What is the secret of the rapid growth of Bilibili?

Nov 24, 2021 Social Network

Beijing time on November 17, Bilibili released Q3 financial report. The financial report showed that Bilibili hit a new record in several data in the third quarter. Among them, revenue reached 5.21 billion yuan, up 61% year-over-year, far exceeding market expectations. Monthly active users, as well as paid users, achieved rapid growth, with the average monthly paid users reaching 24 million, up 59% year-over-year, and the paid rate also increased to 8.9% from 6.2% in the same period last year.

It is foreseeable that with the trend of continuous user growth and the unique content ecology advantage, Bilibili will continue to release its long-term value.

 

New records in Q3

From the perspective of business composition, diversified and balanced development has been the long-term direction of Bilibili.

In the third quarter, the advertising business continued its previous strong performance. In the face of macroeconomic challenges, advertising revenue reached 1.17 billion yuan, up 110.2% year-over-year and 11.7% sequentially, making it the sub-business with the fastest year-over-year revenue growth for Bilibili.

The strong growth of this part of the business stems from the efficiency of advertising and the opening of multiple scenes of advertising. According to the earnings call, Bilibili advertising has achieved full-scene coverage from mobile APP, iPad, TV big screen, and PC. Creative content produced by uploaders, combined with brand merchant products full-chain marketing, has become a new marketing direction in the Internet market. The brands' advertising repurchase rate in Bilibili exceeded 75%, which is a more obvious change of Bilibili's advertising business in Q3.

It is worth mentioning that the value-added service business contributed the most revenue to Bilibili in the period, amounting to 1.91 billion yuan, a 95% year-over-year improvement. Among them, the VIP members and live streaming business were the main drivers.

This quarter, the game business, which was once the mainstay of Bilibili's revenue, has dropped to 26.7% of total revenue in the reporting period. But this does not mean that the game business was taken offline. Data shows that Bilibili's game business revenue reached 1.39 billion yuan in the third quarter, up 9% year-over-year, far exceeding the performance in the first and second quarters.

Overall, the Q3 performance of Bilibili is bright, especially the operation data, which is a historical record. So, what exactly did Bilibili do right to achieve continuous growth in users and revenue?

 

The community's ecological value continues to boom

This quarter, the average daily usage time of Bilibili users increased to 88 minutes, and the average daily video playback reached 2.3 billion times, an increase of 77% year on year.

First, in terms of content, the community ecology driven by PUGV content makes quality uploaders an indispensable resource for the platform. To incentivize high-quality uploaders to create high-quality content, Bilibili has launched a creation incentive program, a commercial cooperation platform, a copyright protection program, and so on. These programs or platform cooperation, on the one hand, encourage the continuous creation of uploaders, and on the other hand, help uploaders to commercialize quality content.

Also based on this series of support and growth plans, uploaders from different fields gathered at Bilibili and attracted users to stay at Bilibili through a constant stream of creative content. By the end of the third quarter, the average monthly number of active uploaders on Bilibili reached 2.7 million, up 61% year-over-year, and the average monthly video submissions exceeded 10 million, up 80% year-over-year.

Interestingly, the purpose of watching videos is changing. A report released by iResearch Consulting Group shows that after the 2020 epidemic, the average increase in serious-oriented content such as science documentary and news facts is as high as 16.7%, and the average increase in various types of lifestyle-oriented content is also 21.0%, while entertainment-oriented content has seen a 3.2% decline. This means that today's Internet users need quality "spiritual food" more than entertainment content.

Compared to the uploaders on other platforms, the uploaders of Bilibili are more knowledge-oriented. These uploaders are not only able to launch high-quality serious content, but also able to bring both knowledge and fun. This strengthens the content features and value of Bilibili, making the "learning platform" more worthy of its name.

Secondly, the increase in the average daily usage time of users also lies in the breakthrough of Bilibili in multiple video viewing scenarios. In the era of "multi-screen", Bilibili started to build a full-scene, full-category video community. As the platform with the most 4K videos in China, the TV terminal has become a new user growth point for Bilibili. From the "personal" and "small screen" use scenario to the "multiplayer", "family" and "large screen" use scenario. The "big screen" use scene is a right breakthrough in the era of the intelligent Internet.

While the average daily usage time of users has increased, the community activity of Bilibili is also increasing. Data shows that the average monthly number of interactions on Bilibili reached 10.2 billion in the third quarter, up to 86% year-over-year.

In addition to frequent user interaction and high quality, youthfulness is also a major feature of Bilibili users. Most critically, this group of young users is on the rise in terms of payment awareness, payment habits, and even payment ability. They express and interpret pop culture on Bilibili, further increasing the connection between communities of interest.

At present, Bilibili has completed the long-tail effect of consumer upgrade relying on the mobile Internet era, and its commercial value as a highly differentiated content community platform will be further released.

However, the giants are facing new challenges and opportunities now. The same is true for Bilibili. Standing in the present, what new stories can be told about the future of Bilibili?

 

Will Bilibili achieve the MAU target in advance?

In general, Bilibili performed strongly in many core user indicators in the third quarter and reached its annual user growth target one quarter ahead of schedule.

This also means that the distance to reach 400 million MAUs by 2023, as promised by Bilibili in its 2020 earnings analyst meeting, is getting closer.

First of all, there is a lot of room for user penetration in different terminals of Bilibili. Bilibili management said in the earnings call that the overlap rate between TV users and APP users is less than 20%, and these users are distributed in third and fourth-tier cities, and such differentiated active users are the focus of Bilibili's efforts in user growth thereafter.

Secondly, the self-looping content ecology of Bilibili is also the confidence of its growth. In the interest-based online community, Bilibili gives incentives to creators through various initiatives, driving a large number of uploaders into content production, while quality content attracts more users to join in content creation.

This continuous fission cycle not only enriches the content community ecology of Bilibili but also fits the current hot concept of "metaverse" to a certain extent.

In the view of Chen Rui, the CEO of Bilibili, the concept of the metaverse product system, there must be a large group of people to create content in-depth, and they can profit from the content created in this system, which coincides with the self-loop content creation ecology of Bilibili.

According to Chen Rui, the concept of metaverse requires a very large number of content creators to continuously create content, forming a self-loop for content creation.

Bilibili already has an excellent creative ecology, and around this ecology, it has formed a large community of 267 million monthly users, and most of these 267 million people are the most creative and energetic young people in China, and they tend to express and interpret their minds.

Whether it's games, live streaming, or virtual idols, as the integration with the Bilibili ecology further increases, the chemistry generated will become more and more subtle, resulting in some interesting phenomena.

In such a self-loop content ecology, Bilibili only needs to build up the framework and maintain good basic order, and it will be able to form good interaction with the users in the platforms.

With the premise of producing more quality content, the MAU target of Bilibili in the next three years may be achieved in advance with the dual support of multi-screen scene application and virtual technology innovation.

This is an article from WeChat official accounts MeiGuyanjiushe (ID: meigushe).