Bilibili Stock Forecast : Monetizing China’s Communities : Bilibili Could Go Beyond Youtube?
Bilibili Stock Forecast : Monetizing China’s Communities : Bilibili Could Go Beyond Youtube? : A wave of veteran Youtubers have announced their plans to quit the platform recently.
A common component of their complaint is that Youtube has made their videos less original.
One YouTuber complained that “we make videos not for ourselves but rather for the algorithm”. Another complained about Youtube’s diminishing return for original content creators, mandating more control over their materials on the grounds of an inefficient scrutiny system over copyright and freedom of speech.
Youtube has turned streaming videos into an attention-grabber. Because of its diverse set of users, Youtube does not actively incentivize its content producers to generate high-quality videos but capitalize on view counts.
While seemingly fair in the open market ideal, this model results in tremendous disparity among content creators: those who have built the first-hand advantage by setting their channels early would continue to thrive based on the ex-ante accumulation of viewers, while the later-comers would face the barrier to entry due to a greater cost to build the base. Complicating the disparity even more, Youtube’s stringent policy on upload frequency limits as well as viewer-drop punishment potentially makes the platform a jungle in which every plant is formed at its behest.
But ironically, that was precisely why Youtube was such a success. Relying on google’s unmatchable algorithm, Youtube pairs the audience with materials so that the most watched and the longest watched get rewards. They also mark the audience’s ad preferences and, through dynamic models, predict what kinds of ads are effective to groups of audiences.
While Youtube remains the most used, profitable video-sharing and streaming platform, it has exposed vulnerabilities in the emerging competitors. The rise of Tik-Tok captured the residual market of short videos. Its vulnerability is mainly due to its outdated monetization model: a rather archaic combo of advertisement and subscription. The algorithm is the strongest, but it’s not taken into full use.
Youtube has recently attempted to diversify its sources of income by adding more derivatives to the products it served, setting premium accounts, and so on. It can learn from a firm that started with a much less assumed background: Bilibili from China.
Started as an ACG ACPR platform in 2009, it quickly attracted the Gen-Z audience for high-quality free offerings of Japanese Anime, before transforming into a User Generated Content model which allows users to upload original videos in addition to the platform-acquired content.
The introduction of UGC signaled a transformation of the firm’s approach to monetization– from content-based to user-based. They improved the feedback mechanism and were able to drive direct, frequent conversations with successful content creators as well as the less-attentive viewers.
Following a plethora of product development, their core was to follow wherever the Gen-Z’s interest lies as long as those interests allow them to stay on the platform for long hours and connect with their peers outside the platform. Video Games? Bilibili currently delegates 37 mobile games, charging members very little for each play. The result?
A burgeoning game review content creators and better margins of derivative products (such as garage kits, cards, and premium access purchase). Live Streaming? They provided 0 channel rent for young influencers until they reached 100,000 members.
What about studying?
Bilibili partners with famous universities, research institutes, and government agencies to open “positive public externality” channels, allowing viewers to complete a university curriculum without spending a single day on campus. A typical high school student in the city might be able to spend the entire day on Bilibili– first studying English for 2 hours, then playing games with friends to relax for another, before turning to live streaming lip sync.
After lunch, they compete with peers on whose live comment gets the most copies and take a tutorial to produce their own videos for the “tech-nerd” subcategory. In the evening, they might turn to the bilibili-purchased documentary on Geology before joining the night live party in person in a local stadium.
Take a minute to process their behavior on Bilibili– Bilibili didn’t dictate what service they should take because they didn’t have to. It simply provided different services to form distinctive communities and then squeezed the margins out of the derivative products. The sustainable, loyal community itself is an asset.
The success of Bilibili would be rather bizarre from Youtube’s point of view. On one hand, most videos are streamed without any ads– that is, the audience can stream videos for hours without being stopped, a service that only premium uses could enjoy on Youtube. Of course, we may argue that this is just broadening base user, network analysis in the predatory pricing model, but Bilibili has figured out a way to monetize other than ads.
The socioeconomic background of the Chinese growing Gen-Z population and their ever-higher purchasing power gave Bilibili ample opportunity to promote their brands and profits through organizing offline activities, mobile games (and associated in-game spend), a cut of livestreaming “tips”, premium memberships (subscription), advertising, and e-commerce. It organizes offline events that attract more than 10 mil audiences to attend virtually during the pandemic.
Even so, knowing their consumer base detests ads, Bilibili exercises utmost caution in inserting any form of interruptive advertising in any videos. It pledges to the content creators that their commissions have nothing to do with ads, and confirms that only Bilibili-purchased contents would potentially have ads.
