Depth independent penetration
A crossroads in development
Author: Mondo.
Editor: Wu Shuang.
Style: Ling Yu.
*: Shoucai - Shoutiao Institute of Finance and Economics.
Looking at the expected dishes, it is the norm of capital.
Recently, with the disclosure of the third quarter report of Chinese concept stocks, investors have also started a new round of voting with their feet.
For example, after the social e-commerce Pinduoduo handed over a brilliant third quarter report, its market value ushered in a wave of surge, surpassing its big brother Alibaba, and it was unique for a while.
Where there is prosperity, there are those who are lonely. Station B, which has peaked in the Internet traffic dividend and explored its own business strategic transformation, handed over a mixed three-quarter report, and is stuck in the end
Continued from above:
The cost of income has continued to fall, and the head anchor has fled
After the decline in paying users, after the cost reduction
If you can't change the market, then change yourself.
Similar to the situation of station B, Huya also chose to reduce costs and increase efficiency.
The latest three quarterly reports show that the company's revenue in the first nine months was 541.8 billion yuan, down 2388%；Net profit 8012100,000 yuan, a year-on-year increase of 11228%。
It is rare to increase profits without increasing income. Wu Xin, Co-Chief Executive Officer and Vice President of Huya**, said: "[The increase in profit without increasing revenue] reflects our continuous operational optimization efforts. ”
An in-depth financial report shows that the key way to increase profits without increasing income is to reduce costs. In 2022QQ, Huya's cost of revenue was 238.6 billion yuan, 169.3 billion yuan, 154.8 billion yuan, 142 billion yuan, declining continuously.
Specific to the various expenses, the marketing, sales and administrative expenses for the first nine months were 49.6 billion yuan, down 18 percent year-on-year88%, R&D expenses 43.9 billion yuan, down 18 percent year-on-year24%。In the third quarter, Huya's marketing, selling and administrative expenses were 15.5 billion yuan, down 2345%, R&D fee 14.2 billion yuan, down 1746%。The reduction in volume far exceeded the net profit for the same period.
One can't help but wonder how much profitability has really improved. Maybe there is helplessness. In 2022, Huya's revenue will be 92200 million yuan, down 18 percent year-on-year77%, and the net profit loss attributable to the parent company was as high as 48.7 billion yuan, compared with a profit of 5 in the previous year$8.3 billion.
It is true that increasing the level of refinement and surviving the cold winter needs to be affirmed, but we can see whether the revenue is benign and sustainable instead of increasing but decliningIf it is blindly dependent, it will have a geometric impact on the subsequent growth and market competitiveness of the enterprise
Since entering 2023, Huya's revenue has declined year-on-year for three consecutive quarters, and the price is a bit big. It is worth noting that the profit in the third quarter showed a double decline: revenue of 164.8 billion yuan, down 3073%；The net profit attributable to the parent company was 12.1 million yuan, a decrease of 79 from 60.4 million yuan in the same period of 202297%。Breaking the trend of net profit rising in the first two quarters.
You know, this is still a year-on-year decrease in total operating expenses of 207% after the result. Is it a failure to reduce costs and increase profits?
On November 14 (the day of the earnings report), Huya's share price rose 76% to close at 368 USD. However, as of December 6, it closed at 3$44, market capitalization of less than $8200 million US dollars, it is obvious that the boost effect of increasing profits without increasing income is limited. Elongate the dimension, if compared to the beginning of the year 4$3 is also a drop of more than 20%.
What is the market waiting for?
In the third quarter of 2023, Huya Live averaged 86 million mobile monthly active users, basically the same as the same period in 2022. Compared with station B, which has a daily activity of more than 100 million, its popularity needs to be improved. And the number of paying users was 4.2 million, down 23 from 5.5 million in the same period last year64%。
Sailing against the current, if you don't advance, you will retreat. As a technology-driven content company with game live streaming as its core business, Huya covers more than 3,800 games, and has gradually formed a diversified barrage interactive live broadcast content covering entertainment, variety shows, education, outdoor, sports, etc., carrying the youthful memories of countless netizens.
However, with the rise of short ** platforms, user Xi habits have changed, Huya's advantage has gradually been eroded, and the loss of head anchors is a signal. For example, Zhang Daxian, the former anchor of the glory of the tiger tooth king, has recently restarted the live broadcast on Douyin.
