In 2014, when Chen Shaojie led his team to leave Station A and confidently founded Douyu TV, he probably didn't expect it to be today.
The colorful fighting fish is also known as the "Thai fighting fish". The male colorful fighting fish has a bright body color, full and graceful fin shape, and is very aggressive. When two male fish are raised in the same aquarium at the same time, they often fight until one side dies.
The early style and name of Douyu TV were exactly the same, more precisely, it was more like Chen Shaojie's own style. Chen Shaojie, who dropped out of college and enjoys taking risks, often says, "If others dare not do it, I will do it.".
On November 22, 2023, the police in Dujiangyan Irrigation Project, Chengdu, issued a police report that Chen Moujie was suspected of opening a casino, and has been arrested according to law, and the case is under further investigation. Subsequently, Douyu also issued a notice reminding investors that Chen Shaojie's continued detention and any subsequent legal and enforcement actions against relevant parties may have a significant adverse impact on the company's reputation, business, and operating performance.
Douyu TV originated from the live broadcast channel of Station A. The full name of Station A is "AcFun Bullet Screen Video Network". Since its establishment, Station A has been famous for its labels such as anime culture gathering place and the first bullet screen website in China. In 2010, A Station was acquired by Chen Shaojie in his personal name. It was on the soil of Station A that Chen Shaojie incubated the "live broadcast" function, which was the predecessor of Douyu.
Since the independence of A Station's broadcasting channel, Chen Shaojie has played the soul of this company. Unlike his old rival Dong Rongjie's early transformation into a professional manager and gradual exit, until April this year, Chen Shaojie still held a 17% stake in Douyu, second only to the major shareholder Tencent.
Chen Shaojie's style of action can be vaguely seen from Douyu's actions at various critical moments, such as the Battle of Qianbo, going public in the United States, and the failed merger with Huya, as well as his self rescue under the impact of short videos. After key performance indicators continue to decline and US stock prices fall below $1/ADS, people are curious whether Douyu can maintain stability and overcome difficulties in the days of losing its CEO.
But internal rounds of layoffs leave employees with no time to consider the future of Douyu.
The total number of Douyu employees has decreased from the peak of 2000 to over 1000, and there are rumors that it will be further reduced to 800 in the future. Layoffs are jokingly referred to as "getting on the train" by employees. The decline of Douyu is becoming more apparent, and the phenomenon of "actively getting on the car" within the company is becoming more frequent. Those who can receive compensation and successfully get on the car are considered lucky.
Changes are seen by everyone. Several veteran employees who accompanied Douyu through the Qianbo Battle bluntly stated that compared to the past, Douyu today is simply not like a company.
Simple, rough, and swift were once the style of the entire Douyu. The more independent and daring one is in their work, the better they will get along. But now, project initiation requires strict ROI calculation, and internal systems no longer encourage innovation. "No one really thinks about the meaning of doing things anymore, but anything that makes you do something meaningful can be very painful," said a Douyu employee.
From the valuation of 500 million yuan to the listing in the US stock market, the competitors have been upgraded from Panda and Zhanqi to Tiktok and Station B. Bettas has welcomed one opponent after another in the field of live games, and the card table is getting bigger and bigger. Just this time, the fighting fish no longer maintained its wild growth momentum. It aged prematurely, didn't like to swim, and ultimately fell out of the team.
In less than half a year since starting his own business, Chen Shaojie was on a business trip to Shanghai when he received a call from Zhuang Minghao, the then investment manager of Jingwei China. Zhuang Minghao wanted to meet him. Chen Shaojie arrived at Jingwei China's Shanghai office wearing a T-shirt. Compared to other entrepreneurs seeking financing, Chen Shaojie appeared more like a "first party" in front of top domestic VCs.
At that time, Douyu had already received a 20 million angel round financing from Aofei Animation Investment, and in a short period of time, it also opened up A-round financing to the public. It had contact with top VC companies such as Sequoia and Innovation Works, and was already a true "star project".
They chatted for over an hour about Douyu's future strategies and financing pace, and made predictions about industry competition. Zhuang Minghao's most profound impression is that Chen Shaojie is already very clear on how to open up the situation in the early stages of competition.
"Losing to Huya may not be possible, after all, it's YY behind the scenes, but why did Shaojie stay until the end?"
An entrepreneur who has participated in the Qianbo War expressed doubts about Douyu in his early years. In the game live streaming platform of that year, Huomao TV was bound to Perfect World, while Longzhu TV was backed by the esports team PLU, and each showed a strong performance.