Bilibili currently outperforms Youtube in capturing and maintaining a dedicated base of loyal audiences and creators in evolving “niche communities”. It prevents malicious members from entering the community by creating a “membership access exam” system that not only tests your cultural fit with the existing community but also captures your interest categories by tagging the answers you provide.
It provides a better video categorization system, so that audiences of particular Anime or not interest may stay on one category of the channel for a very long time. To make sure its lectures are educational, it rewards members with CFA certificates to produce videos about finance.
Its unique “live commenting” 弹幕 option allows the audience to engage with each other while watching the video, a much more collaborative and horizontal structure than Youtube’s comment section. [You’ll stay on a platform where you feel you’ve left/ contributed something– even if it’s a live comment. The participatory design of the website makes the audience feel more involved in the platform-building process, thus becoming more faithful to its mission. In comparison, Youtube operates on a watch-and-go model: if I just watch, I have little loyalty to any specific channel.
If the interesting content is found elsewhere, I would hop off Youtube without hesitation.] This option diminishes the distance between the content creators and the audience, providing much flexibility for a person to transition from an audience to a creator.
In terms of monetization, the live commenting may be turned into a form of social currency. It expands the network, too– the meme generating power of channels are connected together, thus promoting the audiences to view cross-categorical videos.
Bilibili even hosts several workshops on video production for new members so as to incentivize them to stick to the channel, providing greater access for anyone to become influential members within a year. Acknowledging that its algorithm might not be as strong as youtube’s, Bilibili invests more into community-building and expansion projects.
Besides, relatively loose copyright management (allowing more derivatives of popular videos) and a rather decentralized platform (giving content creators more agency to edit or propagate) make the platform “thrive” on its own. By building a positive social image, Bilibili has legitimized the many Gen-Z behaviors to their parents and teachers, therefore creating more space for new niche-communities to be created. It has also sought to represent the Gen-Z generation to the world, acting as the strongest ally of its user base on progressive social issues. When we picture Chinese Gen-Z, we think of Bilibili.
Decentralization will be the trend for UGC platforms in the future. By decentralization, I mean that the right of choosing content/products should be handed back to the content viewers instead of being driven through algorithms.
Try integrating the monetization system with LBRY, a soon-to-be major challenger to a centralized video platform. Utilizing blockchain technology, it decentralizes the content creation process, demonetized the process with ads, and does not use an algorithm to dominate the content of videos. The “content freedom community” initiated its push-pull effects.
Many famous YouTubers have had back-up accounts on this platform because they are sick and tired of how Youtube restricts how their videos can be shared, downloaded, or consumed.
Bilibili Stock Forecast
Youtube doesn’t care about who content producers are as long as they produce something that generates attention — I mean, content producers get a lot of money, but ultimately, they don’t quite have control abt how their videos get distributed in the information ecology. That’s why LBRY brands itself as a “community-focused” and “decentralized” platform– rebelling against Big Brother, isn’t it?
As the member base continues to grow rapidly, it would be even more costly for the platform to identify and cultivate trends on its own. Instead, the platform would profit more from cultivating a supportive ecosystem, using superior algorithms and interfaces to link the consumption, production, and derivatives of the content, and letting the flowers bloom at their own pace.
Bilibili seems to be like an internet company, but it is actually heavy-asset-based. I think platforms in the future will use algorithms to not only get ads but also attract communities.
Of course, there is a long way to go for Bilibili. As it expands in the user base, there will be a critical balance between diluting contents or sticking to community building. A good algorithm will enable both.
From Tiktok to Livehouse, we understand people care more about who they stay with than what they actually watch. This is turned by Gen-Z’s unique network sensitivity. The focus on “community” is a euphemism for capturing a sticky group of consumers whose purchasing power matches the content TensorFlow.
Of course, actively managing the user base requires Bilibili to invest more in proactive content regulation, including directing more resources to accommodate the diversified need of its content base. Will Bilibili suffer from double marginalization when it partners with more video gaming and live streaming apps?
With high transaction costs and a sticky consumer base, would its investment in growing the community backfire? Content saturation, higher barriers to entry are both risks behind Bilibili’s optimism. While Bilibili certainly has the capability to make itself the next Youtube of China (the former Youtubes of China being Youku, which has already fallen back on the race), it doesn’t have to make itself a “too-big-to-fail” monopoly.
People are a perpetual asset. Games today, Livestream tomorrow. Who knows? Bilibili has turned itself into a meme, an internet sensation. It is more than a platform in China. Bilibili symbolizes the entire generation. Its monetization model is driven by community building. That is where the future points.
Written by Haoran Tong
Edited by Alexander Fleiss
Bilibili Stock Forecast : Monetizing China’s Communities : How Bilibili Could Go Beyond Youtube?
Bilibili Stock Forecast
Bilibili Stock Forecast