Huya Group was established in April 2005 and was listed on Nasdaq in the United States on November 21, 2012 (NASDAQ: YY). Huya Group's core business is a social media platform, which also covers live broadcast, short video, e-commerce and other fields. The core products are YY, BIGO LIVE, Likee and HAGO. On November 17, 2020, Baidu acquired YY Live , a live broadcast platform under Happy Times , pushing Happy Times to the forefront of the Internet. (A full high-definition PDF version of "Analysis Report on Brand Development and Strategic Prospects of Immigration|天世新天 YY Brand Development and Strategic Prospects" has 60 pages in total. You can click the report download button at the bottom of the article to download the report)
Hotspots: Baidu acquires YY Live
With the completion of YY acquisition, Baidu 's video business has formed a complete framework, including long video (iQiyi), short video (good/full short video), and live broadcast (YY live broadcast). The acquisition of YY Live has accelerated the business exploration of Baidu in the live broadcast sector to a certain extent, such as e-commerce sales. At present, live streaming has become an important carrier for future commercial monetization, and links can be realized in the three major Internet monetization models of games, advertising, and e-commerce. 5G live streaming will also become an important tool to reconstruct people's social life, information acquisition and consumption transaction methods. Therefore, Baidu chose to increase the live broadcast at this time and won the best live broadcast targets on the domestic market. Its ecological value and strategic value are immeasurable.
For YY, YY Live is an excellent "asset" in Huya Times . Compared with other social and short video products of Huya Times , YY Live is not the most active, but has the strongest ability to attract money. YY Live is naturally incomparable to ByteDance and Kuaishou in terms of user activity, but in terms of live broadcast revenue, YY Live is not inferior. After YY Live is incorporated into Baidu , in addition to the cash flow support of Baidu , it will use the e-commerce mini program in Baidu App to realize a commercial closed loop from product search, product planting to product purchase, and connect to Baidu 's huge traffic pool. In a larger ecological system, YY Live can realize a closed loop of diversified monetization, accelerate business growth and release greater value.
According to publicly disclosed data, this can almost be seen as a win-win deal. However, there are also reports that Muddy Waters is shorting YY, and the investigation believes that 90% of YY's financial data is fake. If there is really financial fraud, it will have a huge negative impact on Baidu . On November 19, in response to the short selling of Muddy Waters, Joy Times responded that the report contained a large number of errors, which was ignorance of the live broadcast industry and the ecology.
Chapter 1 Company Basic Introduction
1-1 Company Profile
Happy Times was established in April 2005 and was listed on the Nasdaq, the United States on November 21, 2012 (NASDAQ: YY). Happy Times 's core business is a social media platform, which also covers live broadcast, short video, social, e-commerce, education, finance and other fields. In March 2019, Huya Times acquired the overseas video social platform BIGO with a valuation of about US$2.2 billion. The current core products are YY, BIGO LIVE, Likee and HAGO.
From the perspective of development strategy, Huya Times accelerates overseas layout and expands international influence. 2020Q2, The global average mobile monthly active users of Huya have reached 457.1 million, of which 90% are from overseas. At the same time, 年年文日本 takes advantage of its technological advantages to create more diversified scenarios and more pleasant experiences for users through artificial intelligence technology. Currently, the group has more than 7,000 employees, 65% of which are R&D personnel.
1-2 Development history
In 2008, Huya Times launched YY Voice, an instant messaging software for game communication, where gamers can actively perform content performances. This UGC mode YY Voice has become a content platform for YY live broadcast.
In early 2009, YY live broadcast users can already compete with game users. YY Live launched an electronic contracting system to manage more than 100,000 YY Live users. In 2010, YY.COM and YY mobile terminals were launched one after another, and Entertainment Live created a reward industry model. YY Live commercialized live broadcast performances on the platform, with revenue reaching about 36 million yuan that year. In 2012, Joy Times (YY.inc) was listed on the Nasdaq, USA. According to its prospectus, YY Live's revenue reached 92.72 million yuan in the first half of 2012, accounting for 30% of the total revenue, making it one of the company's highest-revenue businesses. Since then, YY continues to strengthen its live broadcast advantages, collaborating with Hunan Satellite TV in June 2013; launching the first domestic online live music program "YY Play Concert" in 2015; and launching the "Big Card Play Concert" project in April 2016.
