Seeing the small things, the top 100 UP owners are one of the wind indicators for the development of Bilibili. On the evening of January 6th, Bilibili presented awards such as the Best Work of the Year and the Most Popular Work of the Year to the Top 100 UP Masters. Among them, the "Annual Business Influence" and "Annual Business New Power" awards were newly established and won by 16 UP Masters, including "Mr. Dazzled" and "Xiao Chao Dean". In the third quarter of 2023, the daily active users of Bilibili were 103 million, with 1.68 million UP owners earning revenue from Bilibili, a year-on-year increase of 34%. The number of UP owners earning revenue through video and live streaming sales increased by over 160% year-on-year. In the current quarter, the revenue from advertising and value-added services related to Bilibili and UP increased by 21% and 17% year-on-year, respectively. Overall, Bilibili's revenue remained unchanged year-on-year, with adjusted net losses narrowing by 51%. The commercialization path of UP owners may become the key to Bilibili's revenue growth and turnaround.
New awards and monetization related
Once a year, the Top 100 UP Celebration has been held continuously for six years. According to the latest award list, UP's "Movie Hurricane" won the "Most Popular of the Year", UP's "Chess Player Warrior Eagle" won the "Dark Horse of the Year" for live streaming, UP's "Stickman Alan Becker"'s work "Stickman vs. Mathematics" won the "Best Work of the Year", and 16 UP hosts including "Mr. Dazzled" and "Little Tide Dean" were awarded the "Annual Business Influence" and "Annual Business New Power" awards.
The Bilibili Top 100 UP Celebration is an annual event aimed at video creators. In the third quarter of 2023, the daily active users of Bilibili were 103 million, and the monthly active users increased to 341 million. The daily active number of UP owners on Bilibili increased by 21% year-on-year, and the number of UP owners with over 10000 followers increased by 36% year-on-year; The average monthly video submission volume increased by 37% year-on-year to 21 million.
"Xiaochao Dean", one of the eight UP owners of "New Business Forces of the Year", made it to the top of Bilibili's overall ranking in the video collaboration with Alibaba during the "Double 11" period in 2023; One of the eight winners of the "Annual Business Influence" award, "Mr. Mi Deng", paid a total of 1.68 billion yuan through all channels of live streaming sales during the "Double 11" period in 2023, a year-on-year increase of over 400%.
The reason for emphasizing these two awards is that they are newly established awards by the top 100 UP owners on Bilibili, and both are related to monetization. Generally speaking, platform incentives and commercial cooperation are the two main channels for Bilibili UP owners to monetize their content, reflected in revenue and related to value-added services and advertising business.
At present, Bilibili's revenue is divided into four parts: value-added services, advertising, mobile games, IP derivatives, and others. In the third quarter of 2023, Bilibili's revenue from value-added services and advertising services ranked first and second respectively, and they were also the two business sectors that Bilibili achieved year-on-year growth in revenue.
In the view of Bida analyst Li Jinqing, losses are an industry problem for video websites, and it is necessary to distinguish whether losses are chronic illnesses or pains. "In recent years, the commercialization of Bilibili has accelerated, which is something that UP owners are happy to see. Only when creators and platforms form a binding interest and develop positively can content continue to be exported with quality." He told a reporter from Beijing Business Daily, "Currently, Bilibili hopes to bite into the live streaming market, which is highly competitive but with a high ceiling."
Taking "Double 11" as an example, Bilibili has cooperated with Taotian Group, JD.com, and Pinduoduo, and the advertising revenue from top e-commerce platforms has increased by over 80% year-on-year. The GMV (total transaction volume) of UP main videos and live streaming sales has grown rapidly by over 250% year-on-year.
The breakeven point for 2024 is uncertain
In March 2022, Chen Rui, CEO of Bilibili, first proposed that the company would achieve a break even point in 2024, which required Bilibili's three major revenue generating businesses, gaming, live streaming, and advertising, to go hand in hand. But the current situation is that the future is uncertain.
Public information shows that in the past year or so, Bilibili has elevated its commercialization to a new priority, changing its development strategy from "ecological driven" to "ecological and commercial driven". This has led to unexpected achievements in Bilibili's commercialization.
According to the financial report of Bilibili, the revenue for the third quarter of 2023 was 5.81 billion yuan, unchanged year-on-year, with an adjusted net loss of 860 million yuan, narrowing by 51% year-on-year. Especially outstanding in value-added services and advertising business.
In the third quarter of 2023, Bilibili's revenue was 5.81 billion yuan, which was the same as the same period in 2022; The gross profit was RMB 1.5 billion, an increase of 38% compared to the same period in 2022. The gross profit margin is 25%, compared to 18.2% in the same period of 2022. The adjusted net loss was approximately 864 million yuan, a decrease of 51% year-on-year.
From a business perspective, in the third quarter of 2023, the two pillars of Bilibili's business - value-added services and advertising - achieved double-digit percentage year-on-year growth. Advertising revenue reached 1.6 billion yuan, a year-on-year increase of 21%; Value added service revenue was 2.6 billion yuan, a year-on-year increase of 17%.
Bilibili's former pillar business, gaming, achieved revenue of 990 million yuan in the third quarter of 2023, a decrease of 33% compared to the same period in 2022. The revenue from IP derivatives and other businesses was 5.8 million yuan, a year-on-year decrease of 23%, mainly due to a decrease in revenue from the sale of IP derivatives.
In terms of the creator ecosystem, Bilibili has also continued to grow, with a daily active UP increase of 21% year-on-year and a monthly average of 21 million video submissions.
At the same time, the commercialization of Bilibili has enabled these UP owners to achieve sustained revenue growth, forming a healthy development. According to Bilibili's 2023 third quarter report, 1.68 million UP owners on Bilibili saw a year-on-year increase of 34% in revenue, while the number of UP owners who promoted products through video and live streaming increased by 160% compared to the same period last year.
From this, it can be seen that with the continuous growth of UP main content and revenue, the commercialization of Bilibili has been widely recognized by the market - this is related to Bilibili's business model. In the commercialization process of Bilibili, not only does it provide a display platform for the brand, but also relies on a large number of cornerstone users to bring a two-way improvement in brand reputation and sales through high-quality content and user interaction.
With the gradual commercialization of Bilibili, its performance in 2024 is expected. Major investment banks predict that Bilibili's revenue will continue to grow and achieve breakeven in the fiscal year of 2024.