Stop the tide, what happened to bilibili？
Chen Yongwei/Wen
Not long ago, when I was swiping (hereinafter referred to as bilibili), I accidentally swiped a video from an up owner who had paid attention to it (note: bilibili users called content creators) and announced that it would not be updated. Since last year, I have found that the quality of this up master’s creation has obviously decreased. Therefore, when I saw his announcement to stop the shift, I naturally thought that this was just the individual behavior of a Jiang Lang-exhausted up owner. However, after that, I got more and more news that the up owners stopped changing, and even some up owners with millions of fans issued a statement to stop changing. For example, "I am a Weird King" with 2.65 million fans, "King Xu who lives by his face" with 3.85 million fans, and even "-LKs-", which just won the title of "Top 100 UP Owners in bilibili in 2022" and has 3.11 million fans, have all announced that they will stop working in the near future. I just realized that the stoppage of the up owners seems to be not an individual event.
Sure enough, a few days later, a lot of media began to report on the stoppage in bilibili. This means that the "family affair" in bilibili has turned into a modest news event. Why did such a large-scale stop-watch tide break out in bilibili? Its sudden arrival reflects the problems of bilibili and even the whole video industry. What should bilibili do after this wave of suspension?
Why did the UP owners stop working?
We need to clarify some related facts before analyzing the causes of the tide stop. In many reports, the stop-watch tide has been described as a large-scale collective action of bilibili up owners. Some news, in particular, highlighted the news that the Head up Master had withdrawn from the station, and thus compared this stoppage with the contradiction between the Head up Master and bilibili. But in fact, the number of head ups is not much, and most of them are due to some accidental or personal reasons. For example, "-LKs-" responded after being praised as a hot search because of the shift stoppage incident, saying that "it only represents individuals to announce the shift stoppage, which has nothing to do with the economic situation, and the income in bilibili this year is no less than before". And "King Xu, who lives by his face" also said that "stopping by himself is more personal, and bilibili is just a publishing platform of his own, and it has nothing to do with bilibili. It is normal to make a profit or loss in content creation, so there is no need to make a fuss". However, due to the large number of main fans and loud voices, these head ups have become the focus in news reports.
In this stoppage, the protagonists who should really pay attention are actually those "waist" and "tail" up owners.
What caused this part of the up owners to stop working collectively? The main reason is that the income they can get in bilibili has dropped sharply recently, so their enthusiasm for creation has dropped sharply.
Generally speaking, the income of bilibili up owners is divided into creative incentives, advertising with goods, "charging" and so on. Among them, the income of creative incentives mainly comes from bilibili’s incentive plan aimed at encouraging original content; Advertising with goods mainly comes from the promotion of up-oriented brand products; "Charging" is equivalent to rewarding other websites, which mainly comes from the support of some die-hard fans for up owners. In addition, some up owners have signed contracts with bilibili officials, and they can receive certain salary subsidies from bilibili on a monthly basis.
From the perspective of composition, incentive plan and advertising are the most important income for most up owners. However, in recent days, there have been great difficulties in realizing these two incomes.
(1) the decline of incentive plan income
Bilibili Incentive Plan, whose full name is "bilibili Creative Incentive Plan". Friends who are familiar with the history of bilibili should know that in the early days, bilibili’s content source was mainly the creation of some up owners who didn’t expect anything in return. In their own words, it is "power generation with love". The quality of the content provided by these users is still very high, and it is also the main source of bilibili’s early attraction. However, this creative mode has a fatal weakness-the supply is very scarce. Therefore, when bilibili is expanding, this simple content supply model can hardly meet the needs. In order to quickly complete the transformation from an interest-based website to a mature video website, and fight our way out in the video market surrounded by strong enemies, bilibili must attract more up owners with richer backgrounds to join the ranks of content providers. Obviously, to do this, the necessary economic incentives are indispensable.
At the beginning of 2018, the incentive plan was officially launched. According to the plan, when the creative influence and credit rating of up owners reach a certain level, they can apply to join this incentive plan. After joining the program, when the user’s original works exceed a certain reading threshold, he can get some rewards from them.
In the official text, bilibili did not announce the exact calculation method of the reward amount, but vaguely said that it was calculated according to the multi-dimensional indexes such as user’s liking, content popularity and content verticality. However, according to the actual measurement of many up owners, the reward for every 1000 views in the early days was around 3 yuan. Judging from the market level at that time, this incentive amount was considerable. On bilibili, it’s not difficult for an up master with a certain fan base to watch tens of thousands of videos. If you add other income sources such as coin sharing and advertising, then the income that the up owner can get from a video creation is also good.
