CEO Dong Rongjie expressed his mood at this stage with a poem in his internal letter, which seems to imply that the next route of live broadcast of Huya is clear and will ride the wind and waves.
just the night before, Betta announced that it had received a preliminary non binding proposal from Tencent, suggesting that Betta and Huya should be merged in the form of share exchange.
although Dong Rongjie said in his internal letter that the company’s board of directors has not made any decision on the merger, it will carefully review and evaluate the proposal; the betta board also plans to review and evaluate the potential transaction. But as the largest shareholder of Huya and douyu, Tencent has basically determined the outcome of the merger.
previously, the analysis pointed out that Tencent is the key to the merger of fighting fish and tiger teeth. Today, Tencent has a clear attitude and is happy to see its success. The combination of fighting fish and tiger teeth is on the way.
However, merger is not the end. In the new competitive environment, how can fighting fish and tiger teeth jointly defend the hinterland? At the same time, how to balance and compromise in the new company?
in the past quarter, the revenue and net profit of douyu and Huya showed a growth trend, of which the total revenue of Betta increased by 33.9% year-on-year, and the adjusted net profit increased by 513.7%; while the total revenue of Huya increased by 34.2% and the net profit increased by 106%.
from the average monthly active user data, the douyu Mau was 165.3 million, with a year-on-year growth of 1.5%, reversing the downward trend in the last quarter. Huya Mau was 168.5 million, an increase of 17.1% compared with 143.9 million in the same period of last year.
on the mobile Mau, the number of tiger teeth was 75.6 million, an increase of 35.2% compared with 55.9 million in the same period of last year; compared with 58.4 million, the number of bettas increased by 15.4% compared with 50.6 million in the same period of last year. In terms of monthly living growth of mobile terminal, the growth rate of Huya mobile terminal has always been higher than that of Betta, and the proportion of monthly living of tiger tooth mobile terminal in the second quarter was 44.87%, stronger than that of Betta (35.3%). Huya has obvious advantages in the mobile terminal, and the market space of Betta in the mobile terminal still has a large exploration space.
in the past quarter, the average number of paid users of Huya has increased greatly, from 4.9 million in the same period of 2019 to 6.2 million, an increase of 26.5%. The number of users paying for Betta in the second quarter of 2020 was 7.6 million, an increase of 13.4% compared with 6.7 million in the same period last year.
from the perspective of revenue structure, live broadcast revenue has always been the core revenue source of the live broadcast platform. In recent years, the live broadcast platform has been exploring diversified revenue models, but it has not contributed much to the total revenue.
Huya had been working hard in the field of live game broadcasting, while Betta once increased the investment in sports entertainment, preferring pan entertainment development. Today, compared with the betta, tiger tooth’s revenue structure is slightly single, with advertising and other revenue close to 5%, compared with 7.5% for Betta and 7.2% for the previous quarter.
in summary, the four core data of Huya, including revenue, profit, MUA and Mau on mobile terminal, are higher than those of Betta. Tiger tooth tries to open up the gap with its competitors in content ecology. Huya’s operation ability and commercial liquidity are better than those of Betta. At the same time, the user volume and user activity of douyu are better. In these aspects, both sides are trying to catch up with each other.
but the visible trend is that the data of Betta and Huya are getting closer and closer, the business is highly similar, and the gap is gradually narrowing. In Q1, douyu made every effort to catch up with Huya, and its total revenue was drawing closer and its net profit exceeded that of Huya. However, it was overtaken by Huya again in Q2, and Huya Mau overtook douyu.
according to the non binding preliminary proposal issued by Tencent, tiger tooth or its subsidiaries will acquire each issued common share (including common shares represented by American Depository shares) of douyu, and the shareholders of douyu will receive an agreed number of new class a common shares issued by Tiger tooth in exchange for their respective Betta shares.
at the same time, huanju times also announced the transfer of 30 million shares of Huya class B common shares to Tencent, with a transaction scale of $810 million in cash.
according to the scheme disclosed at present, douyu and Huya are merged in the form of share exchange, and Huya is the main one. Analysis shows that this means that the main body of the company in the future is tiger teeth, and the betta may be delisted, but it does not mean that tiger teeth eat the betta.
it is also reported that if the acquisition is completed, the betta senior management team will become the senior management team of the new company. In this regard, the betta side said to be subject to the announcement.
