Text | Deep Pupil Business, Author | Chu Qingzhou
Himalaya is making its way to IPO for the fourth time.
The capital action of the audio brother is a topic that the media is keen on every time, and there are different points of view.
However, what interests me the most is a perspective that has not yet been fully interpreted by the media - as it is often said, capital is always the smartest -
From the perspective of investors, can we take a more real look at what kind of story this giant wants to tell, and whether this story can be told well?
01 China Literature and Xiaomi, betting on different considerations of the Himalayas
According to the prospectus, institutions that have previously invested in Himalaya include financial investors such as General Atlantic Investment Group, Trustbridge Capital, Goldman Sachs, Xingwang Investment, Genesis Partner Capital, Puhua Capital, and Whale Capital, as well as strategic investors such as Tencent (5.33%), China Literature (3.05%), Xiaomi (3.38%), Good Future, and Sony Music.
On further investigation, we will note that there are three Internet companies with significant influence on Himalaya's preferred shareholders, namely: Tencent, Xiaomi, and China Literature.
Considering that Tencent is the sole shareholder of China Literature, and Tencent Group has always invested a lot, this article is more interested in examining the investment of China Literature and Xiaomi.
In my opinion, the strategic considerations of China Literature and Xiaomi's investment in Himalaya are somewhat different - the former is a joint venture of content platforms based on the core copyright field, and the latter is more like a two-way rush based on the "second growth curve".
China Literature invested in Himalaya very early, 9 years ago. This is also reasonable, after all, the online text IP industry chain is a core battlefield that cannot be lost for both parties.
According to the latest data from Himalaya, in the first quarter of this year, the platform ranked first in the number of audiobooks listened to per capita, accounting for 25% of all albums.
At present, the win-win effect of this investment is still relatively obvious. The gap between the two platforms and their former competitors, especially in copyright, is growing.
After Himalaya won the battle for the top copyright, including the copyright of online articles, the strategic threat brought by litchi and dragonfly, which were once pursuers, has been alleviated.
However, there is also an interesting thing, now, China Literature and Himalaya have ushered in a common new opponent - ByteDance's tomato system (Tomato Listening, Tomato Novel).
This change is confirmed by the prospectus, which cites information from CIC Consulting, which shows that in the online audio industry, Himalaya has a market share of 25% (in terms of revenue), while companies A, B, C, and D have market shares of 13%, 8%, 8%, and 6%, respectively.
According to the note, Company A is "a private Internet group focusing on advertising profit, providing a variety of applications covering news, short videos, online music, and enterprise collaboration platforms." The company is now one of China's largest internet companies" and could easily be linked to ByteDance (companies B and C appear to be litchi and Tencent Music, respectively).
Tomato Listening, positioned as "a listening app for online literature lovers", obviously, it is accompanied by the rise of Tomato novels in the free online text model. Could it impact the Himalayas' status as the first brother of audio?
My view is that there should be two changes in the market.
First, there must be a diversion impact on the duration, needless to say, of course, from the perspective of IP competition, the tomato system is still slightly immature.
The online articles on the China Literature platform have incubated many well-known audio, film and television IP adaptations.
Tomato focuses on the free model, and the user growth is indeed rapid, but at present, there are still relatively few high-quality IPs, and the advertising revenue model is relatively simple.
Second, in any case, the rise of the tomato system may allow China Literature and Himalaya to maintain more cooperation in the future.
According to public data, as of 2023, Himalaya has cooperated with more than 220 publishing houses such as CITIC Publishing House and 150 online literature platforms such as China Literature.
It should be said that the first-mover advantage and deep binding of the model do provide it with good competitive barriers.
The extent to which the platform can consolidate and develop its existing advantages in the future still requires some efforts.
China's IP industry is still in its infancy, and Himalaya and its competitors still have a long way to go.
If China Literature's investment has made Himalaya less worried about the upstream copyright side, then Xiaomi's downstream terminal side is actually a bit of an "unexpected joy".
After all, before 2021, Lei Jun himself never imagined that he would start the "last business in his life" - making cars.