It is reported that Zhang Daxian previously had 43 million+ fans in Huya, and he was the first brother in the glory section of the platform. The impact of its departure on Huya's popularity is self-evident.
In a sense, anchors are content, traffic, and performance.
Penalty complaint annoyance
To gather popularity, it is necessary to temper internal skills
To say a thousand things, the regain of the popularity of the platform is still in the content and services.
Recently, the gambling case of the CEO of Douyu has spread widely, and many head anchors such as Xuxu Baby have stopped broadcasting. This is a wake-up call for Huya, and it once again marks a red line for the live broadcast industry.
Looking back at the two years of the soaring live broadcast industry, the Internet celebrity dream that has spawned has made countless people devote themselves to it. In order to win attention, some anchors often stage some operations to touch the red line. In the early days, the major platforms chose to turn a blind eye due to the interests of traffic. However, with the improvement of relevant rules and the increasingly strict and detailed supervision of the corresponding regulations, practitioners who continue to be obsessed with extensive operations are tantamount to killing chickens and eggs and engaging in a dangerous game.
In March 2022, the Cyberspace Administration of China and other three departments jointly issued the "Opinions on Further Regulating the Profit-making Behavior of Online Live Streaming to Promote the Healthy Development of the Industry", which clearly pointed out that the upper limit of a single virtual consumer product and a single tip should be reasonably set, and a cooling-off period and a delayed receipt period should be set when necessaryIn April, the Cyberspace Administration of China and other three departments launched a special action to "clean up and rectify chaos in the field of online live broadcasting and short **", and the notice stated that it would further focus on rectifying illegal and illegal content such as "sexuality, ugliness, weirdness, fake, vulgarity, and gambling";In May, the ** Civilization Office and other four departments jointly issued the "Opinions on Regulating Online Live Streaming Tips and Strengthening the Protection of Minors", which clearly prohibits minors from participating in live broadcast tips and strictly controls minors from engaging in anchors.
Focusing on Huya, although the main game is live broadcast, there are not many lessons from previous punishments.
On October 26, Tianyancha APP showed that Guangzhou Huya Information Technology was fined 30,000 yuan and confiscated 590 illegal gains by the Guangzhou Municipal Bureau of Culture, Radio, Television and Tourism because the online performances provided by the "Huya" live broadcast platform contained content that endangered social morality$5.
In July 2022, after an investigation by the Panyu Bureau of Culture, Radio, Television, Tourism and Sports, Huya was confiscated by the regulatory authorities for violating the provisions of Article 16, Paragraph 9 of the Interim Provisions on the Administration of Internet Culture, operating the Huya live broadcast platform to provide Internet cultural products containing content that endangers social morality913$5. A fine of 20,000 yuan.
In addition to the regulatory hammer, consumer complaints are also emerging. Browsing the black cat complaints, as of 22:00 on December 7, 2023, there have been a total of 3,771 Huya-related complaints, mainly focusing on the anchor's non-redemption of awards, indiscriminate deductions from the platform, and poor supervision.
For example, on November 1, the complaint of the numbered 17369551051 showed that a consumer won the Smart Monarch Award for the Return to the Empire "Discuss the Return to the Empire in Your Heart" that he participated in Huya Xinyou in April 2022. After the official information was collected, it has not been released. The official group administrator did not reply to the message, and found Huya's official customer service no less than 20 times, each time saying that he would wait for 7 working days, and the result was a year and a half!So far, I haven't been rewarded yet.
On October 28, the complaint of the numbered 17369474489 showed that a user won 1,000 coupons on TV on the evening of October 21 in Huachuang-Lv Dehua (243*** live broadcast room, equivalent to 100 yuan. On the third day, at 22:40 on October 23, he filled in the award information, but the anchor did not issue the award within three days.
On October 27, the complaint of the numbered 17369458813 showed that Alipay, a user of the platform, inexplicably generated two deductions and complained about Huya's indiscriminate deduction. On August 22, the numbered 17368237334 complained that a user's mobile phone was inexplicably deducted during charging.