according to the share prices of both parties, as of August 11, 2020, the market value of Huya is US $5.092 billion, and the market value of Betta is RMB 4.442 billion. After the merger, the target market value of the new company is $10 billion.
of course, whether we can achieve this goal depends on the market reaction and the company’s subsequent business performance, especially the changes in revenue and cost, and whether the cost of anchor can be significantly reduced.
at present, the growth of douyu and Huya depends more on the support of Tencent resources. Douyu and Huya both emphasized the importance of Tencent resources in the financial reports, which also became the key factor for their future growth.
at the level of fighting fish, relying on the copyright resources of Tencent, the major shareholder of Tencent, has natural advantages in live broadcast of large-scale E-sports events, self-made E-sports events and activities, and signing up top-level E-sports teams. At the same time, with the help of Tencent’s “big live broadcast ecology”, the betta platform and hosts can get better increments.
in terms of content, tiger tooth has already integrated the content of game live broadcast into many Tencent games and products. It is expected that more game content will be accessed in the next few quarters. Tiger tooth also tries to have exclusive access to the one button broadcast function in some Tencent games. During the process of playing the game, users can start the one button broadcast at any time, and the game can be broadcast live through tiger tooth.
in addition, in terms of E-sports events, whether in terms of copyright content, commercial cooperation, and the improvement of new user experience, tiger tooth said that it would conduct in-depth discussions with Tencent and other companies.
However, excessive reliance on Tencent’s game copyright resources also reduces the innovation of the platform to a certain extent. In the future, it may be the biggest challenge for Betta and Huya after the merger that how to innovate outwards and find the increment from the outside to cope with the new competitive environment.
on the other hand, Tencent leads the merger of the number one and the second in the field of live game broadcasting. To a certain extent, it also means that the game live broadcasting industry has reached the ceiling, from a user growth stage to a profit growth stage.
at the same time, with the increasing voice of Tencent industry, there will be no sign of anchor with sky high price. Game anchors may become more and more dependent on the platform, and their bargaining power is relatively reduced.
previously, Dong Rongjie expressed the attitude that “when the wind comes, the sail will speed up”. When the opportunity is ripe, it will be natural, and when the wind blows, the ship will speed up.
now, after going through the last stage of waves and sand washing and the listing of head players, the tide of the live broadcasting industry is rising, which is even with the bank, and the river is more broad. It is a good time to hang sail high and sail with the wind.
in the first quarter, the revenue of live broadcasting of Huya declined month on month for the first time, down 3.05% month on month. Huya financial report said that the month on month decline was mainly due to the emergence of some new players in the live game market, which took part of the flow of tiger tooth. The new game player here includes the Kwai B station, the fast hand, even the byte beating.
in Q1, 2020, the average active users of station B are 172 million and 156 million, respectively, with a year-on-year growth of 70% and 77%. In its revenue and composition, the game business revenue increased by 32% to 1.15 billion yuan, accounting for 49.6%, nearly half of the total. The number of monthly paid users of station B increased to 13.4 million, a rapid increase of 134% over the same period of last year.
at the 2020ChinaJoy global competition conference, Tang Yuyu, the head of fast game, first disclosed the monthly live user data: the live broadcast live Kwai break exceeded 220 million, and the short live video games exceeded 300 million. Kwai Kwai game official said, the quick game Association will be divided into the highest proportion of the first tier platform, and will generate 5 billion capital and 100 billion traffic to support the game content creation. At the same time, we plan to join hundreds of universities to help the training of the talents in the competition, and create an open and win-win game competition.
“we still hope to win such a good event.” He also said that based on the overall situation this year, the impact of the exclusive rights on tiger teeth is controllable.
Dong Rongjie Kwai Mobile’s influence on B station and fast hand also mentioned that the main advantage of short video platform may be in the direct broadcast of mobile games, but tiger tooth has always been leading the mobile games in the industry, and its leading edge is still very obvious.
, however, B stations, Kwai Fu and byte beating now occupy more and more user time with short video, continuously increasing new users of game playing, improving the ability to pay, or bringing strong impact on the future traditional game live platform. At present, Tencent is also a shareholder of B station and Kwai Fu, but
has no voice. In the fast-growing game live broadcasting industry, douyu and Huya need to take advantage of Tencent in the future to find a differentiated development path to cope with the fierce external competition.