Reporter Wen Menghua
On March 7th Beijing time, Bilibili (HK09626, stock price of HKD 83.4, market value of HKD 35.1 billion, hereinafter referred to as Bilibili) submitted its 2023 report card.
The data shows that the total net revenue of Bilibili in 2023 was 22.53 billion yuan, of which 6.35 billion yuan was achieved in the fourth quarter. The net losses for the fourth quarter and full year of 2023 were 1.3 billion yuan and 4.81 billion yuan, respectively, narrowing by 13% and 36% year-on-year.
In the past two years, moving towards breakeven has always been an urgent "small goal" for Bilibili. At the financial report conference call that evening, Chen Rui, Chairman and CEO of Bilibili, reiterated that "achieving profit goals" is one of the most important tasks for Bilibili in 2024.
He said, "By continuously improving operational efficiency, further optimizing gross profit margin, and managing expenses reasonably, we are confident that we will achieve a positive operating profit after adjustment in Q3 2024 and begin to make profits."
Double growth in advertising and value-added revenue, dragging down the gaming business
In the past year, advertising and value-added services have remained the "main force" of Bilibili's revenue, while the former "cash cow" gaming business continues to be weak.
According to the financial report, in the fourth quarter of 2023, Bilibili's advertising revenue increased by 28% year-on-year to 1.93 billion yuan; The revenue from value-added services reached 2.86 billion yuan, a year-on-year increase of 22%. From a full year perspective, in 2023, Bilibili's advertising revenue was 6.41 billion yuan, a year-on-year increase of 27%; The revenue from value-added services reached 9.91 billion yuan, a year-on-year increase of 14%.
During the financial report conference call, when talking about advertising business, Li Ni, Vice Chairman and COO of Bilibili, said, "The overall proportion of advertising revenue has increased from 25% in 2022 to 30%, directly driving the increase in the company's overall revenue gross profit margin."
Li Ni believes that seizing the node advantages of vertical industries, the advertising related revenue brought by sales promotion, and the integration of multiple product lines are still areas worth paying attention to in advertising business. For example, during the Double Eleven shopping festival, the GMV of live streaming sales increased by over 250% year-on-year, and the number of live streaming sales sessions also increased by over 100% year-on-year; In the maternal and child care industry, e-commerce platforms and brand customers have brought in nearly 90% of new customers.
In the field of value-added service business, Bilibili has developed a series of products such as live streaming, large membership, comics, audio dramas, paid classrooms, charging, etc. Among them, live streaming revenue is the main driving force for the growth of value-added service revenue.
In Chen Rui's view, among the many value-added service products, live streaming will have the most potential and fastest growth in the future. "Because live streaming is a more common value-added service that UP owners can do, 1.8 million UP owners earned revenue through live streaming in 2023."
By contrast, although Chen Rui personally stepped down to take charge of the game at the end of 2022, Bilibili's gaming business has always been difficult to reproduce its explosive popularity. Both the fourth quarter and full year of 2023 saw varying degrees of decline in revenue for Bilibili games.
Data shows that in the fourth quarter of 2023, Bilibili's mobile gaming revenue was 1.01 billion yuan, a year-on-year decrease of 12%; In 2023, the revenue of mobile games was 4.02 billion yuan, a year-on-year decrease of 20%. Bilibili stated that the decrease in game revenue for the whole year of 2023 was mainly due to a decrease in the number of new game launches and a decrease in revenue for several games.
Over 3 million UP owners earn money, with live streaming and advertising becoming important sources of income
Behind the frenzy of losses reduction, users and traffic remain the cornerstone supporting the rapid growth of the platform. After the daily active users enter the era of over 100 million, Bilibili has always held onto young people.
In the fourth quarter of 2023, the daily active users of Bilibili reached 100 million. Among them, the average age of Bilibili users remains around 24 years old, and the coverage rate of Z+generation users reaches 65%. As of the end of 2023, 230 million users have passed the entrance exam and become official members of Bilibili. The retention rate for official members in the 12th month has remained stable at around 80%.
"What is the core competitiveness of Bilibili? Bilibili is the platform with the highest density of young people in China, and the value of advertising platforms lies in user value. These young people, with an average age of 24, are in the rising range of consumption. Whether it is short-term transaction conversion or long-term establishment of consumer mentality, they will choose Bilibili." Li Ni admitted.
In terms of creators, in the fourth quarter, the daily active UP owners on Bilibili increased by 16% year-on-year, with the number of UP owners with over 10000 followers increasing by 30% year-on-year; The average monthly submission volume exceeded 23 million, a year-on-year increase of 31%.
At the beginning of 2023, due to the issue of UP main revenue, Bilibili was once embroiled in the UP main stop incident. Nowadays, with the acceleration of platform commercialization, live streaming and advertising are becoming increasingly important sources of income for Bilibili and platform creators.
In 2023, over 3 million UP owners obtained revenue from Bilibili through various monetization channels, a year-on-year increase of 30%. Among them, the number of UP owners who obtained revenue through advertising increased by 94% year-on-year; During the Double 12 period, the sales volume of UP's main live streaming sales exceeded 50 million yuan.
In the field of content payment, over 1.8 million UP owners generated revenue through live streaming in 2023, with over 200 UP owners producing paid courses that generated over 1 million revenue streams, and even UP owners receiving nearly 4 million revenue streams for a single charging exclusive video.
According to the financial report, the revenue sharing cost of Bilibili in the fourth quarter was 2.8 billion yuan, an increase of 12% compared to the same period last year; The revenue sharing cost of Bilibili for the whole year of 2023 was 9.5 billion yuan, an increase of 4% compared to 2022.
Chen Rui stated that this year, we will focus more on discovering high-quality UP owners and increasing their activity, providing smooth monetization channels for more high-quality UP owners.