I. the dilemma of content companies

You can't have both a fish and a bear's paw, just as there is always a mismatch between being forced and being commercialized.

In the end, you will find that there is only one way.

On August 12, Zhihu Inc. announced the completion of round F financing, totaling US $434 million. This is Zhihu Inc. 's largest round of financing so far, and it is also one of the largest financing in the field of Chinese Internet culture and entertainment in the past two years.

Since then, Zhihu Inc. elites not only crossed the furthest distance on the Internet, smoothly held hands with Kuaishou Technology brothers, but also reunited with Baidu, Inc., the worst man who was hacked on Zhihu Inc..

Anxiety about profit and traffic growth has triumphed over everything, and it is difficult to survive in this flow-only world.

NetEyun music community and culture are all good, but we still have to replenish the granary to BABA when selling koalas cheaply. Douban and Bilibili Inc. have a good reputation, but there is great pressure on profitability. at present, Bilibili Inc. 's biggest source of income depends on games.

This ambivalence always surrounds to be or not to be,that's a question.

The rise and fall of Tianya, Cat Pop and everyone is right in front of us.

Among them, Maopu is the most regrettable, and it has become a junk advertising station and an undead zombie that eats the old capital and sells traffic. From the point of view of the number of visitors, Maopu and Renren can be said to have been completely reduced to second-rate and third-rate. Tianya is much better, but the profitability is worrying. After the failure of the motherboard listing plan, Tianya "turned to the new third board". After listing, Tianya was put on the hat of "ST" because of years of losses. According to public data, Tianya's operating income in 2016 was 131.1213 million yuan, down-24.25 percent from the same period last year. The net profit attributed to shareholders of the listed company was-10.8847 million yuan, a loss reduction of 45.32 percent compared with the same period last year of-19.907 million yuan.

Second, the content industry, can not avoid the "Touteng war"

There are a lot of things in this world that you can't help, and sometimes even if you want to keep it tight and clean, the power of markets and capital won't allow it.

Today, there are two giants in the content industry, Tencent and Jinri Toutiao. Tencent has a very wide investment layout, but the headlines are even more ambitious, constantly opening up the frontier and expanding the territory, and now he wants to start searching again.

The sudden rise of headlines has changed China's top four online advertising companies from BAT to BATT. In 2018, the total revenue of the four companies accounted for about 68% of the industry, of which Toutiao accounted for 9%, temporarily lagging behind Tencent's 12%.

However, according to Citic Construction Investment, in 2019, with the continuous increase in DAU and average daily usage time of Toutiao, the advertising revenue of byte jump is expected to reach 89.4 billion yuan in 2019, surpassing Baidu, Inc. and Tencent. Compared with byte jump, advertising revenue in 2018 is 47 billion yuan, an increase of 90%.

In the face of the headlines' enterprising, Tencent certainly cannot give way easily. In 2019, with the launch of the third ad on moments on Wechat (the first attempt to load a third ad on some users' moments in May) and the upgrading of advertising capabilities on public platforms, several new ad spots were launched, as well as an increase in the concentration of information stream ads such as QQ viewpoints.

Another way to curb headline short videos from wanton grabbing market share is to increase their support for its competitor, Kuaishou Technology.

Although as early as last April, Toutiao short video products could not be shared on Wechat moments, when users shared, Wechat would display "during the Internet short video renovation, the platform will suspend direct playback". But the ecology of Toutiao is still formed, and now it has become a leader in the field of short videos.

Although Tencent developed Weishi, the number of daily active users of less than 10 million is a far cry from Douyin's 320 million, and Douyin still holds the top spot in short videos.

The battle continues.

Wechat unblocked Kuaishou Technology and Kuaishou Technology links can be shared to Wechat moments on June 24. When Kuaishou Technology users click the share button, they will automatically become the style of moments, and then they can share.

On July 30th, there was a rumor that Tencent would buy Kuaishou Technology wholly, which was later clarified as a rumor by Kuaishou Technology.

It is reported that investment negotiations between Tencent and Kuaishou Technology are under way, and the most likely option under discussion within Tencent is the establishment of a joint venture between Tencent and Kuaishou Technology. If the plan is passed, Tencent and Kuaishou Technology will exchange resources in the direction that Kuaishou Technology may get an entrance such as a look in Wechat or shooting tools, and will also export product capacity to the new company. In fact, both Tencent and Kuaishou Technology have a lot of places to exchange resources, and the two sides work together more like targeting a common rival-byte Jump Group and its business lines in the areas of information flow, short videos, live games, e-commerce and so on.

