TechWeb March 13 / vegetable sauce
The live broadcast industry is facing a two-day situation of ice and fire. On the other hand, a large number of platforms are in trouble, and the other side still has a lot of platforms to make money.
Last week, Wang Sicong, the birth of the panda live, after a year of struggle to declare bankruptcy, demobilizing staff. For a moment, the voice of the singing down live again. Combined with the closure of the national broadcast before the year, the shadow of the suspension of mint and mashed potatoes has not been dispersed, and the "live winter theory" has become more and more intense.
On the other side of the coin, the financial data of Momo is still good, and the number of monthly active users continues to grow, and the enthusiasm of paying users is not reduced. The financial data of Momo is still better than that of YY, Tiger teeth, which has been released successively. All three platforms are profitable, in which live broadcast business contributed more than 80% of revenue, is still the biggest contributor.
In fact, the collapse of Panda Live is more due to problems with its internal operations and the funding chain. The industry is speeding up the shuffle and poorly operated platforms will be phased out, but that does not mean that the broadcast is cooling.
Head broadcast platform is looking for new ways to realize cash, Momo CEO Tang Yan said in a telephone conference of financial analysts that in 2019 the live broadcast team will tap new demands from both product and operation aspects, and reflect the customer is actively exploring the sinking market. The performance of YY's acquisition of BIGO is also worth looking forward to, as they try to tell the next growth story.
Live broadcast business is still the biggest revenue player
In the fourth quarter of 2018 and the full-year financial report, the revenues of YY, Huya and Momo achieved year-on-year growth, and Huya’s growth rate was the largest. In 2018, the total revenue reached 4.636 billion yuan, a year-on-year increase of 113.4%. The annual revenue of YY and Momo exceeded 10 billion yuan, reaching 15.763 billion yuan and 13.4818 billion yuan respectively, up 36% and 51% year-on-year.
In terms of profitability, it is not measured in accordance with US GAAP. In 2018, the net profit of Momo was 3.462 billion yuan, up 39.4% year-on-year; YY net profit was 3.196 trillion yuan, up 18.4% year-on-year; Huya net profit was 460 million yuan. In the same period last year, it was a loss of 40.9 million yuan.
However, a closer look will find that the difference, Huya main business profit level is not too stable, the second quarter of last year's income did not increase profits, appeared a loss of 17.3 million yuan; YY also lost 136.9 million yuan in the second quarter of last year, Momo's most stable performance, but also the strongest profitability, has been 16 consecutive quarters of profit.
In terms of revenue composition, the financial report reflects the same data: live broadcast is still the most profitable business, accounting for more than 80% of total revenue.
According to TechWeb, YY live service revenue accounted for 92.89%, 93.32%, 94.35%, 94.98% and 94.61% of total revenue in the five quarters from Q4 in 2017 to 2018, respectively. Huya TV's service revenue accounted for 93.5%, 93.9%, 95.5%, 95.3% and 95.8% of the total revenue, respectively. Momo's live broadcast services accounted for 84.9 percent, 85.4 percent, 83 percent, 76 percent and 76.98 percent of the total revenue, respectively.
The importance of the live broadcast business is self-evident, but there is a certain risk of over-reliance on live broadcasts, and it is easy to touch the profit ceiling. The live business model is actually very simple. The platform builds the anchor, the anchor provides the content, the fans pay for the content, and the platform gets the share from the rewards and advertisements.
In essence, the live economy is also a fan economy. But the risk is that the more anchors the platform builds, the more the cost of input is, and the less room for rewards the anchors bring. This is also the reason why the revenue of the live broadcast platform does not increase profits.
So, the diversification of revenue structure is particularly important, live broadcast platform to find ways to reduce live broadcast revenue as a proportion of total revenue, while expanding other ways of revenue. From this point of view, YY and Tiger teeth have been in the wind, Momo's live revenue as a share of total revenue continues to decline, compared with YY, Tiger teeth proportion of nearly 20 percentage points lower.
As can be seen from the financial report, this is mainly due to the rapid growth of value-added service revenue, which has occupied a share of some live broadcast services. In the fourth quarter of 2018, Momo's value-added services revenue was 722 million yuan, a year-on-year increase of 272%.