But at that time, the union of the two companies was "inevitable". Although Xiaomi only officially launched the "mobile phone + AIoT" dual-engine strategy in 2019 (now updated to "people, cars, and home full ecology"), the layout has long been underway.
For Himalaya, it is also a matter of course to occupy more smartphone markets and lay out the field of intelligent IoT, which is naturally suitable for audio.
Of course, from the current point of view, the Internet of Things, the vehicle market, and many content APPs are still a supplement to the mobile phone market, which does not need to be said.
It is estimated that in 2028, the average monthly active users of China's online audio industry will be 484 million on mobile and 218 million on IoT/in-vehicle devices, with the latter being about half of the former.
However, Xiaomi's entry into the car market will indeed bring more possibilities to the intelligent IoT market (this possibility refers not only to Xiaomi), at least it will further accelerate the mining and development of content payment and content services in the vehicle market.
It needs to be admitted that no matter what the market reputation of Xiaomi car is, its most important significance is to make the entire automobile market more "breaking the circle".
After Xiaomi's press conference, not only Xiaomi's booking data was eye-catching, but there were more customers who went to see other brands of cars, which is a good signal for the automotive market, including in-vehicle content services.
In addition, it is also worth paying attention to the possibilities brought by the large audio AI model and AIGC capabilities.
Recently, Mobvoi, the "first share of AIGC", landed on the Hong Kong Stock Exchange, which undoubtedly contributed to the audio AIGC. In 21-23, the proportion of Mobvoi's AI business revenue increased from 15.0% to 67.7%.
Its earliest AIGC product, "Magic Sound Workshop", dubbing software, has an average subscription period of 14.2 months.
According to the Himalaya prospectus, the AIGC penetration rate of the average monthly active users of the platform's mobile terminal has reached 14.8%.
The training cluster, inference cluster, audio data processing pipeline and cluster of the Everest audio AI large model currently have the largest corpus resources in the industry, which can be further developed into a highly expressive, multi-language and multi-modal audio system.
As of December 2023, the platform has 240 million minutes of AIGC content, accounting for 6.6% of its audio content, and there is still a lot of room for development.
At present, the potential of AI to create new content and reshape old copyright content is beginning to appear. According to the prospectus, the time for Himalaya AI to produce audiobooks alone can be shortened by more than 50 times compared with that of human creators.
Han Xiaobo once mentioned a case (Han is a partner of Heiyan Reading Network and the founder of Guowei Listening Book): The author Jin Yuanbao Benzun's "Picking Up the Leak" is an old copyright work of Heiyan, which has been "shelved" for a long time, but because of AIGC's attempt, it has a chance to become popular.
I specifically searched for it, and the latest views of this work in the Himalayas have reached 120 million times.
Indeed, in the field of audio, Hima has the most complete and large-scale relevant data (488.4 million audios at the end of 2023).
Now it seems that whether it is early investors such as Xiaomi and China Literature, as well as partners such as online literature platforms and publishers in recent years, AI is becoming the common intersection of its bets on the future of Hima.
In this way, this bet can form a good synergy. Of course, the extent to which these effects can be translated into future advantages ultimately depends on the effect of Himalaya's own "bet".
02 From users to creators, is Himalaya's bet successful?
To put it bluntly, the foundation of business depends on whether your bet on "two people" is successful, and whether they really invest in you with their time and energy - they are users, creators.
It's a very simple truth. The essence of business has always been so simple.
And looking at the Himalayas from this perspective, how does it perform?
First of all, users vote with their feet, which can indeed prove the stickiness and commercialization ability of the platform.
At present, Himalaya has a leading user data: its average monthly active users will be 302.6 million in 2023, and the listening time of mobile users on the platform accounts for about 60.5% of the listening time on mobile devices of all audio platforms in China.
On the other hand, the ability of users to pay has also been verified to a certain extent.
According to the prospectus, the platform has been profitable for five consecutive quarters, with revenue of more than 6.16 billion yuan in 2023 and a gross profit margin of 56.3%, which is higher than the gross profit margin of Internet audio and digital music. At present, the gross profit margin of Tencent Music is 35.3%, the gross profit margin of Litchi is 25%, and the gross profit margin of NetEase Cloud Music is 26.7%.
