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In June, Weibo had 256 million daily active users. In the second quarter, Bilibili had 102 million daily active users, less than half of Weibo.

This can be reflected in the performance. Weibo's revenue in the second quarter was 3.2 billion, while Bilibili's was 6.1 billion, almost the opposite.

In terms of commercial value, Weibo’s hundreds of millions of users were instantly killed by Bilibili’s “poor guys”.

#1

B station > Zhihu > Weibo

Business Data Analysis

Tapping into the value of existing users has become the best approach for old platforms like Weibo.

After years of development, the number of active users of Weibo has shown a trend of peaking. In June, the number of monthly active users was 583 million, a decrease of 16 million from the same period last year; the number of daily active users was 256 million, a decrease of about 2 million.

In contrast, Bilibili, which is mostly populated by young people, has a certain growth trend. In the second quarter, Bilibili had 102.3 million daily active users, a year-on-year increase of 6%; monthly active users were 336 million, compared with 324 million in the same period last year. More importantly, the time spent by Bilibili users is also increasing. In the second quarter, the average daily time spent by users was 99 minutes, compared with 94 minutes in the same period last year.

This means that even though Bilibili users are labeled as "low pay, high workload", in fact, the user value is not low. Among many social platforms, Weibo is the platform with the lowest commercial value.

Currently, only Kuaishou, Bilibili, Weibo, and Zhihu can obtain accurate user data. According to the daily active user and revenue data, each active user of Bilibili contributes 60 yuan in revenue, while that of Kuaishou is as high as 78 yuan, and that of Weibo is only 12 yuan.

Zhihu has not released data on daily active users. According to the calculation based on the number of monthly active users, each user contributes 11.6 yuan. Considering that monthly active users are generally higher than daily active users, the contribution of Zhihu users is likely to exceed that of Weibo.

In other words, although Weibo has been in the second tier of social platforms for a long time, it has users but is unable to enhance the value of users.

The user value cannot be improved, and Weibo's revenue growth is very slow. With the loss of active users, Weibo's revenue is also under pressure. In the second quarter, Weibo's total revenue was 3.2 billion, which was basically the same as the previous year. Currently, Weibo's single-quarter revenue level is not much different from that in 2018 and 2019, and it is almost standing still.

Compared with other platforms, Weibo's biggest highlight is its high profit level. In the second quarter, Weibo's net profit was about 800 million yuan, a year-on-year increase of 37.5%. In comparison, Zhihu lost 160 million yuan and has not yet achieved profitability. Bilibili is even more trapped in a vortex of losses, with a net loss of 600 million yuan in the second quarter. Although it has narrowed, it has not achieved profitability since its listing.

Weibo's gross profit margin is also far higher than many social platforms, with a gross profit margin of 79.5% in the second quarter, which is between 78% and 80% all year round. In comparison, Zhihu's gross profit margin this quarter was 56.6%, Kuaishou's was 55%, and Bilibili's was only 29%. Weibo has the best gross profit margin.

There is a huge user base but no way to maximize revenue, and the user value is high but no profit. This phenomenon has a lot to do with the current development model of the platform.

#2

Advertising is not a big deal

Business Data Analysis

Advertising was the earliest revenue generation method for social platforms, but nowadays, it is difficult to make progress relying on advertising.

Kuaishou's revenue consists of three components: online marketing, live streaming and others (including e-commerce), which accounted for 56.5%, 30% and 13.5% respectively in the second quarter. The advertising business has been upgraded to online marketing, covering short dramas, merchant promotions, local life and other aspects, not just simple advertising.

Bilibili's revenue consists of four components: value-added services, advertising, mobile games, IP derivatives and others, accounting for 42%, 33%, 16% and 8% respectively in the second quarter. Value-added services were 2.6 billion, up 11% year-on-year; advertising was 2 billion, up 30% year-on-year; games were 1 billion, up 13%. VIP membership and live broadcast are the mainstays, and it does not rely too much on advertising.

Zhihu mainly relies on paid reading, generating revenue of 400 million yuan in the second quarter, accounting for 46%. Marketing services and vocational education business revenues were 300 million yuan and 130 million yuan, respectively, accounting for 37% and 14%.

It can be seen that in the business structure of these three platforms, advertising is not the main force, and the structure is very reasonable, with almost one main business accounting for about half and 2-3 supporting businesses.