Encouraged by this income, more and more content creators have joined bilibili to become up owners, and many of them are full-time up owners who make a living by creating content for bilibili. Some up owners even set up studios to hire employees to create. Bilibili’s content ecology has become increasingly prosperous and popular. Of course, in this process, the creative motivation of up owners has gradually changed. Originally, the up master who mainly "generates electricity with love" has become a minority from the mainstream, which has also had a great influence on bilibili’s overall temperament.
For the majority of bilibili up owners, the initial period after the launch of creative incentives can be regarded as a wonderful time. But since last year, the situation has quietly changed. At first, some up owners vaguely felt that the creative incentives they could get from each video seemed to be reduced when the parameters such as playing and likes were similar. However, due to the relatively small decline, they didn’t pay too much attention to it, thinking that it was just the effect of "overcharging three to five fights" caused by the increase in content supply. In order to make up for the loss caused by the downward adjustment of creative incentives, many UP owners have also increased their creative efforts. Although the quality of these overtime videos is different from the original intensive works, on the whole, bilibili’s creative ecology has gone against the trend and ushered in a period of prosperity.
It was not until the second half of last year that the negative effects of the reduction of creative incentives began to gradually emerge. At that time, some up owners exclaimed that under the condition of close viewing and praise, the creative incentives they could get from a video had dropped to less than half of the original. No matter how much you refuel the video of "liver" (note: "liver" is a common network term used by users in bilibili, which means spending a lot of energy to do things), you can’t stop the sharp drop in income. As a result, there are two completely different choices among up owners: some up owners began to reduce their video creation, and even gradually faded out of bilibili; Others choose to increase their income through a large number of "water" videos (note: "water" is an abbreviation for "irrigation", which means adding meaningless content to their works to increase the number and length of their works). Obviously, no matter which choice is made, the content level in bilibili has dropped significantly.
By the beginning of this year, the creative incentive has dropped to less than 1/3 of the original, and many up owners who mainly rely on creative incentive as their income source have started to stop working. However, this silent protest did not change bilibili’s determination to continue to lower his creative incentives. Not long ago, bilibili officials sent a questionnaire to up owners, asking whether it is acceptable for up owners to change the existing cash incentives into flow support. Although nominally, this is only a consultation document, but in today’s environment, up owners immediately interpret the general trend that bilibili will gradually cancel the cash incentive. This means that if their fan base is not large enough to support commercial advertisements, it may become a voluntary labor to continue video creation in bilibili.
(2) the difficulty of advertising revenue
In addition to creative incentives, advertising (or "just a meal" in the language that bilibili users are more familiar with) is also an important source of income for bilibili up owners.
Although for the sake of maintaining the initial intention, bilibili has always rejected the patch advertisements commonly used in video websites, this does not mean that there are no advertisements in bilibili. In fact, as long as the up owners want, they can insert advertisements of various merchants in the advertising space provided by bilibili (usually below the video or above the comment area), or simply insert advertisements directly in their own videos. As for the channels for obtaining advertising, different up owners have different methods: for those up owners with high popularity and many fans, advertisers will mostly come to their doors; Upowners with low popularity and low fans can get advertisements through cooperation with MCN or directly through bilibili’s official "Fireworks Platform".
To be fair, for those up owners who have many fans, bilibili’s advertising revenue is very considerable. For example, in 2021, tech Planet had a report about the main advertising revenue of up in bilibili. According to this report, an advertisement of up owner "He Classmate" quoted 880,000 yuan, and an advertisement of "Half Buddha Immortal" quoted 590,000 yuan. Although this information has not been confirmed by the up owner himself, some industry experts believe that this figure should be closer to the real situation. For this part of up owners, advertising revenue is the bulk of their creative income, in contrast, the income brought by creative incentives is negligible. I once interviewed several up owners with millions of fans. According to their introduction, the proportion of creative incentives in their income composition is less than 10%, and the rest mainly comes from advertisements. Obviously, bilibili’s adjustment of creative incentives will not have any substantial impact on the income of these head up owners, which is why the head up owners did not participate much in this wave of stoppage.
However, for the "waist" and "tail" up owners, the situation is completely different. Because of their weak appeal, it is usually difficult to attract advertisers directly, so their advertising business is mainly obtained through intermediaries such as MCN or Huahuo platform. After receiving advertising revenue, they also need to share it with the intermediary. I once talked to an up owner with a fan base of around 100,000 about his advertising revenue. According to his own introduction, the advertisements introduced through the intermediary often do not accord with the tonality of his works. For example, he mainly makes food videos, but once the intermediary introduced him to a business of advertising women’s products. In terms of expenses, Party A is usually very stingy. In the list sent to him by the intermediary, a large part of the advertising fee is only a few hundred yuan. Considering that "just rotten rice" may affect the quality of his own video, the number of advertisements he really accepts is actually very small.
