Finally, on the evening of November 21, the Chengdu police officially announced: Chen Shaojie, CEO of Douyu, was officially arrested on November 16 on suspicion of opening a casino.
Previously, the founder of the live broadcast platform Douyu has been missing for more than three weeks, and as a U.S. listed company, Douyu's share price also fell 5.93% on the 21st, with a market value of only $289 million, a decrease of more than 90% from the 2021 high.
The betta rebellion is not overnight, and a number of media have revealed that the anchor represented by "Ganggang Nine Outdoor" has long been investigated and dealt with by relevant departments for suspected disguised gambling in the live broadcast room. However, some netizens revealed that these illegal anchors were selected as the top ten peak anchors of Douyu many times around 2021, and they were also praised by the host at the Douyu Festival at that time as "simple and unremitting".
According to public information, Chen Shaojie's last public appearance this year was at Douyu's second-quarter earnings call, Chen Shaojie said that Douyu has improved the relevant rules and procedures of the platform, with the goal of achieving long-term development and will actively cooperate with regulatory work in the future. The background of his remarks is that in May, the Hubei Provincial Cyberspace Administration had sent a working group to the Douyu platform to carry out a one-month centralized rectification and supervision.
How did Chen Shaojie, who started his business at a young age, go from being an Internet addict to becoming the boss of China's largest live broadcast platform? If Douyu falls, how will it change the pattern of China's Internet?
If you don't fight, you can't fight, you have to fight with your peers
Adventurous, likes to lick blood from the knife edge, and those who are familiar with Chen Shaojie know that he has a famous mantra: "If others dare not do it, I will do it." Former employees of Douyu also said that Chen Shaojie often said at staff meetings that it is not okay for people not to take risks in the mall, and it is not okay to fight with their peers.
Chen Shaojie's entrepreneurial experience is quite legendary, Chen Shaojie was born in Jinan, Shandong Province in 1984. Since the 5th grade of primary school, Chen Shaojie has been obsessed with games, often playing games all night, and after barely getting into an average university in the college entrance examination, Chen Shaojie suddenly made an astonishing decision to drop out of school and go alone.
In the Spring Festival of 2006, Chen Shaojie, who had no education and no experience, but had been playing games for ten years, found a job in Wuhan to develop a game battle platform. At work, Chen Shaojie and Zhang Wenming, the other founder of Douyu in the future, jointly developed a game called "Boss", which was soon acquired by Shanda Network, a predator in the gaming industry at the time, and the two became the managers of Shanda's Hangzhou winger Wuhan branch overnight.
Screenshot of station A
However, the adventurous Chen Shaojie is obviously not willing to be the manager of a game branch. In 2010, Chen Shaojie took a fancy to the second-dimensional A station, which was not famous at that time, and persuaded the winger to buy it for 4 million yuan. As a game fan, Chen Shaojie began to carry private goods in the design of station A, and opened a game live broadcast platform called "Shengfang" channel on station A, which is the predecessor of Douyu.
In 2014, seeing the outlet, the game live broadcast industry, Chen Shaojie officially operated the "Shengbo" channel independently from Station A and renamed it "Douyu TV". The name Betta comes from a Thai fish known for being aggressive, and the brand's name seems to imply Chen's aggressive personality.
In that golden age of online games, the emergence of Betta quickly attracted the interest of the capital. Less than a year after its establishment, Aofei Animation directly invested 20 million yuan in Douyu. Later, according to Zhang Wenming's recollection, this first financing was actually spent by Chen Shaojie in less than a month. In order to start the brand, 20 million financing was used to sign a group of game professionals at that time, and it turned out that this time Chen Shaojie bet right, and soon Douyu received 20 million US dollars from Sequoia Capital A round of financing, which not only made Douyu the head enterprise of the domestic game live broadcast industry, but also gave the capital of Huya, another head game live broadcast company.
Fight your way out of the encirclement, but you can't swim when you go public
2016 is a year of great significance for China's game live streaming industry. A year ago, Wang Sicong's Panda TV joined the game live broadcast in a high-profile manner, and many capitals began to pay attention to the game live broadcast track, forming a thousand-broadcast war for a while. According to statistics, the betta fish at that time ranked first in the market, followed by Huya and Panda. As a result, the three-legged situation of China's game live broadcast industry has also been formed.
But just one year later, the capital calmed down, a large number of funds began to leave the market one after another, and the high operating costs, bandwidth costs and contract costs of the game live broadcast industry soon made many companies unable to resist. The author consulted an industry insider at the time, and he said that the bandwidth cost alone, the monthly expenditure of some small and medium-sized game live broadcast platforms is as high as tens of millions, which is not at all affordable for ordinary enterprises. Soon, the national husband Wang Sicong's panda live broadcast began to be unable to withstand the pressure of making profits, first suspected of live gambling, and after blood transfusion without funds, in March 2019, Panda Live was officially closed and taken off the shelves.