In 2015, YY registered users exceeded 1 billion, and BIGO was deployed overseas.
In 2017, the group's e-commerce platform was launched "one piece".
In August 2017, it launched the "Finishing Short Video" and the overseas version of "LIKE Short Video" (later renamed Likee), which are benchmarked against the domestic Kuaishou platform and the Douyin international version of TikTok respectively. Likee's main markets are in Russia and India.
In 2018, " Huya Live " was listed on the New York Stock Exchange in the United States. In the same year, the market value of Huya exceeded 10 billion. In the second half of 2018, HAGO, the overseas product of Huya Times , is a casual game aggregation social platform integrating multiple real-time games, chat rooms, karaoke and other functions. It is mainly launched in 33 countries and regions including Indonesia , India, Vietnam, Brazil, and the Middle East.
In March 2019, it acquired BIGO with a valuation of nearly US$2.2 billion, including the video communication platform IMO; in August, Huya withdrew from the ranks of Huya live shareholders; in December, the company's Chinese name changed from " Huya " to "Huaju Group", and the English name changed from "YY Inc." to "Joyy Inc.".
In June 2020, Huya Times spent US$100 million to lead the C round of financing for community fresh food e-commerce "Sing City Life".
On November 17, 2020, Baidu (NASDAQ:BIDU) announced that it would acquire the domestic live broadcast business of Hwaiju (NASDAQ:YY) for US$3.6 billion, and the delivery is expected to be completed in the first half of 2021. Split Huya and sold YY live broadcast. Huya only has overseas business, which also means that the company's "all in overseas" strategy has shifted greatly to create a new gathering focusing on globalization.
Chapter 2 Industry Analysis
According to the official introduction of 天世新 , the company's businesses mainly involve several industries such as social media, short videos and live broadcasts.
In the process of accelerating penetration of China's mobile Internet, mobile social users have seen a large-scale growth. In 2018, China's mobile social users reached 737 million, and it is expected to exceed 800 million in 2020. The huge user base highlights the huge market space. In this process, videos and strangers have become important elements of netizens' mobile social preferences.
2-1 Short video industry
1. Introduction to the definition of short video industry
Short video is content suitable for viewing and high-frequency push in mobile state and short time, generally ranging from a few seconds to a few minutes. Because the content is short, it can be made into a separate piece or a series of columns.
China's short video industry has gone through three stages of development: from 2013 to 2015, Meipai and Xiaoka Show started, and short videos entered the public's vision; from 2015 to 2017, major Internet fields competed for short videos, and traditional media such as television joined one after another; in 2017, the vertical segmentation model of short videos was fully launched, and Kuaishou and Douyin rose; in 2020, the short video industry entered a mature stage, and the competitive landscape tended to stabilize and solidify, forming a competitive landscape with two super (Tik Tok and Kuaishou), the market scale expanded rapidly, and the number of platform companies increased.
2. Current development status of the short video industry
With the popularization of mobile devices and the growth of mobile Internet users, short video users have achieved rapid expansion, and the industry has entered a mature stage of multi-dimensional development and multi-strength parallelism. Data shows that in 2019, the number of short video users in China was 627 million, and it is expected that the number of users will increase by 15.2% year-on-year to 722 million by 2020. With the further implementation of 5G commercialization, the short video industry will enter the stage of innovative competition. The growth rate of the market size of
short videos has slowed down, but the overall scale still maintains continuous growth. It is expected that the market size will reach 38.09 billion yuan in 2020. The accelerated implementation of emerging technologies such as 5G will push the short video industry into the next stage of rapid development, giving rise to changes in many industries, the integration of the short video industry and other industries will continue to deepen, and the industry scale also has room for continued growth.
