Page 22 - Forbes - Asia (July - August 2018)

FORBES ASIA
BILIBILI

more than doubled to $138 million in the irst quarter this year, and helped spread its popularity through word of mouth.
with losses shrinking to $9.2 million. Chen, who was a founding member of New York-listed mobile
Under the leadership of the 40-year-old Rui, a confessed anime apps maker Cheetah Mobile before joining Bilibili in 2014, has an
fan as well as a serial entrepreneur, Bilibili has carved out a formi- oicial page on the site that uses a Japanese cartoon as his proile
dable niche while going up against internet giants like Alibaba and picture. He regularly engages with users by commenting on trend-
Tencent, which have been spending billions in a cutthroat race ing clips and is a fan of popular anime series including Fate/Apoc-
to dominate the country’s massive online video market. Analysts rypha and Re:Creators.
say Bilibili has some unique advantages, but it remains to be seen More important than Chen’s online interactions has been
whether the company can turn a proit while keeping all those the talent Bilibili has recruited. he company was founded in
Chinese Millennials engaged. 2009 by Xu Yi, 28, who built the prototype site. He later gave
Bilibili has several unusual features that distinguish it from control to Chen but stayed on as president to take charge of
its “community culture,” according to its prospec-
tus (which also states that Chen Rui has a 21.5%
ownership stake and Xu Yi 13.1%). Chen has since
upgraded the company’s technology, expanded
its team to 2,000 and introduced more services
such as anime-themed games and pay-per-view
shows. “It is rare to ind someone of Chen’s age
who understands Bilibili’s youth culture and also
has the right expertise to manage the irm,” IDG’s
Tong says.
Still, Bilibili is nowhere close to achieving Chen’s
grand ambition. he company says in its prospec-
tus that it has evolved into a “full-spectrum online
entertainment world” covering video, live broadcasts
and mobile games, but it has yet to igure out how to
make money beyond gaming.
Bilibili depends on mobile games—chie y the
CEO Chen Rui, serial entrepreneur and confessed anime fan. Fate/Grand Order and Azur Lane, both licensed from
Japan—for as much as 80% of its revenue. he imbal-
rival sites. In addition to providing content through exclusive ance is a risk because it shows the company’s “main operation of
partnerships with local artists and overseas studios, the platform video streaming isn’t becoming a revenue driver,” says Ma Shicong,
has created a number of ways to immerse its users in the so-called an Analysys International analyst. And this seems unlikely to
“er ci yuan” culture. he term, which loosely translates as “two- change in the near future. In China, people are just starting to
dimensional space,” is widely used in China to refer to the virtual open their wallets for content, ater years of rampant piracy that
world of anime, comics and games. severely hindered subscription-based memberships. For Bilibili,
“Bilibili is like a community of young fans,” says Tong Chen, this means that related payments are unlikely to contribute much
managing director of investment irm IDG Capital, which has to revenue anytime soon, says Guo Chengjie, an analyst at Beijing-
invested in the company. “In China there isn’t any similar platform based consultancy iResearch.
of this scale, and it is keeping users highly engaged.” Meanwhile, the company’s experience selling advertising—a
One such feature allows users with site membership to gain major revenue source at other Chinese video services—sparked
access to more content by passing online tests with questions an online backlash. In 2016 Bilibili placed ads in several Japanese
involving subjects that range from company history to Japanese anime series, which angry users pointed out was in violation of
manga artists. Members also have access to more interactive func- the founder’s promise of “forever no ads” in the videos on its site.
tions like “bullet-screen chatting,” which allows multiple view- Chen quickly made a public apology, and now the site carries only
ers to type in comments that are shown simultaneously across a banner ads. In the meantime, competition has been heating up.
streaming video, like darting bullets. In a bid to attract young users, iQiyi, Youku Tudou and Tencent
Bilibili’s users spent an average of 78 minutes a day on the Video are all beeing up their anime channels, with the Tencent-
platform in April, up from 73 minutes in March, according to backed video-sharing site Kuaishou recently acquiring Bilibili
consultancy Analysys International. As Tong says, Bilibili’s user rival AcFun for an undisclosed amount.
base is distinctively young: More than 55% of its viewers are under IDG’s Tong remains optimistic. “Monetization is at the very
24, compared with 18% to 19% at Alibaba’s Youku Tudou, Tencent early stages,” he says. “If not done right, this will afect user expe-
Video and the Baidu-backed iQiyi, Analysys International’s data rience. But as long as the company can keep people engaged and MICHAEL NAGLE/BLOOMBERG
shows. he rest of Bilibili’s fans are mostly longtime followers like spend longer periods of time inside its platform, monetization is
Li, who started to visit the site during his irst year of university sure to happen someday.” F

20 | FORBES ASIA JULY / AUGUST 2018