Text/Liu Zhentao
In the past Spring Festival Gala of the Year of the Snake, Bilibili (hereinafter referred to as "Station B") was broadcast live simultaneously and became the exclusive barrage video platform for CCTV's Spring Festival Gala cooperation in the Year of the Snake. "Watching the Spring Festival Gala with 300 million young people" is the loud slogan of Station B, and on the way to break the circle, Station B once again rode the wind.
"Breaking the circle", Baidu Encyclopedia's explanation is: Internet buzzwords, referring to a person or his work breaking through a small circle and being accepted and recognized by more people.
The breakthrough of Bilibili is from a maverick two-dimensional small platform, which has gradually evolved into a community platform that expands the capacity of more young people, and has been fully mainstreamed in terms of user age structure, content ecology, and brand positioning; Starting from the game business, it has gradually evolved into the "three carriages" of games, advertising, and value-added services. It is a "small broken station" that lost money in the past to a positive mainstream content platform that can make a profit today.
Winning the live broadcast right of the Spring Festival Gala is a good opportunity for Station B, which has just achieved profitability, to tap new value, and it is also a good start for Station B to break the circle in 2025.
From two-dimensional to multicultural, from niche independent speciality to mass mainstream, from losing money to being able to make a profit in a single quarter...... in the face of various challenges, Station B continues to ride the wind and break the circle, or it will eventually be able to set off huge waves.
Niche two-dimensional, towards the mainstream platform of youth
Bilibili was not established as a company at first, but a personal preference website. In 2009, Xu Yi founded Mikufans (the predecessor of Station B), which is mainly used as an auxiliary for the earliest two-dimensional cultural website "Station A" in China and backs up the resources of Station A.
In 2010, the management of station A had many turmoil, and the operation was declining more and more, Xu Yi, who loved the two-dimensional culture, began to devote himself to the work of taking care of station B, and soon the development of station B surpassed station A. This year, Xu Yi also renamed Mikufans "BiliBili" (Bilibili), which was taken from the two-dimensional anime "A Scientific Super Electromagnetic Cannon".
Station B didn't have any business plan at the beginning, it was purely a love for two-dimensional culture, and this purity also attracted the attention of Internet boss Chen Rui, and with the later corporatization of Station B and the continuous breaking of the circle.
Chen Rui, chairman and CEO of Bilibili, was the general manager of Jinshan Drug Tyrant Division before joining Bilibili, and after leaving Jinshan, he also founded the "Beike Security" cloud security service. Chen Rui also has a hobby, he likes two-dimensional culture, whenever the tiring work is over, he likes to go to station B alone to watch the content to relax.
The content of station B attracted Chen Rui, making him very worried that this personal website would disappear in the future, so Chen Rui, who also loves two-dimensional culture, found Xu Yi to communicate and became the earliest angel investor of station B.
In 2014, after Chen Rui pushed Cheetah Mobile to the market as a co-founder, he chose to leave, and joined Bilibili to become the chairman of the company with his love for ACG.
Since Chen Rui officially joined Station B, Station B has begun to transform from the initial personal preference website to a corporatization, and has officially opened the road to breaking the circle.
After Chen Rui arrived, he worked together with Xu Yi and others, and they formulated a management mechanism, attracted investment, found technology, and did research and development, etc., and Station B began to develop rapidly.
According to media reports, from 2013 to 2015, Bilibili successively introduced IDG Capital, Qiming Venture Capital, Tencent, Chinese Culture and other capital, and invested in nearly 30 companies such as games and animation around its own business lines. In 2015, Bilibili has formed an online video platform covering video, live broadcast and games and other businesses, and Bilibili has formed what an Internet company should be.
As an Internet content platform, the most important thing is not only the content, but also the user. Station B is aiming at "Generation Z".
In 2018, Station B went public in the United States, and in the prospectus of Station B, "Generation Z" was used to refer to its user group, referring to China's "post-90s" and "post-00s" generation, and about 81.7% of Station B users were born between 1990 and 2009. At that time, it was mentioned in the prospectus of station B that at the beginning of 2018, the monthly active users of station B reached 76.4 million, and the average daily usage time reached 76.3 minutes, which is a proper growth of "Generation Z".
Since then, Bilibili has determined the future development direction, that is, to meet the various needs of young people on the road of cultural lifestyle. It is also the determination of the user group that has made the content of station B begin to break the circle, no longer limited to entertainment and pastime, but also learning, knowledge, talking about work skills and other aspects.
Station B really went from niche to mass and mainstream, which happened in 2020.
On the May Fourth Youth Day in 2020, CCTV broadcast the manifesto film "Hou Lang" dedicated to the new generation of youth at Station B, and actor He Bing sent a message to young people in the video, "You are fortunate to meet such an era, but the times are more fortunate to meet such you." "Hou Lang" has become one of the top ten buzzwords in 2020.
The broadcast of "Hou Lang" not only allowed Station B to lock in young people more deeply, but also conveyed to the society the image of Station B platform that makes young people work harder and grow more.
Now, Station B has won the synchronous live broadcast of the Spring Festival Gala in the Year of the Snake, and is moving forward again on the road of mainstreaming. Since 1983, the Spring Festival Gala has accompanied the Chinese people for more than 40 years, whether it is urban and rural, or overseas, the Spring Festival Gala has become a must-eat Chinese New Year's Eve meal.
Cooperation with the Spring Festival Gala is an important step for Station B to break through the circle of mainstream culture, an important step to enhance the brand image and recognition in the hearts of the public, and it is an important step for Station B to start from the second dimension, no longer limited to the two-dimensional niche, to the display of mainstream culture carried by the public, to show the growth potential of Station B, and also to show more possibilities for cultural communication.