Momo President and COO Wang Li said in a conference call for financial analysts, "The rapid development of virtual gifts outside the live broadcast has driven VAS (value-added services) revenue to accelerate year-on-year growth in the past four quarters."
This has a lot to do with the social genes of Momo. Wang Li revealed, "Although most of the current Mo Mo income comes from the live broadcast business, the live DAO accounted for less than 30%, and more than 70 users are using other social experiences that are completely unrelated to live and talent shows."
It is reported that in 2019, Mo Mo plans to speed up the pace of trials and create more payment scenarios for virtual gifts in social experiences outside the talent show. This means that value-added services have great potential for development.
Paid users continue to grow
The short video diverted some live broadcast users, but from the financial reports of YY, Huya, and Momo, monthly active users and monthly average paying users continued to grow steadily.
Momo took the lead in realizing the number of monthly users in the first quarter of 2018, and the number of monthly users reached 113.3 million in the fourth quarter. In the fourth quarter, Huya lived more than Moto, reaching 116.6 million, but the number of paid users was the least among the three platforms, only 4.8 million. In the same period, the YY mobile terminal was 8.9 million, and the Momo was 13 million. Explore 3.9 million).
Tang Yan said, “According to the rough estimate, the MAU of the two platforms of Momo and Exploring is less than half of the size of our target market. How fast can we achieve growth and further penetrate the target user group, depending on how fast we can The speed of innovation drives more users to effectively discover new friends and build high quality interactions."
At this point, Momo's unique social properties play a greater role. In fact, Momo has been enriching the social scene for the past two years, introducing multiple dimensions of connectivity to explore. Logging into Momo three years ago, what you can do may be limited to looking for people around you and chatting through IM. Today users can connect and interact through a variety of application scenarios, including "nearby" features, live streaming, short videos, social games, karaoke and other forms of audio-video interactive experience.
According to the data disclosed by Momo, the current DAU penetration rate of the chat room has been the same as that of the interest group. Since the time spent by the user on the voice chat is much higher than that of the text form, the total duration of the voice chat room has exceeded the interest group. Doubled and reached half of the live stream.
This is a stranger social start, Tang Yan is very confident in social aspects, he said in the analyst conference call last quarter, "At present, there is no competitor, can give us pressure on social aspects." Exploring around the user's core demands, the border will be very wide, and it will not compete with other platforms to generate user competition.
Looking for incremental users in overseas and sinking markets
Last year, a lot of fun and interesting headlines went to the United States to go public, let people see the great potential of third- and fourth-tier cities. At a time when the demographic dividend is gradually disappearing, the live broadcast industry is also targeting the sinking market and overseas markets, vying for incremental users.
On March 5th, YY announced the completion of a wholly-owned acquisition of BIGO, an overseas video social platform, with a total transaction volume of approximately US$1.45 billion. BIGO has a live broadcast platform BIGO LIVE, a short video platform BIGO LIKE and a social platform HELLO. It has an important position in Southeast Asia, South Asia, the Middle East and the Americas. According to the data, by the end of 2018, BIGO has reached 69 million monthly active users worldwide. The acquisition of BIGO by YY has undoubtedly brought more possibilities for expanding its overseas market.
The live game platform is also accelerating the layout of overseas markets, and the first step taken by Huya last year to develop an independent app, NIMO TV, was to enter Southeast Asia. Tentacle Live also launched its own live broadcast platform game.ly. in the Indonesian market.
Yingke focuses on the sinking strategy. When Yingke CFO Li Jin went public, he said bluntly that the live broadcast was not out of date, and that user sinking was also an inflection point. The 2018 semi-annual report showed that Yingke would invest 100 million in publicity expenses in focus. The promotion channel and reputation will sink from the first-tier city to the second-third-tier city, or take the way of city competition, which will eventually expand the size of the user market.
Momo is also looking for opportunities in the sinking market to reduce communication barriers through audio and video and entertainment content. Probe founder Wang Yu said the Chinese market remains at the core and that it does now focus on overseas markets, especially in Asia, because it is a huge opportunity to explore future growth.
Tang added that overseas markets will adhere to two principles, one is to have a mature business model, and the other is to conform to the areas of advantage of the team. Momo does not yet have a definite plan to explore the opportunities in this area will be more deterministic.