4. New trend in the development of the short video industry
(1) Short videos focus on the long video field
Against the backdrop of Internet traffic and capital exhaustion, short video platforms are also eroding the market share of long videos and online live broadcasts. In terms of daily usage time, short videos have surpassed long videos, and short videos have the most obvious pulling effect on new netizens, and have become a high ground for e-commerce platforms and social platforms to compete for traffic resources. During the Spring Festival, Huanxi Media sold the copyright of "Mom Hug" to ByteDance for 630 million yuan. The New Year film "Mom Hug" was played for free on online platforms such as Douyin, Toutiao , Xigua Video, and Douyin Volcano Edition on the first day of the Lunar New Year.
(2) Short video e-commerce marketing and sales
Against the backdrop of the rapid development of the new economy, various platforms have actively explored new business models such as IP content marketing and e-commerce sales, and used high-quality content as the entrance to create more business transformation scenarios. For example, Tencent Video takes the popular program " Creation Camp 2019" as the entrance, and bundles the likes and ranking channels in the program with brand hot-promotion products to create a closed marketing loop of "content + selling goods". The short video platform improves the efficiency of commercial transformation through the deep integration of content and e-commerce.
(3) sinking market expansion user growth
The competition for incremental traffic of mobile video has shifted from first- and second-tier cities to sinking market. The young people in small towns are regarded by video platforms as the key to maintaining the growth of membership and reversing the profit and loss deficit. Data shows that among the short platforms of Volcano, Douyin and Kuaishou, users in third- and fourth-tier cities account for as much as 60%, and the penetration rate of third- and fourth-tier users is very high. The rapid development of major short video platforms is due to the growth of third- and fourth-tier users after the channel has been subsided.
(4) Layout overseas markets to expand profit space
As the user scale of first- and second-tier cities becomes saturated, going overseas has become the path for the short video market to get out of the predicament. Various platforms are targeting overseas markets, seizing potential members and increasing paid penetration rates. In 2019, Tencent led the A round of financing for the Indian version of iQiyi MX Player. YYHappy Times began to deploy overseas markets in 2016, and has now formed a content overseas matrix of live broadcast products BIGO Live, Nimo TV, Yome Live, Cube TV, and short video product Likee.
Chapter 3 Company analysis
Huya Times uses multiple businesses such as "instant messaging + short video + live broadcast + small game social" to build a solid user closed loop. 年文日本 global diversified product matrix includes: pan-entertainment live platform YY live broadcast platform, overseas live broadcast platform BIGO LIVE, the world's leading short video platform Likee, the global video communication platform imo with 210 million monthly active users, and the mini-game-oriented social network platform HAGO. 年文日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日本 日� 年新日本 uses "instant messaging + mini-game social" to attract traffic and "short video + live broadcast" to monetize the industry. Therefore, 90% of the group's revenue comes from live broadcast, and the source of domestic live broadcast revenue mainly comes from YY live broadcast.
3-1 Main product introduction
1. YY Live: Platform Ecology
YY Live is the founder of the guild ecosystem in the live broadcast industry, and has an active live broadcast ecosystem composed of users, anchors and guilds. As of May 2020, YY Live's mobile mobile phone has nearly 40 million active users, more than 1.5 million star anchors, and nearly 3,000 guilds signed on the platform.
(1) Live Guild guild
From the perspective of live guilds, the guilds on the YY platform are divided into gold guilds, star guilds and ordinary guilds. The Gold Medal Guild and Star Guild are guilds certified by the official YY Live Platform and have the qualifications to recruit, manage and train anchors. The Gold Medal Guild is the most authorized guild on the YY Live platform. It signs a cooperation agreement with the official YY Live offline and can sign a contract with gold medal artists and obtain gold medal recommendation resources.
At present, YY is recruiting a large number of guilds for e-commerce live broadcasts. This is not the first time YY has tried e-commerce. YY's "YY One Piece" is YY's S-class e-commerce project. It was previously a content e-commerce platform for non-standard jewelry products in the form of live shopping. Moreover, the YY live broadcast platform also launched "live shopping", which is the entrance to "YY One Piece". Recently, YY is also doing e-commerce live broadcasts for standard products, and jointly promotes some local brands with Guangzhou companies. Now YY wants to extend to full category coverage, so the number of e-commerce live guilds must also keep up.
