AI Powers Bilibili's Profits
After six years of listing, Bilibili (referred to as "B station") has finally made a profit.
Financial reports show that in the third quarter of this year, B station's total revenue increased by 26% year-on-year, reaching 7.31 billion yuan; in this quarter, B station's daily active users reached 107 million, and monthly active users reached 348 million; in this quarter, B station's adjusted net profit was 240 million yuan, achieving the first single-quarter profit after listing.
What is even more unexpected is that B station did not "breakthrough itself" by relying on second-element games, animations, and live e-commerce.
Instead, it is an AI company that is far from it that has made B station earn a lot of money.
Becoming a billboard in the AI era
Behind B station's revenue of 7.31 billion yuan, it is mainly due to two major parts: advertising and game business.
Among them, advertising business revenue was 2.09 billion yuan, a year-on-year increase of 28%; game business revenue was 1.823 billion yuan, a year-on-year increase of 86%.
The advertising business of B station, which has been on a downward trend, suddenly made a comeback and even became the core business with the highest revenue, which is a bit puzzling.
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The typical proof of the surge in B station's advertising business revenue is that more money is given to UP masters.
At the beginning of April 2023, B station was still in a storm and controversy due to the reduction of creative incentives, leading to some UP masters to stop updating; but in March this year, B station launched a new version of the annual plan for video creation incentives, increasing the income of UP masters who have not yet made a profit, and creators with a monthly platform income of less than 5,000 yuan in the past half year, with a reward cap of 2,000 yuan.
B station, which has always been "short of money", suddenly becomes generous to UP masters, and the reason is one: B station has found a big gold owner, which is enough to stimulate it to comprehensively improve its content creation ability.
And the one who can make B station change is only the hottest AI at present.
In the public impression, in the AI field, what can make money?
The first is AI companies, whether it is a big model company, an AI landing company, or an AI segmented product, these practitioners are the big head of the AI field, accounting for more than 90% of the players.
Another is the "people who sell shovels", specifically referring to computing power companies led by Nvidia, providing hardware computing power support for AI. Although most of them are hidden behind the scenes, their scale and profits are not to be underestimated.
In addition to AI companies and computing power companies such as "science students", there is also a place for "liberal arts students" in the AI field. They act as an "AI billboard" to provide promotion of AI products.
At B station's 15th anniversary celebration in June this year, B station's chairman and CEO Chen Rui emphasized: "B station is the community with the strongest AI mind in China." He also revealed that more than 90% of domestic AI manufacturers have chosen to communicate with users on B station.
According to B station's official data, in 2023, the daily video playback volume of AI-related content on B station increased by more than 80% year-on-year, and the popular content covered popular science information, AI technology applications, digital people, and creative applications, among other fields.
Similar to Nvidia, which "sells shovels", it may become B station, which "sells billboards".
2024, the year of AI promotion
2023 is the first year of AI, and a large number of AI companies have been established in large numbers like mushrooms after rain. In 2023, determining the product form and consolidating the product foundation is the primary task of AI companies.
By 2024, the direction of AI companies has become "how to let more users use them". It is important to land products, but it is more critical to let ordinary users know about them.
Under this logic, Alibaba Tongyi Qianwen, Byte Beans, Tencent Yuanbao, Baidu Wenxin Yiyan, Kimi, Spark, and other AI companies, have turned some of their R&D costs to advertising investment and content marketing.
Among them, the one that "spends the most money" is Byte's Doubao large model. According to AppGrowing statistics, in the first ten days of June alone, Doubao's investment amount reached 124 million yuan. Byte's advertising costs are all carried out in its own Chuanshanjia Alliance, with lower costs.
So why can B station become a "billboard in the AI era" among so many domestic content platforms? According to the latest data released by QuestMobile, the monthly active user scale of the short video industry has broken through 1.026 billion people, and Douyin and Kuaishou even account for nearly 70% of the total market's user timeshare.
Why can B station become an "AI era billboard"?
The reason is still that B station's users are younger and more fond of trendy technology.
At present, short video platforms have strict "field division". If you want to have fun and watch some entertainment-related videos, go to Douyin and Kuaishou; if you want to learn new knowledge and new technologies, then B station will be the first choice.
B station's in-depth content can better carry the field with a higher AI learning threshold, and in addition to users, the "technology gold content" of B station's UP masters is also a bit high, such as Amazon's senior chief scientist Li Mu, who chose to settle in B station in March 2021 and started teaching AI-related courses.
In addition to the user group, B station has also started to actively introduce AI technology, increase content recommendation and user behavior analysis, and use the data generated by users to improve the accuracy of content, accurately placing the gold owner's advertising to the right users.
Behind Kimi's parent company, The Dark Side of the Moon, with a valuation of more than 3 billion US dollars, it is the biggest gold owner of B station. According to 36Kr's report, Kimi is almost associated with all the entries about "AI" on Bilibili. Kimi offers a CPA (Cost Per Action) quotation of around 30 yuan per user conversion on Bilibili.
This means that for every registered user Kimi gets through B station, the dark side of the moon has to pay at least 30 yuan.
Kimi, who has spent a lot on marketing, has also gained a lot. In April 2024, Kimi ranked first in the AI product list with a 60% increase in PC access volume, beating a group of Internet giants.
Kimi's breakout has made B station a hot spot in AI company promotion channels. After Kimi, B station's keywords such as "AI tools", "good products", "Apps", and so on, have successively appeared in Byte's "Doubao", Tiangong AI, MiniMax's "Xingye" and other AI products.
Similarly, B station's advertising costs have also risen.
B station's self-developed games are still waiting for a hit
Although B station has made a lot of money by the name of "AI world's billboard" and achieved the first profit since listing six years ago.
But the hidden danger of B station is still not small, that is, the game business.
In the third quarter of 2024, B station's game business just won 1.823 billion yuan in revenue, which seems to be a model of accumulation. But even B station itself was a bit surprised.
The biggest contributor to the revenue of 1.823 billion yuan is a SLG game called "Three Kingdoms: The World is Determined" (Simulation Game, strategy game), mainly aimed at middle-aged people. This is far from the original God and second-element field that B station's game mainly attacks.
In fact, "Three Kingdoms: The World is Determined" was developed by a small studio, and B station is just an agent.
Essentially, it is one of the dozens of game projects that B station invested in a few years ago, and it happened to come out, which is very accidental and uncertain and does not represent the rapid progress of B station's game business.
In 2021, B station made self-developed games the main direction of its game business and established six major game studios in a row, with a team size of more than 1,000 people.
But three years have passed, B station has burned tens of billions, but there is only one of the six-game studios left, and several online games such as "Armored War Girl", "Slude", "Elshir: Star Dawn", "Yaoguang Record: The Princess of Turbulent Times" have been flat, and some projects have not lasted a year before stopping the server.
Since the fourth quarter of 2022, B station's game has been negative for six consecutive quarters, and in 2023, the game business revenue decreased by 20% year-on-year.
Although the agency game has come out with a hit, B station's self-developed games are still waiting for the dawn.
And if you want the game business to form a healthy structure, at least two to three games need to make money, and it is impossible to support a company by agency alone.
At least in the game field, B station still has a long way to go.