For Chen Shaojie, that era was full of opportunities - with the popularization of online live streaming technology and the popularity of two phenomenal games, LOL and DOTA, game live streaming platforms gradually became popular. According to incomplete statistics, there were no less than 200 live streaming platforms available for business information in China in 2016, including Zhanqi, Douyu, Huya, YY, and Panda Live. The survival of Douyu in such an environment is closely related to Chen Shaojie's reckless spirit.
The main source of revenue for live streaming platforms is user reward sharing. For platforms, anchors are the source of traffic and the only truth. A high-quality anchor often triggers a frenzy among all platforms. Among many live streaming platforms, Douyu was the first to offer a contract worth millions of yuan per year to top anchors, while Huanju Group, which was already a US listed company at the time, had a content cost of only 165 million yuan in 2013.
The competition for anchors will not leave any hesitation time for the platform. A common scene at that time was when the operations team went to the finance room to withdraw cash, filled a box with money, and rushed to the anchor's doorstep, in order to have a chance to compete ahead of other competitors.
A slightly exaggerated description of the early live streaming industry is, "Write a bunch of contracts and think of a bunch of signing strategies. It's better to have two cups of Wuliangye directly with the anchor. As long as the relationship is good, after a drink, we will start broadcasting for you tomorrow. This is also what Douyu and many founding employees of live streaming platforms are best at."
One month after receiving 20 million yuan from Angel Wheel, Chen Shaojie spent 15 million yuan, most of it on bandwidth expansion and signing anchors. In the chaotic stage of the industry, Douyu quickly gained popularity and became a popular game live streaming platform with its "licking blood with a knife edge" operational strategy. As mentioned in the previous operation recollection, "Even if it's just the lowest level of operation, even interns, there are dozens of people joining WeChat every day, hoping to cooperate with you."
This approach is certainly risky, but it is also effective enough. With the help of Tencent and other capital, Douyu successfully acquired top anchors such as Xu Xubao, Zhang Daxian, PDD, and Nv Liu, becoming a popular game live streaming platform.
At first, when no one realized the value of this battlefield, Douyu leveraged enough resources with slightly more funds, and their first few shots went very smoothly. In Zhuang Minghao's view, Douyu did almost nothing wrong during the seven to eight months until the fourth quarter of 2014.
This "grassroots hero character" may have an easy-going appearance, but his work style is fast, accurate, and ruthless, and his approach has always been quite wild. Due to concerns about Chen Shaojie's radical style, Jingwei missed Douyu's A-round financing after a moment of hesitation, and Sequoia invested $20 million in Douyu. In the B-round one and a half years later, Tencent also chose to invest in Douyu in order to maintain a cooperative relationship with Dragon Ball Live, which also marked its status in the martial arts world.
As is often the case in internet business wars, few platforms can continue to play capital games. In less than a year, the Qianbo Battle ushered in a wave of bankruptcy, and even Wang Sicong's heavily anticipated Panda Live could not persist. Douyu became the winner with enough risky decisions.
In Wuhan, where the internet atmosphere is scarce, Douyu has even become a city business card, not only because it has taken the top spot in the live streaming industry, but also because of the annual Douyu Carnival. Many employees have commented that the cultural and entertainment atmosphere in Wuhan has always been inferior to that of neighboring Changsha. However, surrounded by the enthusiasm of anchors and fans, the momentum of the Douyu Carnival is no less than that of a celebrity concert.
"At first glance, there were all heads and no place to rest," said an experienced employee. "Especially in 2017, anchors like Da Sima and Lu Benwei each took their fans on a tour of the park, shouting famous memes in the live broadcast room. One after another, everything went yellow and another went red, and the scene was like a large international exhibition."
That was a rare highlight moment for Douyu. Due to the pandemic, the last carnival ended in 2019. That year, Douyu happened to go public on NASDAQ and, with a financing scale of 891 million US dollars, won the largest IPO of Chinese concept stocks to the United States as of that year.
Looking back, the carnival is more like a symbol of the vitality of the fighting fish. In fact, the danger signal has appeared in the year when Beta was listed - less than five months after the bell ringing, the daily live population of Kwai game live broadcast has exceeded the total number of Beta and Tiger Teeth.
Drafted by: Gu Lexiao
The game of giants
On the evening of January 11, 2018, Tencent Interactive Entertainment Group (IEG) made a spin off adjustment, integrating content related business lines into the PCG Content Division, leaving only Tencent Games and Tencent Esports as the original IEG. At the same time, there is also news that has shaken the gaming live streaming industry: the new IEG will become an investor and invest in Huya.