In December 2018, YY's YY guild system was implemented. As of October 2019, YY has 100 guilds. In order to expand live e-commerce, YY is still recruiting guilds in large quantities and has given many policy benefits. Rebates for people are one of its important ways, specifically:
Economic benefits: secondary sales distribution + secondary distribution + annual fee rebates + traffic service fees;
Guild Traffic Alliance: fans who are locked by the lower level will pay attention to the superiors and superiors’ stores by default; the live broadcast room supports mutual guidance from merchants in the guild;
Public domain exchange: Each fan platform locks is given to 2 store fans, and at the same time, by locking fans, more exposure will be gained in the public domain. Expanding the guild team and adding another fire to e-commerce live broadcasts is the focus of YY's current e-commerce business development.
YY has also supported YY Entertainment's guild in the past to help it expand its e-commerce sector. On October 18, 2019, YY's top entertainment guild Wudi E-commerce sold more than 5 million in 8 hours in its debut on the "One Pi" e-commerce live broadcast platform under YY.
In this case, Wudi's anchors had more than 8,000 people at that time, had more than 100 million fans, and annual reward revenue exceeded 210 million yuan, becoming one of the highest valuation guilds in YY live broadcast at that time. Live e-commerce exploded in 2019, and Wudi Media also wanted to achieve a closed loop of commercial value through live e-commerce. After YY learned about the specific needs of Wudi E-commerce, a subsidiary of Wudi Media, about this e-commerce ceremony, he immediately formed a special operation team to be responsible for the project. From the writing of activity drainage plans and communications, the support of welfare, to the design of main KVs, the writing of publicity and preheating copywriting, material editing, etc., they are all guided under the "one piece" platform. In addition, YY also helped Wudi e-commerce to select products, and cooperated with Wudi to prepare various benefits such as Huawei mobile phones and 10% off leaks.
AiMedia Consulting analyst believes that from YY's own perspective, focusing on live broadcast social networking itself has certain risks. With the improvement of the supervision of mobile live broadcast content, live broadcasts that attract attention with low-level fun have been shut down and rectified. Every step of these live broadcast platforms requires caution. Today, when Pan Entertainment Live is a little weak, YY is also looking for a new development path for itself. E-commerce live broadcast is still in the period of continuous project outbreak, and the late YY e-commerce live broadcast is not too late. Therefore, vigorously recruiting guilds and developing live e-commerce is also a new way out.
(2) Platform anchor
YY Live has experienced PC live broadcast wars and thousand-broadcast wars over the past decade, and has successfully incubated Huya live broadcasts, both of which are firmly ranked first in the pan-entertainment live broadcast list. One of the key reasons for being unmoved is that it has strong content operation capabilities. Unlike the idea of relying on exclusive agreements to bundle anchors, YY has its own model in anchor training: on the one hand, it attaches great importance to the long-term cultivation of native anchors. Through a number of incentive plans, the anchor renewal rate has always remained above 80%, which is at a high level in the industry. On the other hand, YY has always attached importance to the star-based strategy of anchors, and has promoted the special anchors such as Modern Brothers, Xiao Aqi, Dai Yutong to go out of the circle, and supports the development of its anchors on multiple platforms. After the anchors are out of the circle, they will bring more fans across the circle back to the platform to help the growth of live broadcast platforms.
YY platform recruits anchors, and there are usually two ways for anchor income.
The first type is salary commission income. Anchors who join a certain channel can enjoy the salary provided by YY official, and the salary can be divided into fixed salary and commission. If the anchor performs very well and can attract more viewers, the anchor will receive a salary commission. Therefore, it is also very important to train the anchor's hosting ability and attract people.