More importantly, after the epidemic, the performance of many enterprises suffered a huge impact. In order to reduce the cost, they reduced the amount of advertising investment. In order to improve the efficiency of advertising, these limited advertising funds are more invested in platforms with higher activity and easier realization, such as Tik Tok and Aauto Quicker, and the proportion invested in bilibili has dropped greatly. Most of the advertising funds invested in bilibili have flowed into the hands of those "head" up owners, which makes the opportunities for "waist" and "tail" up owners to get advertising business even less.
Why did bilibili cut incentives?
Since the drastic reduction of creative incentives will lead to a large loss of up owners, why does bilibili persist in implementing this measure to the end? The main answer, of course, is that bilibili itself is short of money. Friends who are familiar with bilibili should know that bilibili has been in a state of loss since its establishment. Especially in recent years, in order to meet the needs of business expansion, its expenditure has increased significantly, but its income has not kept up, so its loss has been expanding. Taking 2022 as an example, its operating income was 21.9 billion yuan, a year-on-year increase of 13%; But at the same time, its net loss was 7.5 billion yuan, an increase of 10.3% year-on-year. Under such a revenue situation, bilibili obviously has no strength to adhere to the high subsidy strategy for a long time.
According to the financial report, in 2022, the total expenditure on subsidizing up owners in bilibili reached 9.1 billion yuan, accounting for almost half of the total revenue in that year, which was 18% higher than the 7.7 billion in 2021. It should be said that this is quite sincere for a company that continues to lose money. However, due to the rapid growth of the up owners of the whole platform and the total content they created, the denominator grows faster than the numerator, and the amount of subsidies allocated to each up owner is less.
Of course, apart from bilibili’s real lack of money, there is a relatively minor reason that contributed to the reduction of creative incentives. This reason is bilibili’s attack on low-level creation, especially AI malicious creation.
People will respond to incentives. Specifically, if the main incentive for a creator to create works comes from economic interests, then his creative style will be influenced by the incentive structure. This is applicable in the era of paper media and also in the digital economy.
The launch of bilibili’s creative incentive plan has aroused the creative enthusiasm of a large number of up owners, but at the same time, some up owners have begun to ponder how to use the loopholes in the plan to increase their own income. For example, the broadcast completion rate is an important indicator for calculating creative incentives, but obviously, the broadcast completion rate of long videos cannot be compared with that of short videos, so many up owners give up their original efforts to make high-quality long videos and turn to short videos that are more eye-catching. What’s more, after the upsurge of generative AI, AI tools began to be used to rapidly generate a large number of works. Although the quality of these works is low, and the individual viewing volume is not high, they can get more viewing together. If similar phenomena are allowed to continue, the ecology of bilibili will be greatly damaged. Therefore, some managers in bilibili began to consider reducing creative incentives to curb these behaviors. But obviously, they should not take into account the possible side effects of this policy, which has caused accidental injuries to many hard-working up owners.
The deep-seated reason behind stopping the shift
Whether it is lack of money or cleaning up the creative ecology, it is still a relatively superficial reason; From a deeper point of view, bilibili’s current business difficulties and the outbreak of the stoppage tide are actually inseparable from the platform’s own defects in business model and positioning.
When it comes to the business model, many people will wonder if there is something wrong with bilibili’s development strategy of focusing on long videos. Indeed, compared with long videos, short videos can make viewers get pleasure in a shorter time, so they are more likely to be favored by viewers. In terms of production cost, short videos are usually much lower than long videos. Therefore, compared with the long video platform, the short video platform is not only easier to attract users, but also easier to attract creators. In the past few years, we have witnessed the rise of many short video platforms such as Tik Tok and Aauto Quicker, while at the same time, long video platforms such as iQiyi, Youku and Tencent Video are relatively declining.
Objectively speaking, if we only compare with the long video platform, then bilibili performs quite well in terms of user growth, user stickiness and other parameters. In addition, due to the pursuit and support of many young users, bilibili’s exposure in the public opinion field has been higher than these traditional long video platforms in recent years. From time to time, bilibili can also report a hot spot like "Houlang" and "My Uncle" to grab the headlines.
What is puzzling is that although the momentum of bilibili seems to have been overshadowed by these long-established video platforms, from the profit results, it is a completely different story. In fact, despite the sluggish market segment of Long Video, both iQiyi and Tencent Video have achieved profitability against the trend, and the loss of Youku Video has also been greatly narrowed.
If we expand our eyes to the whole world, there will be more related questions. Although it seems to have become a consensus that it is difficult to make money for long videos today, in fact, those excellent long video platforms can still make a lot of money. For example, in 2021, Youtube’s advertising revenue reached $28.84 billion; In 2022, its advertising revenue further increased to $29.24 billion. In contrast, the advertising revenue of Tiktok, which is in the limelight, is only about $12 billion in 2022.
Thus, it is not that the long video platform can’t make money, but that bilibili really didn’t find the right way to make money.
