships, the growth rate has remained steady.
It is worth noting that the launch of X Theater in the first half of this year highlights Tencent Video's strategy of creating high-quality content. Theatrical operation once again allows the market to see the platform's independent broadcast advantages, and it is also amplifying the brand's launch advantages.
X Theater's flagship drama "Long Season" has a Douban score of 9.4, and "Huan Yan" launched during the summer vacation also has 7.9 points. In the 12-episode "Long Season", brands such as Tongcheng Travel, Nescafe, ForceStretch, Nanfu Battery, and Jinshuibao were launched. Among them, Tongcheng Travel saw a 520% increase in the WeChat index.
Small volume and strong genre are one of the characteristics of X theater, and dramas of this type often have a fixed audience, which is more conducive to accurately reaching the circle and strengthening the delivery effect for brands. Therefore, for the platform, it is a favorable channel to accumulate users and attract brands to go in both directions.
It can be seen that small and beautiful high-quality dramas have not only become a differentiated play method for various platforms at present, but also made the brand more confident in the long-tail effect of the subsequent fermentation of the series.
In addition to Channels, value-added service revenue, which increased by 50% year-on-year, and fintech and enterprise services revenue, which increased by 32% year-on-year, were also important factors driving Tencent's revenue growth in the quarter.
iQIYI:
In the second quarter, iQIYI's total revenue was RMB7.8 billion, a year-on-year increase of 17%; Membership service revenue was 4.9 billion yuan, a year-on-year increase of 15%. Compared with the first quarter, the growth of membership business has slowed down, and the overall growth trend is still obvious.
Among them, membership services and online advertising, as the two major growth points, are the main drivers of Q2 revenue growth. Content distribution and other revenue generated revenue of $553 million and $807 million, respectively, up 15% and 16% year-over-year.
Average daily subscriptions reached 111 million in the second quarter, up 13% year-over-year. At the same time, the membership structure has been further optimized, and the number and proportion of annual pass members have achieved significant growth compared with the same period last year.
iQIYI said that the steady growth of membership service revenue was mainly due to the increase in the number of subscription members and continuous refined operations, which improved its monetization ability. Strong growth in performance advertising and the performance contribution of brand advertising drove the overall increase in online advertising revenue.
Compared with the "soaring" progress of the first quarter financial report, iQiyi's growth rate in Q2 was relatively flat and continued to maintain a stable growth stage.
"High-quality content helped the company achieve its best performance in the second quarter in its history, with solid performance in key metrics such as total revenue, profit, free cash flow and average daily subscriptions." iQiyi founder and CEO Gong Yu said on the same day's earnings call.
In the first quarter, when membership service revenue and the number of subscription members both recorded the best performance in the historical quarter, both the market and the audience gave great expectations to iQIYI.
Although the pulling effect of the head content is further amplified, at the same time, the fatigue of the Mist Theater and the underperformance of the ancient puppet drama in the summer vacation have become several factors affecting its Q2 performance.
Based on this, iQiyi is also trying to develop and find a second growth curve. In the first half of 2023, iQIYI established the "AIGC Content Technology Innovation Center" internally to continue to explore more scenarios of AIGC and film and television entertainment business scenarios.
"By introducing AIGC to empower content production and operation, iQIYI expects to 'improve quality and efficiency' at the level of content operation and content promotion while continuously optimizing the user experience," said the person in charge of iQIYI's AIGC Content Technology Innovation Center, adding that many of iQIYI's "breaking 10,000" content IPs have now used AIGC assistance in on-site operations and off-site promotion.
Mango Supermedia:
On August 17, Mango Super Media first disclosed its semi-annual report. During the reporting period, the company achieved operating income of 6.689 billion yuan and net profit of 1.251 billion yuan, a year-on-year increase of 5.04%; Revenue in the second quarter was 3.633 billion yuan, an increase of 18.86% from the previous quarter; Net profit was RMB706 million, up 29.5% month-on-month.
