Author 丨Han Lu
Editor 丨 Chen Xiaoping
Figure Source 丨 Figure worm
"Control the money that should not be spent, and the money that should be spent is more efficient." Station B CEO Chen Rui set the tone for 2022, that is, to reduce costs and increase efficiency.
According to the financial report released on the 3rd, in 2021, the total revenue of Station B reached 19.38 billion yuan, an increase of 62% year-on-year.
"In the past three years, Station B has achieved considerable growth, of which the size of users has more than doubled, and the scale of revenue has nearly tripled." Chen Rui concluded.
The other side of growth is the price of real money. Due to the increase in various operating costs and expenses, Station B lost 6.8 billion yuan last year, more than double the 3.1 billion yuan in 2020.
Given regulatory trends in areas such as gaming, Station B is accelerating its diversification, while investors remain concerned about its earnings prospects.
Everyone can eat just right
In the financial report figures of Station B, there are two items worth paying attention to.
The first is the rapid growth of the advertising business. Station B's advertising revenue in 2021 reached 4.5 billion, an increase of 145% year-on-year, and the total amount directly chased the game business.
From the original "game company draped in bullet screens", the profit model of Station B has also become a quasi-advertising company, and advertising has accounted for about 1/4 of the revenue.
Secondly, the average monthly active UP main and video volume is growing rapidly. In Q4, the average number of active UP owners reached 3.04 million, an increase of 58% year-on-year, and the number of video submissions reached 1088w, an increase of 83% year-on-year.
The number of old and new UP owners willing to defect and stay behind is increasing. The annual revenue sharing cost of 7.7 billion yuan can prove that the UP owners have a good life in station B.
According to the statistics of the "21CBR" reporter, in the past 4 quarters, the revenue sharing cost of station B was as high as 1.4 billion, 1.7 billion, 2.2 billion and 2.4 billion, an increase of 58%-91% year-on-year, and these expenditures were mainly reflected in the form of business order docking, revenue sharing and personal tips.
Station B has its own characteristic advertising form, that is, native advertising. Most of the videos of Station B are made by UP masters, who integrate their creativity into the video and add customized advertising.
A person in charge of an MCN agency told reporters that the content of station B is more like a Campaign, focusing on brand marketing, that is, the degree of topic, everyone cares about how many one-click triples, whether there is a second creation, and whether there is an opportunity to create phenomenon-level marketing. The marketing communication of Xiaohongshu and Douyin focuses on the integration of products and effects and traffic conversion.
In 2021, The commercial cooperation platform of Station B, Hanabi, settled more than 4,200 brands, and the re-investment rate reached 75%.
With the rapid progress of commercialization, up master can "just the right meal" has become more.
A UP master who entered the B station in 2020 told reporters that her video content is mainly knowledge sharing, compared with platforms such as Xiaohongshu and Douyin, the tone of the B station is suitable.
The UP owner said that its revenue includes contracts, commercial orders, advertising share and diversion courses. "Most of the benefits are related to station B, and some are directly brought by station B, such as the signing of commercial orders." Some are indirect, such as course diversion. ”
On a B station UP main commercial quotation obtained by the reporter, a video soft implant of a 300,000-powder automotive science popularization UP master was quoted at 143,000 yuan, and the video customization price was 298,000 yuan. A car UP master with a fan rating of one million, the video customization price is as high as 1.18 million yuan, and the value of 10,000 fans is 10,000 yuan.
The timing of profitability is suspenseful
Station B does not do patch advertising, and Chen Rui has confidence in the prospects.
At the earnings call on the evening of the 3rd, he responded to the question: Horizontally, the users of Station B are growing, and the efficiency of single-user monetization is also growing; vertically, users are breaking the circle, and more and more industry advertisers will come to them.
"It used to be a game, 3C, then it became food, it became a beverage, it became beauty and beauty, and by last year and this year, the automotive industry will become a key advertiser." According to Chen, the automobile has become the top five advertiser industries in Station B.
In December 2021, Station B will be a commercial traffic management system, advertising system, UP main business cooperation platform "Fireworks", unified packaging, the formation of a commercial middle office system "brand bank", to support the advertising business intention is obvious.
In addition to advertising, value-added services (large members, live broadcasts) and e-commerce businesses have increased by more than 80%, and the three contribute 3/4 of the revenue of B station, and their business structure has been relatively diversified.
The only short board is in the field of games, with revenue of 5.1 billion yuan in 2021, an increase of only 6% year-on-year, and the proportion of revenue decreased from 53% in 2019 to 26%.
Previously, Goldman Sachs downgraded the investment rating of Station B from buy to neutral, and the target price was sharply lowered from HK$817 to HK$334, and as of the close of trading on the 4th, the stock price was only HK$207.4.
The reason for the adjustment is the uncertainty of its profitability time, and the monitoring of online gaming and advertising verticals, concerns about its profitability and cash flow prospects.
"There will be more and more regulatory restrictions on the game business, and it will be dangerous to rely too much on it, and the growth rate of the game business of Tencent and NetEase has come down." Station B needs to expand new revenue channels, even if the profit cycle is longer. Kang Yuqing, founder of the third-party research institute Lens Company, said.
In his view, the position of B station in the circle of young users is solid, and the new challenge lies in the competitive pressure of all-age, pan-live broadcasting and short video platforms.
Content and traffic resources are fiercely contested, which may drive marketing and content costs.
Chen Rui Source: People's Vision
"Burning money is not necessarily a problem, the key is whether the traffic exchanged is sustainable?" Quan Yuqing said that the total revenue growth rate of Station B is relatively high, and at this stage, the marginal effect of traffic investment remains at a good level, focusing on whether subsequent investments such as content resources can reflect efficiency.
If it is improper, Station B will not reach the preset profit time point.
On the evening of the 3rd evening conference call, Station B CFO Fan Xin said that under the premise of reaching 400 million users in 2023, it will increase the realization rate of a single MAU, control operating expenses, and aim to achieve non GAAP breakeven in 2024.
Chen Rui has also reassured investors that the cost of competition in the industry is expected to be alleviated.
However, after the earnings report was announced, the US stocks of Station B fell by 7.89%, and the Hong Kong stocks fell by 12.86% on the 4th, and some people were losing patience.
Editor of this issue Wang Tingting Intern Huang Jingshan