Weibo's revenue consists of only advertising and marketing, and value-added services. In the second quarter, advertising and marketing revenue was 2.67 billion, accounting for 86%, and value-added services were 450 million, accounting for 14%. Apart from this, there are no other businesses. In other words, Weibo is essentially no different from the portal website Sina, and still relies on traditional advertising and marketing.

The advertising model is not like e-commerce, live streaming and other models, which do not require too much manpower for research and development and market promotion. Whether it is Kuaishou's e-commerce business, Bilibili's game business, or Zhihu's vocational education business, it requires investment of funds and manpower. According to employee data at the end of 2023, Weibo has the largest number of monthly active users per employee, about 110,000; Kuaishou has the least, about 12,900, Bilibili has 37,400, and Zhihu has 38,600. This objectively explains why Weibo's gross profit margin is much higher than the other three platforms.

But the advertising model cannot "squeeze" more value from users.

Weibo's value-added services account for only 14%, while Bilibili and Zhihu are the absolute main business. The income brought by Weibo's membership business is almost the same as that of Zhihu, which is much smaller in size, and is not even a fraction of Bilibili. This means that Weibo membership is not very attractive to the vast majority of users.

For users to be willing to pay, the "value-added" of the value-added service must be reflected. On Bilibili, it is the viewing privilege of many movies and TV series, and on Zhihu, it is the selected content. However, the core value of Weibo membership is difficult to define. Weibo celebrity, level upgrade, and exclusive nickname are less attractive than "whether you can watch the movies you want to watch" and "whether you can see the professional answers you want to see". It is also difficult to actively continue to pay for Weibo membership.

But it is not a problem if value-added services cannot make money. Kuaishou does not have any value-added services, and all video content is free, but it can achieve higher revenue and profits. Behind this is the change in the business model of social platforms.

#3

Maximizing creator value

Business Data Analysis

The membership model is also experiencing growth stagnation.

Zhihu's paid membership revenue fell 4% year-on-year; Bilibili's value-added service revenue grew 11%, but this part of the business includes live streaming. Zooming in, iQiyi's membership revenue in the second quarter was 4.5 billion, down 9% year-on-year; Keep's online membership and paid content revenue was 400 million, down 2.6% year-on-year.

In other words, compared with the advertising model, the membership model can increase willingness to pay and improve revenue levels, but users' willingness to pay for the platform is decreasing, and this model is becoming increasingly difficult to maintain.

In contrast, Kuaishou and Douyin have opened up direct e-commerce and integrated marketing models. They rely on the anchors and influencers on the platform to directly develop e-commerce businesses through their appeal. On the new short video social platforms, anchors and influencers are both content producers and product salespeople.

This model can be roughly understood as a CPS model (commissioning by sales), which has a more direct impact on merchants and a higher ROI (return on investment). For users, the platform content is free, and they can also buy reasonably priced goods through top anchors. Compared with advertising and user payment, this link is smoother and in line with the interests of brands and merchants.In the context of businesses paying more attention to conversion and digestion rather than brand maintenance, Douyin and Kuaishou are more popular, with a volume an order of magnitude higher than other social platforms. Xiaohongshu and Bilibili are also exploring in this direction.

For this model to work, it is necessary to gather more creators and let them make money from it. This requires not only a large user base, but also users' shopping habits and smooth consumption experience on the platform. The reality is that although Weibo and Zhihu are not short of top creators, they ultimately failed to get out of this model.

Weibo has incubated many top internet celebrities, but the final route it took was to restrict top anchors from doing advertising and collect all of their content from the platform for distribution. Zhihu uses the output of top content creators as a tool to charge users. These two models essentially cannot allow creators to make more money, so investing in Douyin and Kuaishou has become a natural choice.

Top creators still regard Weibo and Bilibili as important channels, but most creators’ main platforms are on Douyin and Kuaishou. Once creators have a certain amount of their own traffic, it is unreasonable to refuse such temptation because it is much more profitable to hang shop windows and live broadcasts than to place advertisements.

Douyin, Kuaishou, Bilibili, Zhihu and Weibo represent the three stages of social networking sites. The advertising model can no longer meet the needs of commercialization, and the growth of value-added services has stagnated or even slowly declined as the number of paying users has peaked. The e-commerce and integrated marketing models of Douyin and Kuaishou have demonstrated the characteristics of high conversion and strong stickiness, and are currently the optimal solution.