The main driving force for Q2 revenue growth is not only membership and advertising business, but also carrier business. At the same time, advertising revenue declined.
According to the report, the revenue of the company's membership business in the first half of the year reached 1.961 billion yuan, a year-on-year increase of 5.54%; The revenue of operator business reached 1.389 billion yuan, a year-on-year increase of 15.18%; The advertising business achieved revenue of 1.790 billion yuan, down 17.23% year-on-year.
On the operator side, Mango TV's cross-platform cooperation strategy is beginning to bear fruit. In terms of members, Mango TV and China Mobile have cooperated to launch the "Mango Card" on a pilot basis in Hunan Province, with more than 1 million new users; Partnered with Taobao Tmall to create 88VIP. Taobao is not only the title dealer of Mango's "Hello, Saturday", but also appears in other variety shows.
In terms of self-made dramas, with a strong content team, Mango TV still ranked second in the number of variety shows and broadcast index in the first half of the year, and ranked fourth in market share.
In the field of micro-short dramas, its position in the long video platform is still solid. Detaven data shows that in the first half of the year, Mango TV had a total of 5 micro-short dramas listed in the TOP30 micro-short drama prosperity index. "Wind and Moon Change" is the first micro-short drama project of Da Mang Theater that has exceeded 10 million in accounts. In the field of e-commerce, the operating income of content e-commerce business in the first half of the year reached 1.25 billion, a year-on-year increase of 32.05%.
As for the landing action in AIGC, in June this year, Mango TV officially released the AIGC HUB platform, accelerating the penetration of content in the early stage of creation, post-release and other links. The return of the old variety show "All Staff Acceleration" is also linked with the meta-universe to open up new gameplay such as the combination of virtual and real.
Not long ago, Mango TV's move to acquire Golden Eagle Cartoon Company was also interpreted by industry insiders as promoting the development of value-added services and opening up more growth curves.
Ali Entertainment:
On the other side of the story, Ali Da Entertainment, which became independent for the first time ten years later, began to turn a profit.
On August 10, Alibaba released its financial report for the first quarter of fiscal 2024 (the statistical period is the second quarter of 2023), with revenue of 5.381 billion yuan, an increase of 36% compared with 3.966 billion yuan in the same period of the previous year, and adjusted net profit of 63 million yuan.
Alibaba Entertainment includes three core businesses, mainly Youku, Alibaba Pictures and Damai, covering dramas, movies and offline performances. The growth of net profit reported this time has been driven by the growth of Alibaba Pictures and Damai.com.
Among them, "Long Moon Ember Ming" starring Luo Yunxi and Bai Lu was second only to "Crazy" in the first half of the year. According to the data of Jiao Yang Insight, in the first half of the ancient puppet drama, "Long Moon Ember Ming" performed prominently, and in the 27 episodes broadcast, there were 22 cooperative brands, all of which were self-solicited investment on the Youku platform, and the investment promotion of film and television dramas ranked first in the same period. Among the top 5 dramas, Youku occupies 4.
With the return of the film industry and offline performance industry, the revenue growth of Alibaba Pictures and online platform business is also strong.
According to Maoyan Professional Edition data, Alibaba Pictures will participate in the production of 12 films in 2023, and 8 have been released so far, with a total box office of 11.22 billion. Among them, 7 films exceeded 100 million at the box office, and 3 exceeded 1.5 billion at the box office. There are 8 films produced by the owners of Ali Film, with a total box office of 3.676 billion.
As the main producer, the two films "Disappearing Her" and "Desperate" participated in by Ali Pictures have ranked among the top two in the summer vacation box office list. "Disappearing Her" temporarily ranked first, with a cumulative box office of more than 3.5 billion and breaking a series of box office records. For example, it won the single-day box office crown for 17 consecutive days; The box office exceeded 2 billion in 10 days of release, becoming the box office champion of domestic suspense dramas and so on.