On September 12, several media reported that Kuaishou Technology plans to go to IPO in the United States in the first half of 2020 after receiving Tencent's capital increase. The latest round of PE financing will be valued at no less than US $25 billion, with Tencent holding 30% of the company. 40%.

This year, short video is very important for both Kuaishou Technology and Tencent.

3. Kuaishou Technology rejects Buddhism

If it is not deliberately mentioned, I believe few people remember that Kuaishou Technology's predecessor was Gif Kuaishou Technology, which was founded in 2011.

After Kuaishou Technology spent eight years in Buddhism, on June 18 this year, the founder of Kuaishou Technology sent an internal letter to reflect: reject Buddhism and open the door to the future.

The internal letter said that the loose organization and Buddhist attitude made it difficult for them to eat and sleep, and Kuaishou Technology's management conducted a profound introspection and reflection on this.

They said in their internal letter that Kuaishou Technology will change the organization, optimize the structure, iterate over the products, and clearly put forward the first goal of the battle: 300 million DAU before the Spring Festival in 2020, which means that the growth target of 100 million daily active users will be achieved in half a year.

The pressure comes from Douyin.

In mid-2018, Douyin surpassed Kuaishou Technology in the number of daily active users for the first time. Kuaishou Technology only confirmed in May this year that the number of daily active users reached 200m, while in July, Douyin announced that the number of daily active users exceeded 320 million.

Under the short video stock pattern, the traffic harvesting of Douyin and Kuaishou Technology is close to saturation, so it is impossible for both sides to grow together and must enter each other's territory.

While Kuaishou Technology aims to target 300 million daily active users, byte Jump founder Zhang Yiming also said: if there are no more high-quality content products, the number of daily active users of Toutiao application in China may only have 40 million room for growth. Therefore, Douyin is also trying to expand the user base, through operational means, tilt traffic to travel, makeup, clothing, cars, funny and other areas.

Where's Kuaishou Technology?

A clear growth plan has been worked out-the "K3 campaign", including Kuaishou Technology, Kuaiying, AcFun, commercialization, MCN and other business lines have clear goals. Among them, A station and game video (including live broadcast) become the "trump card" of young users.

In order to grow, "Tuwei Uncle" opened up wasteland "two dimensions", carried on the comprehensive support to the A war, and tried to get more young users and complete KPI. In the field of live games, Kuaishou Technology's growth is amazing. Live game data released by Kuaishou Technology in July show that his mobile daily active users are 35 million, even more than DouYu International Holdings Limited and HUYA Inc. combined.

It seems that Kuaishou Technology is just around the corner to complete the target of 300 million DAU.

The Stars and Sea of Bilibili Inc.

Compared with "rustic" Kuaishou Technology, young people in first-and second-tier cities are more familiar with Bilibili Inc., but perhaps less people know that this year is the tenth year of its establishment. Now Bilibili Inc. has stepped out of the circle of "two dimensions" and started a vigorous "road out of the circle".

In fact, from the navigation bar on Bilibili Inc. 's home page, we can see that there are more and more music, technology, entertainment, film and television, and so on. More and more people go to Bilibili Inc. not to catch up, but to watch all kinds of videos and vlog, or even to learn. In short, Bilibili Inc. 's content is already all-inclusive, the key is that the content is still very attractive, especially for young users.

What is Bilibili Inc. 's core competitiveness?

Community culture. When a group of users with the same sense of belonging come to Bilibili Inc. and are used to sending barrage and complaints at Station B, they can't go back to anywhere else. Rely on the expansion of video types, more UP main resident, bring more diverse users, as long as it does not affect the community atmosphere, Bilibili Inc. 's road out of the circle can go smoothly.

Compared with other long video sites, Bilibili Inc. has been developing slowly for a decade, and this year has reached a critical point in time.

The number of daily active users of long video sites is increasing.