In contrast, Douyu has had a much better time, having received six rounds of financing before going public in 2019, the largest of which occurred in March 2018, with Tencent Industry Win-Win Fund investing US$630 million.
After listing, Douyu became the first overseas listed Internet company in Hubei Province, and Chen Shaojie also entered the Hurun Report with personal assets of 2.5 billion yuan. In 2020, Chen Shaojie ranked 34th on the "2020 Hurun Post-80s Self-Made Rich List" with a wealth of 5.5 billion yuan.
However, the listing is not a highlight moment for Douyu and Chen Shaojie. The prospectus shows that the pre-IPO betta has actually been in a state of loss for several consecutive years. As a traditional game live broadcast platform, Douyu's business model is too simple, user loss, external competition and other problems have begun to emerge one after another.
The first is the successive exodus of the top anchors. In 2019, after the contract of Douyu's first sister Feng Timo expired, she switched to signing with Station B. In August 2020, the head anchor of Douyu's "Dungeons and Warriors" section "Xu Xu Baby", who was taken by Chen Shaojie to ring the bell, transferred to the Douyin platform. As the core resource of the game platform, the inevitable loss of users is the head anchor.
Some industry insiders pointed out that the early game live broadcast platform started with the support of head anchors and IPs, and eventually did not go far. Because there is no moat in such a model, once the anchor has traffic, he will definitely follow whoever has more money.
Chen Shaojie, who went public, said: "Listing is the highlight moment of Betta, but it is not the peak moment of Betta. But as the company's performance continued to decline, the former brothers also began to part ways, and on February 7, 2021, Zhang Wenming announced that he had voluntarily resigned as director and co-CEO for personal reasons, and the founding team of Douyu also began to split.
According to the data of the second quarter of 2023, the average monthly active users of Douyu were 50.3 million, down 5.4 million year-on-year, the average number of paying users was 4 million, down 2.6 million year-on-year, and the revenue of the most core live broadcast services was 1.2583 billion yuan, down 28.8% year-on-year.
The loneliness of betta fish actually stems from the rise of short videos. The strengthening of the weight of game content on platforms such as Bilibili, Kuaishou, and Douyin has further compressed the live broadcast platform perpendicular to game content, coupled with the better performance of the old rival Huya in the capital market. The former industry leader Betta began to struggle.
Tencent and Wuhan are the most hurt?
After December 2021, Douyu has entered the era when Chen Shaojie is in power. Compared with the high-profile of other Internet bigwigs, Chen Shaojie rarely appears in the media most of the time and rarely accepts interviews, but with the further decline in Douyu's performance and various controversies related to drugs, Chen Shaojie's final outcome can only be to pay for everything that happened to Douyu.
Many people began to speculate about the next move of Douyu without Chen Shaojie, but compared to Douyu, Tencent's situation will also fall into an embarrassing situation.
It is worth mentioning that Tencent, which controls both Huya and Douyu, planned the merger of the two companies in 2020. It is said that both parties had signed a "merger agreement and plan" at that time. However, the merger failed in 2021 due to the intervention of the State Administration for Market Regulation, which the authorities believed would obviously create a certain industry monopoly and have or may have the effect of eliminating or restricting competition in China's domestic game live streaming market and online game operation service market.
After the failure of integrating the two platforms, game live streaming became a business that burned money and didn't make much money. In the face of the harvest of video websites such as Kuaishou and Bilibili in the field of game live broadcasting. Tencent is clearly unable to create a decent product of its kind.
What's even more worrying is that the game live streaming track is also starting to get more and more rolled. In 2022, the number of game users in China will be 664 million, a year-on-year decrease of 0.33%, and the number of users will decline for the first time in 10 years. Under the premise of the lack of the company's top leader, it is worth paying attention to how Douyu continues to develop in Tencent's entertainment sector.
In addition, some netizens pointed out that Douyu is the only Internet company in Wuhan that can get its hands on it, and it is one of the few Internet unicorns in Wuhan that can get its hands on it in recent years, and if there is a problem with Douyu's operation, it may have a certain impact on the entire Wuhan Internet industry chain.
Perhaps, Douyu was acquired and merged by a live broadcast or short video platform, which is the best ending.
Resources
1. The CEO was arrested on suspicion of opening a casino, and the betta fish became a "salted fish", China Entrepreneur Magazine
2. Douyu announced that CEO Chen Shaojie was arrested, and the media exposed that it may be related to gambling, Chen Shaojie was worth nearly 10 billion yuan, China Economic Weekly
3. CEO Chen Shaojie was arrested for gambling, leaving Douyu with chicken feathers, financial network