So, compared with domestic and foreign counterparts, where are the problems in bilibili? Before answering this question, let’s take a look at the usual income composition of long video websites. Generally speaking, the revenue sources of long video websites mainly include advertisements, subscription services and other value-added services. Of course, due to the different business strategies of each platform, their proportions in these businesses are different. For example, advertising accounts for the most important part of Youtube’s revenue. However, due to the huge impact of short videos on domestic long video platforms, the proportion of advertising revenue has dropped a lot in recent years, and membership service revenue has become the most important part of revenue. Take iQiyi as an example. In 2022, its advertising revenue was 5.3 billion RMB, which was 25% lower than that in 2021. However, in the same period, its membership service income reached 17.7 billion yuan, an increase of 6% over 2021. This is the main reason why Iqiyi can make a profit in the case of a sharp drop in advertising revenue.
So what is the income structure of bilibili?
Look at the advertising revenue first. It should be said that compared with domestic platforms such as iQiyi, bilibili’s advertising revenue in 2022 is still good, and the financial report shows that the revenue of this piece has reached 5.07 billion. This is not only the same as the advertising revenue of iQiyi in terms of scale, but also increased by 12% year-on-year. However, if we consider that bilibili’s rising momentum in recent years is higher than that of established platforms, and its indicators in terms of user stickiness are better, then the advertising scale is still difficult to match its operating conditions. In addition, considering the short video squeeze and other factors, it will be difficult to maintain growth or maintain the existing level in the future.
Look at the membership income. In bilibili’s financial report, this item is not listed separately, but merged into "value-added services". However, according to the number of big members announced by it, this scale should be around 3 billion yuan. Obviously, this figure is far below the level of iQiyi. That is to say, although bilibili has a large number of users, their willingness to pay for bilibili is very low.
Besides, unlike other long video platforms, bilibili has a very high proportion in other businesses. For example, the revenue of "mobile games" listed in the financial report reached 5.02 billion yuan in 2022, and "e-commerce and other businesses" reached 3.1 billion yuan. In addition, as a part of "value-added services", live broadcast revenue has also contributed a lot to bilibili.
Fundamentally speaking, the difference in income composition is determined by the history of bilibili. As we know, bilibili was born out of an anime fan website at the earliest, so from the genetic point of view, it is not so much a video website at the beginning as an online community composed of young people, and its nature is more similar to that of Zhihu and Douban. Young people are very active, do not like to be bound, and reject commercialized things. These idealized characteristics have affected the subsequent development of bilibili.
For example, patch advertising is a very effective form of advertising, and practices including Youtube have proved that this kind of advertising can bring very rich income. However, members of bilibili, as well as the management of bilibili, have always rejected this form of advertising, and even rejected all advertisements for a period of time. Although bilibili had to introduce advertisements for the sake of development, it was still opposed by many users. Especially those users who are accustomed to no commercial atmosphere will give bad reviews or directly brush the barrage to vomit after seeing an up owner add advertisements to the video. Obviously, this naive mood limits the possibility of bilibili to realize income through advertising.
Similarly, since bilibili paid attention to free sharing in its early days, most users were not used to paying to watch programs. The formation of this habit has restricted bilibili from seeking income through membership service. In addition, young people’s purchasing power is low, so the income from membership services is also difficult to rise.
Bilibili has to try to open up some other income channels. In fact, the game was originally a very good source of income, but influenced by policy factors, this variable is very large. In fact, in 2022, this piece of income even showed a certain decline. What about live broadcast and e-commerce? Although marginal, they did bring more income to bilibili in the short term, in the long run, paying attention to them may lead to the homogenization of bilibili and some short video platforms, thus making it lose its personality.
From the above analysis, we can see that bilibili is actually in a very embarrassing situation. If it wants to develop, it needs to be commercialized. However, due to the restriction of its own genes, many commercialization methods are bound, so it is difficult for its income to increase. If the income does not go up, the subsidies that can be given to members will not go up. If the number of users continues to increase, the income of each UP owner will continue to decline, and a considerable part of it will be broken.
Where does bilibili go from here?
How should bilibili in the future get rid of this embarrassing situation? In my opinion, the most important thing is to figure out what you really want to do.
If bilibili’s idea is to continue to be a community for young people, it may be better to give up subsidies and return to the past, and then introduce some more community-based business methods. After the subsidy disappears, a large number of up owners may leave, but those who are really willing to generate electricity for love will stay. In this way, bilibili can break even and exist as a spiritual home for young people.
And if bilibili’s goal is to continue to go out and become a comprehensive video platform, then it may have to do a little more. The urgent task is to tear off the shackles of our past, strive to adjust the composition of users and actively introduce more commercial means that have been proved to be effective.
For bilibili, this may be a very difficult choice.