What do you think about the "common prosperity" that Bilibili is about to give to UP masters?

B station’s incentive plan has been adjusted. This article tells how B station’s up users can get a piece of the “cake”. Let’s read the article to find out.

After releasing its 2023 financial report, Bilibili subsequently released an annual plan to incentivize video creation, attempting to respond to outside doubts about the content incentive ecosystem on its platform by allowing UP hosts to achieve "common prosperity."

Specifically, according to the annual video creation incentive plan (2024 edition) released on March 18, Bilibili will determine whether the UP host is entitled to basic incentives for that month based on the UP host's income level in the past six months at the beginning of each month. The basic incentive is calculated comprehensively based on content quality, user interaction, update frequency, etc.

In addition, new diversified monthly activity incentives have been added. Every month, the platform will invite some UP hosts whose commercialization is not yet mature to participate in the activities, and give rewards based on the viewing time of the articles participating in the activities, fan interaction and other data. At the same time, in order to allow more UP hosts to have the opportunity to enjoy basic incentives, the basic video incentive will set a monthly income cap.

Excerpt from the B-station video creation incentive annual plan (2024 edition)

The new incentive plan will be implemented from April 1st.

The key points of the Q&A details given by Station B are summarized as follows:

1. First, the platform will determine whether the UP host is eligible for basic incentives at the beginning of each month based on the UP host's income level in the past six months. The basic incentives will be comprehensively assessed based on multiple factors such as content quality, user interaction and update frequency. UP hosts with an average monthly income of more than 5,000 yuan will be directly excluded.
2. Second, in order to make more UP hosts eligible for incentive income, a monthly incentive cap of 2,000 yuan will be set.
3. Third, a variety of monthly activity incentives have been added. Every month, the platform will invite some UP hosts whose monthly income is less than 20,000 yuan in the past six months to participate in the activities, and give them rewards based on their viewing time of the content related to the activities and fan interaction data.

Overall, the focus of this annual plan for video creation incentives is undoubtedly to tilt the platform's incentive resources toward small and medium-sized UP hosts, so as to take care of those small and medium-sized creators who are not fully commercialized.

Overall, Bilibili is still trying to ease the conflict between the platform and content creators by continuously optimizing the "cake-dividing method". It has transitioned from the past overall adjustment of the incentive ratio that caused all UP hosts to face income problems, to an annual plan that clearly tells the top UP hosts that they need to be self-sufficient. Platform resources will be more inclined towards small and medium-sized UP hosts.

On the other side of the scale, Bilibili still has to face the fact that the top UP hosts on the site are not making a lot of money, and many of them are the main members of the "stop updating trend" last year. Now the new incentive rules have been introduced, which means that starting from next month, the top UP hosts will most likely receive less traffic incentives from the platform, and will need to rely more on themselves to obtain additional commercial realization opportunities.

Perhaps, the recent announcement by Muyu Shuixin, a top UP host on Bilibili who has tens of millions of followers, that she would start creating paid videos is also a signal to prepare for changes in advance.

To a certain extent, Bilibili’s original intention of “common prosperity” may be good, but instead of constantly “dividing the cake” in various ways, it is better to honestly consider how to make the cake bigger. Since the hope for the future is placed on advertising, there is no need to continue to be shy about “patch ads”.

1. Can the growth rate of commercialization be achieved through live streaming?

Starting from 2023, Bilibili, like other domestic Internet companies, will focus on pursuing high-quality growth, and achieving profitability as soon as possible will become its core goal.

At the same time, although the mobile gaming business, once a star business, has performed poorly due to factors such as a decrease in new game launches and a decrease in current game revenue, in the past year, Bilibili has still seen steady growth in its live streaming and advertising businesses, and has emerged as a more powerful new growth engine.

In 2023, its advertising business became the fastest growing sector with a growth rate of 27%, with revenue reaching 6.4 billion yuan. The revenue of value-added service business was 9.9 billion yuan, a year-on-year increase of 14%. Therefore, in the 2023 financial report, the market continued to see the narrowing of Bilibili's losses. During the reporting period, Bilibili's operating loss was 5.1 billion yuan, a year-on-year narrowing of 39%, and its net loss was 4.8 billion yuan, a year-on-year narrowing of 36%.

B Station 2023 Financial Report

In addition, the reduction in Bilibili’s losses over the past year is also closely related to the adjustment of the incentives for UP hosts.

The revenue sharing cost of Bilibili's operating costs in 2023 will be 9.5 billion yuan, and the year-on-year growth rate will decline to 4%.

In the past few years, this figure has basically shown double-digit growth. In 2021, Bilibili's revenue sharing cost was 7.7 billion yuan, a year-on-year increase of 77%, and in 2022 it was 9.1 billion yuan, a year-on-year increase of 18%.

Revenue sharing mainly includes the incentives and revenue sharing that B station gives to UP masters in the live broadcast and advertising business. Although the growth rate is decreasing, B station is still investing in this area. At the same time, according to the financial report, the number of video submissions to B station is still growing. Compared with the average monthly video submission of 21 million in the third quarter, the average monthly video submission of B station exceeded 23 million in the fourth quarter of last year.

