The broadcast industry, which has been running for many years, stepped on the brake in 2021. According to the 2021 annual reports released by many companies, the conversion from profit to loss has become the development trend of the whole industry.
The thousand broadcast war in 2016 witnessed the prosperity of the live broadcasting industry. After the waves washed away the sand, a few live broadcasting platforms survived, forming an oligopoly in the industry.
In July 2019, with the listing of Betta in US stocks, almost all head live broadcasting platforms have landed in the capital market. More importantly, in terms of profitability, although the pace is different, the remaining live broadcasting platforms have successively changed from loss to profit.
Now, the live broadcasting platform is bidding farewell to the profit era. There are many reasons behind this. Perhaps the most essential is that the life cycle of the whole industry has touched the ceiling. With the peak of user scale and the increasingly strict supervision of the standardized development of the industry, the live broadcasting platform needs to make a choice, whether to let it go or break the situation and rebirth.
Return to the era of loss
At present, the live broadcast industry is divided into show live broadcast and game live broadcast according to the content. Among them, the representatives of the listed companies in the game live broadcast are tiger teeth and Betta, and the representatives of the listed companies in the show live broadcast are Zhiwen group (yuanmomo Technology) and Yingke.
In 2021, the revenue of Huya was 11.351 billion yuan, a year-on-year increase of 4%, and the net profit attributable to the company was 584 million yuan, a year-on-year decrease of 34%.
Although the annual revenue still maintained growth and the company was still profitable, Huya began to turn into a loss in the fourth quarter of 2021. According to the financial report, the revenue of Huya Q4 in 2021 was 2.809 billion yuan, a year-on-year decrease of 6%, and the net loss attributable to the company was 313 million yuan, compared with 253 million yuan in the same period in 2020.
In contrast, Betta's financial performance is worse. In 2021, the revenue of Betta was 9.165 billion yuan, a year-on-year decrease of 4.5%. The net loss attributable to the company was 620 million yuan and the net profit in the same period of 2020 was 405 million yuan. Among them, in the fourth quarter alone, the net loss of Betta reached 193 million yuan.
The same is true for the live broadcast of the show. In 2021, the revenue of Zhiwen group was 14.576 billion yuan, a year-on-year decrease of 3%, the net loss attributable to the company was 2.914 billion yuan, and the net profit in the same period of 2020 was 2.104 billion yuan.
For other companies that do not focus on live broadcasting business, the live broadcasting revenue disclosed in the 2021 financial report is also declining. For example, Kwai's live broadcast revenue was 30 billion 995 million yuan, down 6.7% from the same period last year. Tencent music's social entertainment revenue was flat with the previous year, with a year-on-year decline of 15.2% in the fourth quarter.
It can be seen that the income capacity of the whole live broadcasting industry is in a period of decline. The high growth of the industry in the past benefited from the rapid expansion of user scale and the savage growth of the industry, but now, the continuous introduction of industry regulations requires the development of the industry to return to rationality.
For example, in 2021, the guiding opinions on strengthening the standardized management of webcast jointly issued by seven departments including the state network information office standardized the reward behavior of the webcast platform.
The guiding opinions put forward that for network anchor accounts of different categories and levels, reasonable restrictions should be set in terms of the total amount of rewards received for a single game, the heat of live broadcasting, the duration of live broadcasting, the number and time interval of live broadcasting in a single day, and necessary warning measures should be taken for illegal anchors; Set the limit of single reward and cumulative consumption period of the entertainment service, and set the corresponding payment limit for the user when the single reward and daily consumption period of the entertainment service are triggered, so as to provide reasonable payment information for the user.
Driven by these background factors, the number of paying users that directly affect the revenue of the live broadcast platform also began to decline. By the end of 2021, the number of paying users of Huya had decreased from 6 million in the same period in 2020 to 5.6 million, the number of paying users of douyu had decreased from 7.6 million to 7.3 million, and the number of paying users of Zhiwen group had decreased from 12.8 million to 11.4 million.
There is an urgent need to explore new growth points
So for the live broadcasting industry, some enterprises have taken the lead in exploring the way out.
In 2021, Yingke group's revenue was 9.176 billion yuan, a year-on-year increase of 85.4%; The net profit attributable to the company was 4.33 billion yuan, a year-on-year increase of 113.1%.
The reason why Yingke group can achieve double high growth in revenue and net profit is mainly due to its successful transformation in the past few years. At present, Yingke group has developed a product matrix from a single product of Yingke app, including Yingke, matchmaking, Jimu, etc., covering live broadcast, blind date, social networking and other fields.
In 2021, Yingke group's revenue from live broadcasting services was 2.56 billion yuan, accounting for only 27.9% of the total revenue, while the revenue from social products has reached 62.6%.
Also realizing the transformation is huanju group. Over the past two years, huanju group has successively traded its Huya live broadcast and YY live broadcast to Tencent and Baidu respectively, shifting its business focus to overseas markets.
In 2021, huanju group achieved a revenue of US $2.619 billion, a year-on-year increase of 36.5%; Under non US GAAP, huanju group achieved an annual net profit of US $109 million for the first time and a net loss of US $160 million in 2020.
It is noteworthy that the main revenue pillars of Yingke and huanju group are from the acquired products. In 2019, Yingke group purchased social products Jimu for us $85 million, while huanju group also spent RMB 1.45 billion to acquire 68.3% equity of overseas video social platform bigo in the same year. With its previous shareholding, huanju group realized 100% control of bigo.
Nowadays, the acquired products have become the backbone, and Yingke and huanju group have also realized the sustainable growth of the enterprise through business transformation. This is a reference for the live broadcasting companies that have not yet transformed. Whether through acquisition or incubation, finding new business growth points as soon as possible is the way for long-term development.
Previously, Momo group was renamed Zhiwen group in order to get rid of its excessive dependence on Momo app. In 2018, Momo made a wholly-owned acquisition of social product exploration, and then incubated some new products within the company.
However, at present, the transformation effect has not reached the ideal state. In the fourth quarter of 2021, the live broadcasting revenue still accounted for 58.5% of the revenue of Zhiwen group. However, the proportion of value-added service revenue dominated by virtual gift revenue and member subscription revenue has reached 40%. In addition, the revenue of external mobile game business has also increased by 163.1% year-on-year to 19.3 million yuan.
In the 2021 financial report, tiger teeth and Betta also expressed their willingness to explore new growth engines. Tiger teeth executives said that tiger teeth will be committed to expanding its user base, improving operational efficiency and exploring business diversification. Betta executives also proposed to explore new growth points.