In 2016, Tencent led the investment in Douyu's Series B and Series C financing. In this context, the action of investing in Huya appears to be full of strategic significance.
At that time, the competition between Tencent and NetEase in the mobile gaming industry was in full swing - in 2016, Tencent held a market share of 25.8% in the mobile gaming market with phenomenal products such as "King of Glory", while NetEase held a share of 25.6%. However, NetEase's flagship "Fantasy Westward Journey" still surpassed "King of Glory" and won the first place in revenue for the year.
At that time, the game live streaming industry, which had a considerable number of active users, had become an important game distribution channel and had significant strategic significance for Tencent. With the early acquisition of the battle flag supported by Tencent by Suning and the rise of Huya, investing in Douyu alone is no longer enough to ensure Tencent's control over the gaming live streaming field.
The boots quickly settled down. Two weeks later, Douyu Live and Huya Live's parent company, Huanjue Era, almost simultaneously announced that they had received strategic investment from Tencent. Tencent's shareholding in Huya has reached 34.6% and has agreed to reach 50.1% within the next two years.
For Douyu, who successfully broke through in the Battle of Qianbo, the crisis has quietly emerged. Before the emergence of King of Glory, the popular games in game live streaming were basically dominated by PC games, and the PC game anchors recruited by Douyu were also its core resources to maintain its leadership. But the competitive mobile game craze brought about by "King of Glory" has become a new variable in the industry, and the response of Douyu this time has been slow.
A Douyu former game partition operator recalled that in 2016, the company's main operating direction was still focused on PC games, and the employees of the mobile game project team that was subsequently built were only in single digits. At the same time, Huya has successfully caught up with Douyu in key indicators by investing in its opponent's gaming platform, and there have been rumors in the industry that Douyu is stronger than PC games and Huya is stronger than mobile games.
But what is even more fatal for Douyu is that as a copyright upstream in the game live streaming industry, Tencent's original stance on Douyu has been shaken.
In November 2017, the Guangzhou Intellectual Property Court made a first instance judgment on NetEase's lawsuit against Guangzhou Huaduo Network Technology Co., Ltd. for copyright infringement, determining that the game screen belonged to a part of the game company's copyright. This means that Tencent and NetEase, which control the majority of phenomenal domestic game copyrights, have become the absolute upstream players in the game live streaming industry.
Despite the heated battle between Qianbo and NetEase, investing in platforms such as Douyu, Huya, and NetEase CC is only a tactic at the distribution channel level compared to the gaming battlefields of Tencent and NetEase.
On the night of the most intense competition between the two sides, Tencent's Ren Yuxin called Chen Shaojie. On the phone, Ren Yuxin explained the current situation and didn't say much. He asked Chen Shaojie what he planned to do next.
Chen Shaojie has a very clear idea of how to stand in line, from allowing Tencent to invest, to allowing Tencent to increase its stake as a major shareholder, including maintaining a good relationship with Ren Yuxin, he has always been very clear about the overall direction. A clear example is that less than a month after announcing their acquisition of Tencent's financing, Douyu and Huya cancelled the live broadcast of NetEase's flagship mobile game product, "The Fifth Personality.".
As financing progresses round by round, the voice of major shareholders becomes increasingly powerful. At the end of 2018, Tencent Holdings had a total valuation of over 4 trillion Hong Kong dollars, which was over 500 billion US dollars at the exchange rate at that time. At that time, Douyu and Huya had valuations of 2.5 billion US dollars and 1.33 billion US dollars respectively.
This giant from another dimension entered the game live streaming battlefield with a direct investment of 1.1 billion US dollars on January 11, 2018, changing the competitive landscape. It indirectly declared the death of Panda Live and laid the groundwork for the merger of Douyu and Huya.
But the competition for the top spot in the industry has not stopped. Since the two sides will eventually merge, who will be the main body, who will go and who will stay? The opponent in the aquarium is not dead yet, and the fighting fish cannot stop swimming.
The "card lottery" model, which is currently accused of opening casinos, has also begun to ferment during this period. The source of playing methods can no longer be studied, and now it has become the "standard configuration" of major live broadcasting platforms, such as the lucky bag of Tiktok live broadcasting, and the TV of Tiger Teeth live broadcasting. Most of Douyu's top anchors have also participated in such "card lottery", but the amount of prizes issued by the anchors varies.
