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BILIBILI's Commercialization - 2020 Will be an Important Year

Updated: Mar 11

Recently Xiaohongshu decided to add e-commerce live streaming, making a lot of loyal users worried that commercialization may damage the community.While all other platforms are moving quickly on commercialization, Bilibili seems to be moving slowly.


This makes me think - is Bilibili not ready for commercialization or are they still looking for the best ways to monetize? So I looked into Bilibili’s developing journey and their recent financial report and here is what I found.


WHAT’S BILIBILI’S CURRENT SITUATION?


According to Bilibili’s financial report in Q3 2019, it has over 128 million MAU, with a growth of 38% from last year. Daily active user reached 38 million.



Bilibili was founded in 2009 as an ACG (animation, comic and games) video sharing platform. After 10-year developing, Bilibili has become much more than an ACG platforms. Now there are 15 different content categories on Bilibili. Lifestyle, entertainment, and game are top 3 popular categories. 90% of the video views come from PUGV (Professional User Generated Video). This year there are 20 million users watching educational videos on Bilibili. Each month 1000 pieces of original music are created here. You can find everything on Bilibili.


THE MOST TOLERANT, STRICT AND LOYAL COMMUNITY


While other platforms are rushing to commercialize (Xiaohongshu, Douyin etc.), Bilibili is still trying maintain its healthy and friendly community. Unlike on other video platforms (iQIYI, Tencent video), you don’t need to watch any ads here before the video starts, or be a paid VIP to watch certain videos. This benefits the community. The user stickiness on Bilibili is much higher than other platforms - averagely each user spent 83 mins every day on Bilibili. The relationship between content creators and their followers is much closer - you can see much more real engagements under each video.


We can describe Bilibili’s community in three words: the most tolerant, strict and loyal.


The most tolerant:


Bilibili never require the productions to be expensive or fancy. The videos with no celebrities, no big IP and low cost are also welcomed by audience. Bilibili allows all kinds of content - no matter it’s PUGC, a well-edited movie, or a TV drama. As long as the content is creative, legal and authentic, users will support them.


The most strict:


Content creators must produce authentic and healthy content. Users are so strict that they can’t accept content with no conscience.


The most loyal:


This is based on the first two points. As long as users can see sincere and creative content, they are more than willing to share with friends or pay for it.


As a result, the relationship among the platform, content producers and the audiences are very healthy. You may not see much fake traffic/engagements here. The number of followers may not be as big as on Weibo, but the quality is 10 times better. Users call Bilibili “a pure sacred land”.



HOW DOES BILIBILI PLAN TO COMMERCIALIZE?


According to Bilibili’s financial report in Q3 2019, the average monthly paying users (MPUs) reached 7.9 million, a 124% increase from last year. Total net revenues reached RMB1.859 billion (US$260.1 million), a 72% increase from last year. Revenues from mobile games are down to 50%, compared to 80% when Bilibili went public last year. Revenues from other channels like live streaming, advertising, e-commerce have been increasing fast (167%, 80%, and 703% respectively). This is a good sign. Bilibili are not only relying on games to earn revenue. Other channels are increasing fast.


In October, Bilibili announced their commercialization plan for the first time. In 2020, Bilibili will work with content producers on animation, documentary, shows and games, more open to PUGC and OGV (Occupationally Generated Video).


In terms of e-commerce, Bilibili has also been working to Taobao since last year, to help content producers to sell through videos. As of the end of October, the total GMV of 2019 has reached 1 billion RMB.


BILIBILI’S FUTURE


Gen Z is the future of China market. How to better serve them and monetize the content will be key. Currently Bilibili’s community may not be big enough to be ready for commercialization. They still have big potential to develop. But in the future when the cake is big enough, how will the platform manage and balance the commercialization and the content authenticity?


I believe the two big targets for Bilibili in 2020 will still be:


1). Increase the user number

2). Move forward on commercialization