Chen Rui, co-founder of Bilibili Inc., said in an interview with "later" some time ago:

There are only two kinds of products on the Internet, the excellent and the dead. Bilibili Inc. 's industry is so cruel that in the long run, content platforms with a volume of less than 10 billion US dollars will be eliminated in China. 10 billion US dollars means that the company's revenue will be at least 10 billion yuan a year. What I am talking about is not a "goal", but that I will die if I cannot cross this line.

The driving force for Bilibili Inc. 's growth basically comes from, I hope Bilibili Inc. will live well. Small countries and few people are happy, but if you are a paradise, you will be killed by strong ships and guns. Many people will think that you have a very small experience is very good, whether or not to never grow up, this idea is very childish. What happens to Cat Pop.

This year, Bilibili Inc. will be turned into a high-growth Internet company.

Finally, Bilibili Inc. realized the challenges and opportunities he had encountered.

Founder Securities data show that for a long time, some people joked that Bilibili Inc. is actually a game company, because Bilibili Inc. 's revenue pillar is games, but even if he relies on game blood transfusion, he still has a loss of 200 million to 300 million per quarter.

If it goes on like this, the investors will definitely not agree. Fortunately, when the growth of daily active users of the "Aiyou Teng" video site began to stagnate from 2018Q3, Bilibili Inc. 19Q2 maintained a 41% increase in daily active users compared with the same period last year, and the number of monthly active users increased by 30%.

The growth rate of paying users has been more than 100%.

In addition, 19Q2 financial report data show that the annual retention rate of station B continues to remain above 80%, the average daily video viewing volume reaches 586 million, an increase of 84% over the same period last year, and the average monthly interaction reaches 1.8 billion, an increase of 180% over the same period last year. The per capita daily use time is 78 minutes. The high quality community atmosphere and high fan viscosity enhance users' willingness to pay, and the company payment penetration rate continues to rise, with Q2 reaching 5.7% and 2.2% higher than the same period last year. The number of active content creators per Q2 month reached 850000 (YoY+144%), with 2.407 million videos uploaded (YoY+107%).

Out of confidence in user growth, the company raised its full-year MAU target for 19 years from 1.1-120 million to 1.2-130 million, with a target of more than 220 million MAU in 2021.

As long as the user is on your side, you will be invincible. This is Bilibili Inc. 's belief.

Therefore, expand the user group, increase the number of members, enhance advertising revenue, from the potential point of view, Bilibili Inc. still has a lot of room for development.

The strong growth of users brings faster growth to Bilibili Inc. 's advertising revenue.

From the perspective of advertising capacity, Bilibili Inc. also has a great advantage.

In addition, the latest data show that 16 Internet companies 19Q2 advertising revenue growth, Bilibili Inc. 's 76% growth is also very impressive.

Therefore, Bilibili Inc., with a deposit of 7.7 billion yuan (7.73 billion yuan for 19Q2 cash, cash equivalents and time deposits), resolutely decided to achieve the target of 120 million to 130 million MAU in 19 years.

1) to build brands, especially for people outside the existing user groups, that is, older or non-urban users, to focus on marketing and brand promotion, so as to stimulate long-term user growth in the future, is currently the highest priority for 2H19.

2) strengthen the ability of algorithms and technology to provide new users with a better experience and enhance user retention

3) increase the investment in the channel and enhance the user acquisition ability outside the natural growth.

This means that although Bilibili Inc. 's 19Q2 sales expense rate remains high and the loss expands-- marketing expenses are 240 million yuan (+ 88% year-on-year, + 32% month-on-month), it will continue to accelerate user acquisition through brands, technology and channels, and it is expected that the proportion of 19Q3 and Q4 sales expenses will reach 19%. 20%.

So where is the ceiling for the end user?

Chen Rui calculates that Wechat has 1.1 billion monthly active users, and if it designed a community based on Bilibili Inc. 's model, it could hold 500m people in China. Bilibili Inc. has two attributes, the first attribute is video, as long as we can accommodate users who watch video; the second attribute is the user's interests, as long as you have interests we can accommodate, the intersection of the two attributes is our space.

So "growth" will become the theme of Bilibili Inc. for a long time in the future.

The pain of stock competition is that everyone is trying to find ways to grow further or risk being eaten.

Weibo Corp wants to rely on the oasis to save himself, the effect remains to be verified, and Bilibili Inc. by seizing young users, accompany young users to grow up together, it seems that the future is a sea of stars.