Another type is guild commission. Guild commission means that the anchor will deduct the guild commission when redeeming the blue diamonds into commissions (the guild lottery becomes the OW setting of the signing guild where the signing guild is located). The anchor can click to redeem the red diamonds in the personal center - My account - Blue Diamond and Commission, and you can see that the current signing guild commission is drawn.
Usually, the income generated by the anchor needs to be deducted from the platform commission first, and the remaining part can be distributed according to the commission ratio between the anchor and the guild agreement. For example, if a tourist gets a gift of 200 yuan, the official YY draws 50%, and the remaining 100 yuan. If the guild draws 20%, the anchor gets 80%, which is 80 yuan; in the figure below, the anchor gets 70%, which is 30% of the commission of the anchor.
Chapter 4 Financial Analysis
4-1 Profitability Analysis
As of the fourth quarter of 2019, the global average monthly active users (MAU) of 年多3 mobile end reached 485.2 million, of which 78.8% came from markets outside China. The average MAU of its platform and product Likee mobile terminal increased by 208.3% year-on-year to 115.3 million; the average MAU of IMO mobile terminal reached 211 million; the total number of YY paid users increased by 9.8% year-on-year to 4.5 million; the total number of Huya paid users increased by 5.9% year-on-year to 5.1 million. Based on financial reports, YY live broadcast revenue in the fourth quarter exceeded 3 billion yuan. As of the third quarter of 2020, YY Live users had 41.3 million monthly active users.
From the perspective of live broadcast revenue, active users and paid users, YY Live is still a live broadcast platform that is relatively close to the top.
Chapter 5 Challenges and Opportunities
5-1 Challenges facing
1. Users enter the stagflation stage
Since 2018, the mobile Internet traffic dividend has gradually faded, the market competition pattern of video, live broadcasts and other markets is basically fixed, the platform user growth ceiling has emerged, and users enter the stagflation stage. Data shows that as of March 2020, the number of mobile Internet users in China was 900 million, an increase of 79.92 million mobile Internet users from the end of 2018, accounting for 99.3% of the total number of netizens. In addition, the growth rate of mobile Internet users has continued to decline since 2016, which shows that the mobile Internet dividend is close to full saturation and the user scale is difficult to grow rapidly.
In recent years, with the changes in the industry situation, the growth of 年文日本 user has slowed down. Financial report data shows that in 2020Q3, Huya Times 's global MAU fell 4.0% year-on-year to 390.1 million, with 4.1 million paid users, a year-on-year decrease of 4.7%. In the last quarter, YY's number of paid users was also 4.1 million, and the growth rate continued to slow down.
2. Platform monetization issues
At present, , the main product of , YY Live, has developed business models such as advertising traffic monetization, member subscription, game promotion and user rewards. However, the current online live broadcast business model cannot transform the industrial potential into output value, and the live broadcast industry has not built a competitive strategy and an effective profit model that is in line with its own development. The profit model of Pan Entertainment Live Money is too single, and online advertising is still the main source of profit in the live broadcast industry. User rewards are a drop in the bucket for live broadcast platform revenue, and profit models such as member payment and extended product consumption penetration are still in their infancy. Financial report data shows that in Q1 2019, the average payment rate for Douyu Live was 3.8%, and the average payment rate for Huya Live was 4.3%. The overall payment rate for the industry needs to be improved.
3. Homogeneous competition
4. Uncertainty in the international environment
The outbreak of the new crown epidemic in 2020 has brought macroeconomic and geopolitical uncertainty to the world, causing the overseas layout of Chinese Internet companies to face difficulties. After the United States threatened to ban Chinese software such as TikTok, the Indian government announced 59 Chinese software applications bans in June, including two applications, Likee and BIGO Live, of , Huya Times (YY). Since Huya Times 's business focus is entirely on overseas markets, 90% of the users are from overseas, so they are more sensitive to changes in the overseas macro environment.
Some of the data and pictures in this article are excerpted from the " Huya Times YY Brand Development and Strategic Prospect Analysis Report" released by AiMedia Research Institute. For more industry research reports, please click "Learn More" below.
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