By YU Hao
Live-streaming platform Douyu reported a 24.1-percent YoY decline in revenue in Q2, reaching 1.4 billion yuan (US$ 190 million). Gross margin dropped by more than three percentage points to 13.6 percent. The report also revealed a net profit of 6.8 million yuan for the quarter, quite a turnaround from the 38.8 million yuan loss this time last year.
Douyu has focused on cutting costs, particularly marketing expenses, cutting revenue-sharing and content costs by a quarter, and sales and marketing costs by half.
Douyu's attempt to make more of its own content has not been popular. Monthly active users have fallen by about ten percent, with about a third fewer paying users than last year.
The financial results show some success in Douyu’s strategy to juggle costs, but the core business – people watching short live streams – is contacting. Spending big on the broadcasting rights for the 2023 League of Legends Pro League demonstrated its need for premium content. The challenge lies in reviving user numbers on a more everyday basis.
After the report’s release, Douyu’s pre-market stock price in the US rose 2.86 percent.
