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Has Bilibili accomplished what it set out to do two years ago?
In August 2019, Chen Rui, Chen Rui, chairman and CEO of Bilibili, had proposed that the target of its MAU in 2021 was 220 million.
He also suggested that the way to achieve this goal is not simply to buy traffic or give users and content curators massive subsidies, but to continue to enhance the content ecology and community stickiness, and to strengthen the capacity of products and technologies as a way to achieve the growth target.
In short, what Bilibili wants is both high growth and user quality.
So, two years have passed, has Bilibili accomplished the goals it set out to achieve?
Bilibili continues growth
On August 19, Bilibili just released its Q2 2021 earnings report, in which quarterly revenue reached 4.49 billion yuan, up 72% year-on-year.
In addition to revenue, its user size also maintains high growth. From the earnings data, the number of its active users reached 237 million in the second quarter, an increase of 14 million from the previous quarter, exceeding the target set by Chen Rui two years ago.
While the number of its users grew, the user stickiness of Bilibili also remained at a fairly high level.
For Bilibili, whose target users is mainly young users, the user data in the second quarter is always low due to factors such as the start of the school year. However, in the second quarter of this year, the average daily usage time of Bilibili reached 81 minutes, the highest record in the history of the same period.
Its average daily video views also grows at a high rate, which reached 1.7 billion, up 48% year-on-year, and the average monthly community interactions, which reached 7.1 billion, up 36% year-on-year. Both of these data dimensions are at record highs.
Users of Bilibili have always maintained a high level of stickiness and loyalty. By the end of the second quarter, the number of its VIP members who passed the 100 community exams to answer questions increased by 35% year-on-year to 120 million. What's more, the twelfth month retention rate of these users is also stable at 80%. Even users who registered the site 10 years ago still have more than 50% active in Bilibili.
Judging from the data of this financial report, the maintenance of its users size and community atmosphere is basically in line with this goal of Chen Rui.
Why does Bilibili maintain a growth?
As a content community, it is not easy to maintain healthy community content while breaking the circle of growth.
It seems to be the same video content platform, but Bilibili is not the same as Kuaishou / Douyin. Kuaishou / Douyin's platform attributes are more important than the community attributes, and do not have a strong community ecology, and can quickly grow through external inflow.
As a video content community, Bilibili has to maintain the health of community attributes while maintaining high user growth. Only if the community atmosphere is always maintained at a suitable level can the traffic from outside be retained.
Zhihu, as a community platform, is facing the same problem. Zhihu's Q2 2021 financial results show that its average monthly membership payment has dropped 15.5% from 2019, and improving community content categories and richness has become a pressing issue for Zhihu. That's why, during the Q2 earnings call, Zhou Yuan, founder and CEO of Zhihu, had to propose increasing the flow of quality content and reducing the exposure of poor quality content.
This shows that user growth and community health are not easy to achieve at the same time, and the main reason why Bilibili can achieve such results is that it has done two things right in the past two years: stimulating the production of quality PUGV content and testing the market of its OGV content.
Bilibili's content is mainly composed of two parts, namely PUGV content produced by users, and OGV content created by professional organizations.
PUGV content has been an important part of Bilibili's content since its establishment. In this quarter, PUGV content accounted for 93% of the entire platform's broadcast volume, occupying the absolute majority.
The development of PUGV content is from the trend of video-based expression and official support. In 2018, Bilibili has launched various programs, including the creation incentive program, to support content creators with high-quality content. By the end of the second quarter of this year, this creation incentive program has covered over 400,000 content creators, while 70% of its own traffic is also allocated to small and medium-sized content curators, which is why the number of content curators with more than 10,000 fans on Bilibili has increased by 47% this quarter.
Another important initiative is its own content curators business cooperation platform, Huahuo. In this quarter, the number of brands enrolled in the platform grew by 2050% year-on-year, and its advertising revenue also grew by 201% year-on-year to reach 1.05 billion yuan.
