Shulou(Shulou.com)11/24 Report--

On May 18, Beijing time, Douyu released his unaudited financial report for the first quarter of 2023.

According to the financial report, Douyu's total revenue in the first quarter was 1.483 billion yuan, with a gross profit of 177 million yuan, corresponding to a gross profit margin of 11.9%. Under the American general accounting standards, the net profit was 14.5 million yuan; under the non-American general accounting standards, the net profit was 25.8 million yuan, turning losses into profits in an all-round way.

The biggest focus of this financial report naturally falls on "all-round profits". Compared with the last financial quarter, Douyu's net profit has actually improved considerably compared with the same period last year, and the gross profit margin has also risen. It's more like a process, documenting the secret of a company's ability to move forward in the face of uncertainty.

If this secret is summed up, it can be refined into four words: return to content.

The content experience of the game e-sports continues to upgrade. Douyu's content-driven growth is undeniable. As a content platform that started from the game live broadcast, Douyu has natural game genes, while the basic attributes of the Internet live broadcast platform. Douyu is also constantly required to serve users and occupy the market through its own technical and content advantages.

In the first quarter, Douyu was able to turn losses into profits in an all-round way, precisely because they continued to invest in the ecological construction of game content in the past. For example, in the past quarter, Douyu insisted on taking the content as the core, constantly strengthening the game attributes of the Douyu platform, and providing users with more high-quality and diversified content services.

In a word, the experience of the game and e-sports users on the Douyu platform has been greatly improved.

For example, in the first quarter, based on the comprehensive consideration of copyright influence and user demand, Douyu resumed the purchase of the copyright of League of Legends LPL, S match and other core events, enriching the core e-sports content reserve. For example, resuming the purchase of the copyright of League of Legends LPL has aroused a collective carnival of anchors, contestants and e-sports enthusiasts.

According to the introduction, this quarter, Douyu broadcast more than 20 official large-scale events, including League of Legends Professional League (hereinafter referred to as LPL) spring match, Arena of Valor Professional League (hereinafter referred to as KPL) spring match, Game for Peace Professional League (hereinafter referred to as PEL) spring match and so on, meeting the needs of the vast number of game e-sports audience.

In addition, in order to bring users a more innovative event content experience, Douyu also made full use of his rich experience in copyright event operation by adding exclusive game-watching functions such as pure event live room and team card collection for LPL. The LPL trump card derivative program "how to say this" and "Fanlai" also came back at the same time, and the second-way live broadcast of the game brought by 12 anchors, including Doinb, Guan Zeyuan, Miller, Jingong, Ruofeng, and smile, was warmly pursued by League of Legends players.

According to incomplete statistics, during the LPL spring competition, the daily average DAU of Douyu's second way studio is nearly 4 times that of the 2021 betta live League of Legends spring competition, and the viewing time has also increased by 200% as a whole.

In addition, for KPL events, Douyu added a multi-screen viewing feature in the live broadcast room from the first view, which can be unlocked synchronously when users send on-screen comments; the live room display is optimized, bringing users a purer game-watching experience, thus further increasing the activity and user stickiness of Arena of Valor zone.

Compared with last year's KPL spring match, the number of user viewing hours increased by more than 50%, the number of spectators increased by 27%, and the number of on-screen comments increased by 51%.

In addition to the popular copyrighted content itself, high-quality anchors are also important resources to attract users.

And Douyu has always had a very luxurious anchorman. They have accumulated a lot of professional and high-quality LOL anchors in their content operations over the years, such as the official commentary lineup, which includes the combination of Doll and Miller's "Haier Brothers", Guan Zeyuan and Yu Shuang's "husband and wife" and so on, as well as the OB lineup of professional players such as Doinb, Jin Gong, smile, Ruofeng, xinyi, strawberries, Curly and so on. Not to mention the influence and appeal of phenomenal anchors such as PDD and Da Sima in the whole network.

At the same time, Douyu has also been actively training new anchors in the past quarter. For example, Douyu and Arena of Valor are encouraged by rich resources inside and outside the station to train technical anchors. The top 10 ranking rate of Douyu anchors in the Q1 season is more than 80%. Two new star anchors, Lu Xiaoming and Xiao Xiaoe, occupy the first and second place in the national top list, and the content influence and talent reserve of Douyu game e-sports have been further expanded.

The above efforts, so that Douyu in the game e-sports this content of the basic disk of the user experience has a comprehensive upgrade, which is the basis for keeping users on the platform. According to the financial report, this quarter Douyu mobile MAU is 50.2 million, paying users 4.5 million, the core quality users remain stable and some return, this is Douyu's best return for strengthening the game content experience construction.