This radical interactive strategy has brought tangible traffic and benefits to Douyu, but there are also compliance risks involved. According to the announcement of Dujiangyan Irrigation Project Municipal Court, the live broadcast room of "sending fish to nine outdoor" with excessive amount of money involved in the case was found to constitute the crime of opening a casino. Since March 2017, the live broadcast room has started to use the platform function to organize lottery, and by September 2020, it had 3.13 million fans, "attracting" 120 million yuan.
In May 2018, Huya was the first to go public in the United States. At the same time, Douyu has also started planning to go public internally. Around the popular game "PlayerUnknown" released in 2017, there has been a new competition in the game live streaming industry, and listing and financing have become the top priority for Douyu.
At this point, the prospectus and a merger proposal to merge Panda Live were almost simultaneously placed at Chen Shaojie's desk. He has met twice with the Panda team to discuss a merger plan. Panda Live has a RMB structure, while Douyu has a VIE structure. Due to cash reserves, both parties involved in the transaction will inevitably be involved in share exchange. However, Douyu, who is in a hurry to go public, has not had the time to adjust its share structure.
This merger and acquisition negotiation lasted for several months, and Chen Shaojie did not provide a clear response, but the willingness of Douyu to communicate continued to decline and eventually became unresponsive.
One year and two months after Huya went public, in July 2019, Douyu finally went public as planned. The ringing of the bell was live streamed on Douyu platform, with Chen Shaojie dressed in formal attire and accompanied by layers of barrage on stage. His speech was slightly stuttering, but his eyes were bright. "Today is the highlight moment of Douyu, but it's definitely not the peak moment."
These two old rivals are finally facing each other head-on in the US stock market. But what the industry understands is that with the return of Penguin Esports to Tencent IEG, the establishment of Tencent's Game Live Business Department and the appointment of executives who also serve as Vice President of Douyu, and Tencent's increase in holdings in Huya, a series of actions have gradually turned the merger into reality.
Drafted by: Gu Lexiao
Infinite competition
Starting from the end of 2020, using Tencent as a template, Douyu began to adjust its internal organizational structure and job level system. The reporting lines of some operating departments were changed, and a middle platform department was established at the company level, specifically responsible for coordinating with Tencent. The news of changing to a 'blue work card' began to spread within Douyu.
As widely speculated by industry insiders, the merger of Douyu and Huya has been put on the agenda. In October 2020, Douyu and Huya announced that they had signed a "merger agreement and plan" and officially accepted the merger invitation proposed by the major shareholder Tencent for a strategic merger. After the completion of the share exchange merger, the existing shareholders of Douyu and Huya will each hold 50% of the economic equity in the merged company, and Tencent will hold 67.5% of the voting rights in the merged company.
The competition with Huya has also eased. An employee of the Douyu PGC business unit said that at that time, both parties would even cooperate to purchase the copyright of the competition, and some of Douyu's self-made competition copyrights would also be opened to Huya at market prices, which was impossible before.
A person close to Tencent's post investment department told InterfaceNews that, in addition to Tencent's integration, external pressure from Station B, Tiktok and Kwai was also a major reason why bosses were willing to sit down and negotiate together. While the fighting fish and tiger teeth are still concentrating on the battlefield of mobile game live broadcast, new product forms such as short video and medium video are emerging rapidly. The monthly active user data of Station B in 2017 is nearly 71.8 million, and the monthly active user number of Tiktok in China has exceeded 500 million.
According to a former Douyu employee, Douyu quickly noticed the new product form of short videos internally, but the judgment drawn was that it did not constitute a competitor. At the second financial report conference after listing, Chen Shaojie said that from the perspective of user groups, the game categories covered by Douyu and Kwai are different.
During 2020, Chen Shaojie mentioned several times during financial report conference calls about a "high-quality content ecosystem centered on games", and the concept of "community" was also emphasized multiple times. The subsequent strategy of "live streaming+video+community" further proves that Douyu believes that the Chinese video platform represented by Bilibili has taken away its own cake and is the most direct competitor. On the last day of 2020, Douyu App 7.0 was updated, with video, live streaming, and community becoming the most eye-catching entry points on the homepage.
Douyu hopes to recover lost users and increase their stay time by expanding video content and providing a user communication platform. In fact, Douyu employees from multiple departments such as anchor operations, event operations, and PGC content production have all told Interface News that for a long time to come, the priority of user stay time in employee assessment indicators will continue to be raised.
Industry insiders have stated that making this judgment at the time was understandable. It's too difficult to ask the founder and team to break away from path dependence and see how difficult it is. Everyone will definitely