On October 6, the numbered 17369063058 complained that the Huya platform heartbeat dinner and magic duck existed in a small way, but the Maldives had a 4% probability of appearing but did not appear in seventy or eighty consecutive rounds, inducing people to gamble.
The above complaints have been reviewed by the platform
It is true that it is not realistic to have a large number of fans, thousands of users, and everyone is satisfied, and the above complaints may also be biased and one-sided. However, it is an indisputable fact that the live broadcast platform values emotional value, and poor consumer experience is obviously not conducive to retaining users and boosting the popularity of the platform.
With the exodus of top anchors, stricter external supervision, and the loss of paying users, Huya still needs to polish its internal skills in quality control and risk control. How to grasp the balance technique and recite the content business scriptures thoroughly is a soul exam question.
Embrace innovation and read the content business experience
Content is king, never out of style.
As the saying goes, where there are people, there is demand. In this sense, the above troubles of station B Huya are only temporary pains. As long as you focus on the content and experience, after a period of dark training, it is unknown whether you will eliminate the growth resistance point or not.
With short **, Douyin and Kuaishou have opened up a profit path for content e-commerce, which has made a sample for Station B and Huya. Also holding the trump card of content, how to break through the barriers between content products, tap the derivative value of fans in combination with its own tonality, and thicken the moat of content monetization is an ongoing topic.
The good news is that both businesses have clear goals.
In August this year, on the occasion of Huya's seventh anniversary, the new chairman Lin Songtao announced the launch of a strategic transformation and formulated a three-year plan. The transformation direction includes providing game-related services such as game distribution, as well as optimizing the revenue structure of content creators.
At the second quarter of this year's results communication meeting, Huang Junhong, co-CEO of Huya**, answered investors' questions on the new strategy: "Our main goal is to increase the revenue of game-related services to 30% of the total revenue within three years, and create a more balanced and diversified revenue structure." ”
Huang Junhong revealed that Huya is currently building a new business infrastructure, including the creation of features and products required to provide game-related services, and is also negotiating terms of cooperation with relevant game studios and publishers. "It is planned to run through the process of selling game props and distributing games within this year, and realize game access. ”
It is not difficult to find that games, as a feature of the platform, have always been a breakthrough in the development of Huya. In addition to participating in the game props and distribution links, it also extends to the e-sports events.
On December 2, Chen Jiajie, director of Huya's live broadcast content production department, told ** that Huya will rely on the newly created "village game" brand to invest in "rural e-sports", so that the e-sports industry will sink to third- and fourth-tier cities, counties or towns.
Looking at station B again, after cutting the self-developed game, the direction of transformation is clearer. In the third quarter, live advertising grew by double digits, and operating cash flow turned positive for the first time, fully reflecting the initial results after the strategic adjustment. As Chief Financial Officer Fan Xin said, "(Station B) operation has entered a positive cycle. ”
From a deep point of view, the high growth of the two major businesses is related to the continuous innovation and continuous change of enterprises. For example, the initial purchase link method of station B was to directly display advertisements to live broadcast goods, ** ads, and click on the blue chain to jump directly to the product page to pull weeds. It has now become an efficient link that can be clicked in the comment section.
Benefiting from this, in this year's "Double Eleven" promotion, the GMV of live broadcast and ** with goods on station B increased by more than 250% year-on-year. In addition, according to the investment community, the cumulative payment amount of the up master "MR Mi Gaze" live broadcast with goods through all channels is as high as 16800 million yuan, an increase of more than 400% year-on-year.
With the roar of the e-commerce engine, Station B has added a few more expectations to fulfill its profit commitment by the end of 2024.
Leo Tolstoy once said that there are two kinds of people in the world, one is the watcher and the other is the doer. It is difficult for people who want to change the world to succeed, but people who change themselves succeed. From all kinds of perspectives, Station B and Huya, which have Internet genes, do not lack the courage to self-change and embrace user awareness, which is also the reason why the two can grow all the way and withstand the ups and downs of the cycle.
But again, the market waits for no one, competing products don't wait for anyone, and investors don't wait for anyone. After finishing its work, 7-year-old Huya and 14-year-old station B, whether it is reducing costs or pushing new ones, there is a profit defense battle at the moment.
Can you read the content of the business scriptures well?
This article was originally written by Shoucai