Reducing cost and increasing efficiency and pragmatic operation is still the main tone of constant flow dividend peaking, and the industry tends to a cold winter, which is the new normal that all Internet enterprises need to face at present, and it is also the same for Douyu. Reducing cost and increasing efficiency is a strategy that enterprises need to adhere to continuously at the operational level, and it is also the most direct way for Douyu to achieve overall profits.

For the content platform, the high cost of content copyright is a major expense in the cost. Blind and extensive copyright purchase is not only a drag on corporate finance, but also has a limited effect on the promotion of business. Douyu abandoned the strategy of blindly buying copyright in his early years and changed to "selective purchase of copyright", that is, "fully evaluate the flow and realizable value of the copyright of each event, and finally determine whether to buy the copyright and the purchase price."

After giving up some of the copyrighted content with a low input-output ratio, Douyu turned to building a more efficient brand of homemade content. In the first quarter, Douyu launched nearly 80 self-made e-sports races, including Douyu Qunying Cup S2 (TOC Douyu pre-selected track), 2023 Douyu Game for Peace Autumn Mingshan Cup S1 (Game for Peace National Competition cooperation track), forever robbery "come on!" Female martial arts god "S2, CSGO" aim! "Goddess" S3 and other events, covering the official cooperative events, anchor IP events and public events, together with the official copyright events to form a diversified content system of Douyu.

In addition to the content of the competition, Douyu PGC self-made content broke the circle one after another this quarter, and the content production ability continued to improve.

In March, Douyu's annual award ceremony for the 9th anniversary of the Fish Music Festival landed in Wuhan. Dou Yu Li invited Chen Xiaochun, good Morning (D.M.G), Round 20-20, and AKB48TeamSH to join hands with popular anchors of Northeast Big Quail, An er Ayer, Shuai Bao Serena, Yao Shunyu and Minana to create a network-wide carnival in which thousands of anchors and water friends participated.

In addition, more than 10 homemade PGC variety shows such as "Tavern do not close", "Fire Phoenix", "fake", "XIN Jump player" and "Game of the Brave" were also launched one after another in that quarter. Douyu actively explores new revenue models with more diverse interactive content through the integration of anchors, manufacturers and platform resources.

In short, the rational evaluation of the purchase of copyright content, as well as the strengthening of the level of self-made content and operational refinement, not only help to reduce costs, but also greatly improve operational efficiency. Content that is better and more in line with its core competitiveness often means a higher rate of return on investment.

On the basis of cutting expenditure, Douyu has further achieved open source, striving to achieve a more diversified income system and seeking new growth points.

In the first quarter, Douyu's advertising and other income reached 114 million yuan, an increase of 66.6% over last year's 68.4 million yuan. This is precisely the effect brought about by Douyu's active upgrading of interactive play, exploring the paid ecology of diversified platforms and the growth of member income.

For example, the membership size of Douyu diamond powder has achieved steady growth in the first quarter. Through iterating membership functions and upgrading members' rights and interests, core users' willingness to pay has been significantly improved, and platform membership renewal rates have maintained steady growth for many quarters.

At the same time, Douyu is also working more closely with game manufacturers to explore richer commercial models. According to users' habits and consumption characteristics, they have launched personalized membership services for different game products, which not only meet the needs of game users for props in the game, but also further expand healthy and diversified revenue channels.

In the first quarter, League of Legends mobile game props store launched props such as limited skin, platform exclusive rare "Home Guardian" and platform side cooperation treasure box "Niu Qi Tian Xuan Bo Bao Box". During the event, more than 27% of users paid for the platform for the first time.

In addition, in terms of improving community activity, Douyu launched a series of innovative user interactive games in the first quarter. During the Spring Festival, the platform joined Arena of Valor to launch the customized voice package of Gemini Spring Festival games in the game, which received high user attention, and the number of new users on the studio platform increased by more than 120% month-on-month. The brand-new content display form and interactive scene further strengthen the companionship attribute and user stickiness of the platform.

Conclusion after handing over a fully profitable financial report, Chen Shaojie, founder and CEO of Douyu, said: "in the future, we will continue to take boutique game content and user interaction as the driving force, attach importance to improving user quality, and continue to promote the construction of a healthy and sustainable game community ecology. While consolidating the company's comprehensive competitiveness and leading position in the domestic game live broadcast industry, we will continue to explore new growth points."

As a leader in the domestic game live broadcast industry, Douyu is also the leader in seeking breakthroughs and innovation in the second half of the development of the Internet content industry. In fact, the positive and beneficial adjustment strategies and the concept of pursuing long-term doctrine made by them in the face of industry uncertainty and their own growth bottlenecks can also be a good example for most Internet companies to get out of the predicament.

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