This means that content curators, who are deeply bound to the platform, will also receive corresponding income from it, and their income situation has improved significantly. Bilibili is transforming into a website that can bring income to content curators, and the commercial value of content curators is being explored. For the creators, being able to bring in increased income by making videos is also an important condition for maintaining long-term content output.
In addition to PUGV content, OGV content is also becoming an important complementary part of its ecology. With the improvement of production capacity, the original works produced by Bilibili have included national creations in various fields, such as animation, drama, variety show and film drama.
Compared with other long-form video platforms, Bilibili's investment in OGV content is still in a small but fine state. And the OGV path still revolves around the three cores of IP, boutique and ecology that Bilibili's vice chairman and COO Li Ni has proposed.
The promotion of commercialization of Bilibili is also inseparable from the support of OGV content. By the end of the second quarter, the number of its VIP members has reached 17.42 million, up 66% year-on-year, another record high. Behind this, a large part is attracted by OGV content.
With OGV attracting external traffic and PUGV increasing retention, Bilibili's growth is justified.
The short-term decline does not affect the long-term development
Since the beginning of 2021, Chinese stocks have generally been in a downturn. The share price of Bilibili has also dropped 52.8% from its peak this year.
However, in terms of the broader market, the decline of Bilibili does not exceed the general trend of the entire Chinese stocks. This year, Alibaba's market value evaporated $300 billion; Tencent's market value lost 3.2 trillion Hong Kong dollars; iQiyi's share price has been a record low, the market value fell to 70%; Kuaishou is from 417 Hong Kong dollars / share shrinkage to 70 Hong Kong dollars / share.
When Bilibili was listed in Hong Kong for the second time, Chen Rui said in a media interview, "10 years later, no one will remember whether Bilibili's share price was up or down on the day of listing, but will remember that Bilibili is an excellent video site." He also said, "I have full confidence in the company, and the future development, the long-term share price should prove everything."
2020 is a special year for Bilibili. An overpriced stock is not a good thing for Bilibili. But from a long-term perspective, Bilibili is a company with long-term investment value.
People are optimistic about the future of Bilibili, and the confidence comes from the nearly 350 million users of Generation Z.
According to Chen Rui's speech on the 12th anniversary of Bilibili, the average age of new users of Bilibili is 20.2 years old, with 86% of users under 35 years old, and nearly half of the young people in China are using the site. This means that there is still a lot of room for Bilibili to make efforts in the future.
What is the core thing for Bilibili? That is to continue to maintain the growth of user and content. As long as these two figures continue to grow, it means that Bilibili is still growing, and growing healthily.
And this healthy direction is related to the high stability of the top management of the site. Since Chen Rui joined the platform as Chairman and CEO in 2014, Bilibili's management has remained stable, and there is continuity in various strategies. As Chen Rui mentioned in this earnings report, "In the past two years, Bilibili has been firmly executing its user growth strategy." It is the persistence of the top management of Bilibili in the user growth strategy that allows Bilibili to maintain a good community atmosphere while the number of users grows rapidly.
And the stability of the revenue structure of Bilibili can give confidence to this persistence.
It can be seen that in the second quarter, Bilibili's game business revenue was maintained at 1.23 billion yuan, although the growth is not large, but Bilibili's self-research game business has started to see an improvement. In this year's new game launch, Bilibili released 6 new self-research products, which will become the strategic focus of Bilibili's game business for a long time.
In other businesses, the revenue growth of Bilibili is even brighter. Its advertising business grew by 201% compared to the previous quarter, with total quarterly revenue exceeding 1 billion yuan and the reinvestment rate of brands in Bilibili reaching 75%. In the foreseeable future, with the continuous construction and improvement of Bilibili's platform, its advertising business revenue will continue to grow.
This is an article from WeChat official accounts Shenran Finance (ID:shenrancaijing).