By SHE Xiaochen
Video streaming site Bilibili made 19.4 billion yuan (US$3 billion) in 2021 (non-GAAP, unaudited), 62 percent more than the year before but not nearly enough to cover costs. Total losses were 5.5 billion yuan, of which 2.1 billion came in the last quarter, double the losses of 2020.
Chief Financial Office FAN Xin is well aware of the widening losses. He said Bilibili aims to narrow losses by improving revenue per user and controlling costs. He expects to break even in 2024.
Marketing expenses - money spent on acquiring new users - increased significantly in 2021, but not as fast as revenue. "If we stay on track to reach 400 million users by 2023 while continuing to optimize costs, marketing expenses will take up less of total revenue," Fan said.
Bilibili will be more ROI-focused, Fan also said, so R&D - investment in new games, new functions and new technology – is set to decline.
Average revenue per user increased by 20 percent driven by ads and value-added services such as subscriptions and in-app purchases which increased 83 percent and 34 percent respectively. Bilibili will introduce more pay-to-play features to bring gross margins to 30 percent in the next three years.
Ad revenue increased 145 percent to 4.5 billion yuan, contributing 23 percent of revenue, versus 2020's 13 percent. This is attributable to increases in both the number of users (up 35 percent in Q4) and ad revenue. The launch of Huahuo, which matches influencers to advertisers, has helped.
Bilibili will provide advertisers more choices of when, where and how the ads are shown, said CEO Chen Rui. 2022 may bring some macroeconomic pressure but ad revenue will continue to grow steadily.
