The "hiatus wave" among Bilibili content creators is fake, the difficulty of making money is real

Bilibili, a Chinese video-sharing platform popular among young audiences, has recently made headlines as several of its high-profile content creators announced a hiatus from posting. The reasons cited range from operational issues to financial difficulties, with some even claiming that the company’s incentive program has been reduced, making it difficult to generate income from their content.

Bilibili, which went public on the Nasdaq in March 2018, has grown significantly in recent years, with monthly active users reaching 223 million in the third quarter of 2022, a year-over-year increase of 27%. However, despite the growth in user numbers, the company’s financial performance has been less impressive. In 2022, Bilibili reported a net loss of 11.6 billion yuan ($1.8 billion), compared to a net loss of 6.8 billion yuan in 2021.

One of the main reasons for Bilibili’s financial struggles is the company’s reliance on content creators to generate revenue. Bilibili’s incentive program, which rewards creators for views and engagement, has been a significant source of income for many content creators on the platform. However, in recent years, the company has reduced the amount of money paid out to creators, leading some to believe that the platform’s business model is unsustainable.

Bilibili’s revenue is generated primarily through advertising, but the company faces stiff competition from other Chinese social media platforms, such as Douyin (TikTok) and Kuaishou. Moreover, as the Chinese economy continues to slow down, advertisers are becoming more cautious with their spending, which is affecting Bilibili’s ability to attract advertising revenue.

To address these challenges, some experts have suggested that Bilibili should consider pre-roll ads, similar to those used on YouTube. However, Bilibili’s CEO, Chen Rui, has promised never to use pre-roll ads, citing concerns that they would damage the user experience.

Bilibili’s current financial struggles have also had an impact on its stock performance. Since the company’s IPO in 2018, BILI, the company’s ticker symbol, has experienced significant volatility, with the stock price reaching an all-time high of $183.64 in February 2021 and dropping to $51.28 in October of the same year.

Despite the challenges that Bilibili faces, the company has several strengths that could help it weather the storm. The platform is highly popular among younger audiences, with the average user age being 24.5 years old. Moreover, Bilibili has a large and growing user base, with the number of monthly active users increasing by 27% year over year.

Furthermore, the company has been investing heavily in new content, including anime and game adaptations, which have proven to be highly popular with its user base. In addition, Bilibili has been expanding into new markets, including Japan and Southeast Asia, which could help the company diversify its revenue streams and reduce its dependence on the Chinese market.

In conclusion, Bilibili’s current financial struggles are a reflection of the challenges that many Chinese social media platforms are facing. However, the company has several strengths that could help it bounce back, including a highly engaged user base and a growing presence in new markets. Investors who are interested in Bilibili should pay close attention to the company’s efforts to diversify its revenue streams and reduce its dependence on advertising revenue.