As the exclusive broadcast platform for TFBOYS' ten-year concert, Youku has obvious resource advantages. The concert had a cumulative audience of 1.68 million, and tickets for offline performances were hard to find, becoming a "two-way engine" that drove the growth of video platform users and offline business revenue.
At the same time, this year, there is another company that single-handedly made Ali Entertainment the focus of attention.
With the popularity of AIGC, the "Miaoduck" camera makes offline photo studios such as the hippocampus "shudder", which is a product of Alida Entertainment. In the future, Miaoduck Camera will also be integrated into Shenli Vision, the main body of Ali Da's technology business, and continue to make efforts in the AIGC business field.
Station B:
In the second quarter, the total revenue of Station B reached 5.304 billion yuan, a year-on-year increase of 8%; Gross profit increased 66% year-over-year and adjusted net loss narrowed 51% year-over-year.
Among them, value-added services and advertising business are the two businesses that contribute the most to revenue. The overall profit performance exceeded market expectations, which is also in line with the strategic layout of Station B to accelerate commercialization.
In terms of value-added revenue, the drive of live broadcast revenue is more obvious. Driven by a 32% year-on-year increase in live broadcast revenue, the value-added service business revenue of station B also increased by 9% year-on-year, with a stable growth rate. More and more UP owners are joining the ranks of live streaming and video delivery. The number of UP owners who generate revenue through live streaming and video delivery increased by more than 220% year-on-year.
The exploration of e-commerce business and live streaming is the area that Station B has paid more attention to since last year. To this end, more and more UP owners have begun to change their thinking and join the ranks of live streaming and video delivery. Taking the head UP master as an example, during the 618 period this year, the first live broadcast of the main sword sister-in-law of the B station UP performed brilliantly in the industry, with a GMV turnover of 28 million yuan and a total transaction volume of more than 250,000 orders.
At the same time, due to the strong stickiness and trust established with fans, many mid-waist UP owners are also worthy of attention in the fields of home and electronic digital. UP's main @Mr Fan Maze once set an annual GMV of 700 million. It can be said that station B has initially achieved certain results in building user consumption scenarios.
In the second quarter, station B advertising revenue was also a bright spot. Performance advertising, brand advertising and fireworks advertising all contribute a lot to the revenue. With strong community advantages, e-commerce advertising revenue also increased by more than 140% year-on-year.
The contribution of the game business of station B was stable, with a year-on-year increase of 35.84%, and it was the business that contributed the most incremental revenue for two consecutive quarters.
The average daily active users reached 96.5 million, an increase of 15% year-on-year, and the average monthly active users reached 324 million. The average daily usage time of users reached 94 minutes, a record high in the same period, driving a 22% year-on-year increase in total usage time. The full member retention rate remains at 80%.
Highly sticky users are inseparable from the OGV layout of station B. Starting from self-made content, Station B basically maintains the rhythm of launching 1-2 self-made dramas a year. Since last year, the pace has slowed down, but the quality and word of mouth have basically maintained.
At the beginning of this summer's vacation, Station B also launched the homemade costume crossing drama "Ancient Lovesickness", although the volume of the play is small, but the Douban score is 8.6 points, occupying the first position in the Chinese word-of-mouth drama list for two consecutive weeks. However, this has also become a problem for station B in recent years around the OGV layout - the quality is passed, but it is difficult to compete with other long video platforms in terms of out-of-circle and traffic.
There is not much time left for Station B to achieve breakeven in 2024, which was previously promised, and for Station B, which has just entered the e-commerce live card table, whether the future live streaming results can continue the results of 618 Sword Search still needs to be put a question mark.
Overall, the revenue of several long-form video platforms is good, and their performance in the first half of this year has its own merits. With the recovery of the advertising industry, the effect of drama delivery has also improved. From the perspective of business distribution, each platform has a different focus, and is stepping up to find new growth channels and accelerate the commercialization process. It is foreseeable that the relevant layout of the AIGC field will become the next focus direction of each platform.