In the past three years, its user subscription revenue accounted for 51.1%, 50.8% and 51.7% of the total revenue, respectively, and ARPPU also increased to 13.4 yuan. The ability to pay is really improving.
However, if we specifically analyze Himalaya products, I think there are at least two aspects of user experience that need to be explored:
First, Himalaya should make new attempts to share the share of young users.
Ximalaya currently accounts for 35% of users under the age of 30, and the proportion of Generation Z is increasing, but whether it is mobile or IoT/in-vehicle devices, the platform should spend more energy to compete with emerging platforms for more and younger users.
Second, the depth of the Himalayan community can be taken one step further through live broadcasting.
Community atmosphere is a key to attracting users on a content platform. Compared with product forms such as graphics, texts and videos, audio products can naturally give full play to the advantages of high stickiness and companionship of the live broadcast function.
To give a recent example, voice actor Jiang Guangtao's recently launched "Langya Bang" warmed up, attracting more than 40,000 users to listen online.
At present, live streaming accounts for 18.4% of Himalaya's revenue, which is steadily increasing, and I think there will be more innovations in the live broadcast function in the future.
In addition to users, content platforms have a key winner: creators.
Relatively speaking, the continuous emergence of new creators and the increase in creators' income are the keys to Himalaya's stability.
Audio has a natural advantage when it comes to paying for content.
A very interesting phenomenon is: Wang Defeng, Qian Wenzhong, Zhang Qicheng, Yi Zhongtian, Fei Yong and other academic celebrities initially became popular through video platforms such as Station B / TV programs such as "Hundred Lectures", but the conversion of their content payment (membership or course purchase) finally fell on the audio platform.
The high unit price of the master class members has not stopped the user's enthusiasm for knowledge, and the master class membership products that have been online on the platform for one year have 40,000 users. Paying for knowledge gets the long-tail effect through audio.
Of course, on the other hand, the platform's unique "PUGC" model has also boosted many creators, such as the "Sound Purple Shirt" on the Forbes U30 Elite List, such as the well-known "Phantom Sakura Sky" and "Caicai" in the audio circle.
According to the prospectus, at present, there are 2.9 million active creators on the platform. 94.8% of PUGC creators who received more than 100,000 yuan from the platform in 2022 will continue to create and upload content in 2023.
On the whole, the audio platform is staggered and the head-to-head competition with short videos and graphics to creators, and creators remain sticky to the platform. This is indeed one of the more successful "bets" of the Himalayas.
epilogue
In short, the audio business is still a "slow business". In the storm of the Internet that year, this will naturally not be the most high-profile track, and the investment of China Literature and Xiaomi seems to be just an ordinary transaction in a large number of transactions.
However, today, more people are beginning to think that a slow business is not necessarily a bad business?—— of course, provided that you have a long enough slope and enough wet snow.
From an objective point of view, the audio track has slowly established strong barriers. However, within the barriers, it still takes a long-term effort to keep users and creators satisfied.
To give the most intuitive example: the cultivation of audio boutique IP is not as simple as outsiders imagine. Even the success of the selection of a certain voice actor may affect the listener's perception of the entire audio product.
I have listened to the audio dramas "Three-Body Problem" and "Crossover Actor" in its entirety, the former has been widely praised for the sci-fi sense created by the voice actors, and in the latter work, the voice actors' rivals have their own words, which has been complained by many users that they are not professional enough, and even lead to a small number of users "abandoning the drama".
To paraphrase Warren Buffett's words, the content business is not a "voting machine" for short-term traffic;
Writing this, I am reminded of two interesting stories about Warren Buffett and Steve Jobs.
Back then, Jobs tried to persuade John Scully, the president of PepsiCo, to work at Apple, and dropped a widely circulated quote: "Do you want to sell sugar water for the rest of your life, or do you want to change the world with me?"
Buffett's approach seems to be "diametrically opposed": in 1988, Buffett began to buy Coca-Cola shares, and since then, he has never sold the shares of this "sugar water" company.
Change the world, that's good, of course. It's just that today, a good business may be rare?