B needs a bigger stage to achieve traffic and user growth, to tell the story of constantly breaking through the circle.
Breaking the circle: Commercializing multi-legged walking
For an Internet company, only by finding a mature business model can it continue to operate for a long time and serve more users.
"Small broken station that doesn't make money" is a place where station B has been complained about by the market since its establishment 10 years ago, and every time station B breaks the circle, whether it is an extension to the user group or a diversified breakthrough in content, it is actually exploring a mature business model and exploring its own way to make a profit.
This road has finally been passed.
In the third quarter of 2024, Station B achieved operating income of 7.31 billion yuan, a year-on-year increase of 26%, adjusted operating profit of 270 million yuan, and adjusted net profit of 236 million yuan. Bilibili achieved a single-quarter profit.
In the earnings call, Chairman and CEO Chen Rui said, "This is a milestone for Station B, but it is more of a natural result, the work of the past two years has only made the day of profitability arrive earlier." ”
Looking back at the profit of Bilibili in a single quarter, the game business has made a huge contribution. Combing the financial report, in the first three quarters of 2024, the game revenue of station B was 982.8 million yuan, 1.007 billion yuan and 1.82 billion yuan respectively, and in the third quarter, the game business increased by 84% year-on-year, with a rapid growth rate.
However, behind the single-quarter profit of station B, it is more about the reconstruction of the value of traffic, the exploration of breaking the circle in the business model, learning to walk on multiple legs, and learning to break the circle within the business.
In 2018, when Bilibili went public in the United States, Bilibili tied itself to the game, precisely because of the large amount of revenue brought by the game business, which boosted the success of Bilibili's listing. According to the prospectus of station B, from 2015 to 2017, station B's game revenue soared from 86 million yuan to more than 2 billion yuan. Bilibili is also known as "a game company dressed in a content community".
However, it is also from the beginning of the listing that Station B has opened a diversified model. There are three main businesses for the diversified exploration of station B: games, advertising, and value-added services, which are also the "troika" of station B's current progress.
In terms of game business, in the past, Station B relied on the two-dimensional culture to start, so most of the game investment was biased towards two-dimensional products. However, with the gradual increase in the popularity of Bilibili, Bilibili decided to break the circle and began to invest heavily in different styles of games. Finally, the emergence of the strategy game "Three Kingdoms: Conquering the World" proves the success of Bilibili in breaking the circle in the game business.
Bilibili's financial report for the second quarter of 2024 shows that "Three Kingdoms: Plotting the World" is the fastest game in the history of Bilibili to reach one billion turnover. It is also with the success of the game that the single-quarter profit of Station B in the third quarter was promoted.
The game business is very important for Bilibili, but the circle-breaking growth of advertising business and value-added business cannot be ignored.
The advertising business has stable revenue and high gross profit margin, which is the most important business for investors who invest in Internet content companies. The advertising business of station B started relatively late, but it has developed rapidly.
Combing the relevant financial reports of station B, in 2015, the advertising business revenue of station B was less than 20 million, in 2022, the advertising revenue of station B has reached 5.07 billion yuan, and in the first three quarters of 2024, the advertising revenue will reach 5.8 billion yuan, accounting for about 30% of the revenue.
Behind the growth of the advertising business revenue of station B is the significant progress made in the exploration of breaking the circle. In terms of diversified scenarios, such as information flow, search bar, PC and Pad port, etc., Bilibili has begun to explore the advertising business.
At the same time, Bilibili has increased its support for effect advertising. At the third quarter of 2024 earnings call, COO Li Ni said that Bilibili opened up "fireworks + take-off" and optimized the intelligent delivery settings of the mobile terminal, which made the number of customers increase by 7 times year-on-year.
Another carriage of station B is value-added services, which are no longer limited to large members, but also more diversified services, including live broadcasts, Bilibili comics, audio dramas, Bilibili paid classes, charging services, etc.
When it was listed in 2018, the revenue of station B's value-added services was 590 million yuan, and by 2023, the revenue of value-added services has reached 9.91 billion yuan, and in the first three quarters of 2024, the revenue of value-added services of station B will reach 7.92 billion yuan, accounting for 41% of the revenue.
The continuous exploration of the business model and the continuous breakthrough of the company's business have gradually stabilized the troika of games, advertising and value-added services at Station B.
In the past, it was said that the end of the Internet factory was to take out loans to build cars, but now it should add one - e-commerce. In addition to the three major businesses, Station B is also actively exploring e-commerce business.
In 2017, Station B launched "Member Purchase", mainly focusing on two-dimensional users, mainly selling two-dimensional products such as animation peripherals, figures, and comics; At the end of 2021, Station B officially began to test live broadcast e-commerce, and a small number of UP owners participated in the internal test of the live broadcast delivery function; In August 2022, Station B will launch the "Selection Plaza", and officially launch the shopping area in September, and announce that it will join the "Double 11" war that year.
However, compared with the other three major businesses, the e-commerce business of station B does not have the core ability to be independent, and the e-commerce business is also classified as the derivatives business of station B. However, Bilibili did not give up e-commerce, and launched the "Bilibili Store" to help the growth of e-commerce business.
Games, advertising, value-added services, e-commerce, etc., B stands on the road to commercialization and continues to break the circle, becoming a platform that relies on multiple legs, proving the success of the business model. After making a profit in a single quarter, it won the right to broadcast the Spring Festival Gala synchronously, and in the future, how Station B will focus on its own advantages, find a way to make long-term sustainable profits, and how to continue to ride the wind and break through the circle, and the scale business will maintain its attention.