The supply of content is growing, but there has been no significant increase in investment in revenue sharing, which means that for the UP hosts who are the core content source of Bilibili, the pressure of survival and competition is increasing.

Chen Rui, chairman of Bilibili, once pointed out that improving commercialization efficiency is one of Bilibili's most important tasks at present. In his opinion, promoting DAU growth is an important cornerstone of commercialization. DAU can better demonstrate the activity of Bilibili users and the commercialization potential brought by the number of Bilibili users.

B Station 2023 Financial Report

In the third quarter of last year, Bilibili's DAU officially exceeded the 100 million mark, reaching 102.8 million, a year-on-year increase of 14%. In the fourth quarter, DAU dropped to 100.1 million. Although the decline was not large, it also showed that Bilibili's DAU has gradually stabilized.

Obviously, it is difficult to effectively improve the commercialization of Bilibili, both in terms of efficiency and growth rate, as the number of users has reached the ceiling. The only thing it can do is to increase the means of monetizing its core business.

Is live streaming the way out?

In 2022, Bilibili began to explore live streaming sales, and launched functions such as the small yellow cart in the live streaming room and the UP host selection square. Encouraging more and more top UP hosts to enter live streaming sales seems to be one of the solutions for how to increase the income of top anchors after the release of Bilibili's new incentive policy.

According to media reports, the GMV of goods sold by merchants on Bilibili in 2023 increased by 260% year-on-year. In the fiercely competitive live streaming e-commerce industry, Bilibili still has a lot of potential to be tapped. At the same time, Bilibili gave birth to an UP host whose cumulative transaction volume exceeded 1.68 billion in 2023. These news are undoubtedly encouraging more top UP hosts to enter the live streaming room.

Screenshot of Station B

However, to develop live streaming sales, Bilibili still needs to focus on solving the e-commerce closed loop problem.

At present, when all content platforms are pursuing closed-loop e-commerce, Bilibili has adopted a "big open-loop" strategy, "marrying" e-commerce platforms such as Taobao, Tmall, and JD.com to divert traffic to it, which is quite similar to the early stages of Douyin and Kuaishou's e-commerce construction. In fact, this is more of a helplessness in the context of having neither payment nor logistics and other corresponding supporting facilities. Bilibili's live streaming sales are more about obtaining traffic stratification from other e-commerce platforms.

This is a problem that B station must solve in developing live streaming sales. After all, UP hosts work hard to sell goods through live streaming and they certainly don’t want more platforms to share the profits. Therefore, there are also 100 UP hosts like Film and Television Hurricane, which have been live streaming sales on Douyin recently. After all, in the eyes of traffic bloggers, where the live streaming e-commerce infrastructure is more stable is also a selection factor that cannot be ignored.

2. Let’s go further with YouTube

If it still takes some time for Bilibili to build up the infrastructure for live e-commerce, then what methods should Bilibili use now to make the pie bigger for more UP hosts to share and generate obvious profits?

For Bilibili, the most effective commercialization method at present may be further "YouTube-ization", the core of which is to provide the possibility of advertising display as much as possible.

In order to achieve a closed-loop model like YouTube where both the platform and content creators can survive on advertising revenue, Bilibili first needs to diversify its advertising products, providing a variety of forms including patch ads, banner ads, and video interstitial ads to meet the diverse needs of different advertisers.

YouTube pre-roll ads

Secondly, Bilibili should strengthen the research and development of advertising algorithms and optimize the advertising delivery system to ensure that advertisements can accurately reach the target audience, thereby improving advertising effectiveness and advertiser satisfaction. At the same time, it should allow the advertising sales team to be more proactive in contacting advertisers and create more advertising content that suits the brand and platform tone.

Finally, providing transparent advertising data and detailed performance reports is crucial to building advertiser trust, so Bilibili needs to develop more comprehensive data analysis tools to allow advertisers to clearly understand the performance and effectiveness of their advertising. If these points are achieved as soon as possible, Bilibili may be able to gradually improve the attractiveness and efficiency of its advertising business and move towards a business model based on advertising revenue.

Fortunately, although Bilibili has not completely given up some of its past "promises" and "faces", the continuous establishment and improvement of the Fireworks system in terms of advertising precision and advertising data is gradually allowing brands to see more possibilities for UP hosts and commercialization within the site. On the basis of the existing Fireworks system, how to further technicalize and make marketing more effective is also the key to whether Bilibili's commercialization can accelerate.

B station UP main content implantation brand

After the exploration of business models such as "Little Tencent" and "Little iQiyi" failed, and the excitement of mid-length videos died down, now that all commercial companies have to return to their core business and focus on profitability, this is probably the best opportunity for Bilibili to re-try the "Chinese YouTube" model. After all, this was originally people's expectation for Bilibili, and now it is time to fulfill it.

Author: Great Entertainment

WeChat public account: Yiyuguancha (ID: lanhaiyingxiao)