Changes
We focus on the development of Bilibili over the last decade, hoping to analyze the rise and fall of one of the most influential online streaming applications and the community in China. In 2012, Bilibili launched mobile apps for Android and iOS, achieving full coverage from PC to mobile. In 2013, Bilibili held the first offline BML event in Shanghai, which is an event that is highly associated with ACGN culture. These progressions helped Bilibili develop a concentrated community of highly loyal users.
With a very strong and solid beginning, Bilibili has aimed to expand its market from 20s fans of Japanese ACGN to GenZ, a much larger market, starting from the past decade. This requires Bilibili to decrease its attention on its traditional ACGN area and gradually expand its territory by introducing new forms of media, content, and fields. In 2014, Bilibili introduced live streaming while acquiring its first licensed anime series. This not only identified the first step of officializing the ACGN culture of Bilibili but also expanded its user community beyond the limitation of ACGN fans. Meanwhile, Bilibili began its service as an exclusive mobile game agency, increasing its diversity in offered media.
In 2017, Bilibili launched e-commerce services, aiming to monetize its community with profitable ACGN merchandise, and this service was soon expanded to other areas. In 2018, Bilibli completed its IPO and launched on NASDAQ, and in the next year, Bilibili held the first New Year’s Eve gala, an extraordinary party that not only reached 80 million livestream views but also significantly changed the public recognition of Bilibili from a rather small community of ACGN fans to a domestic platform of younger generation. After 2020, the portrait view of videos was introduced and encouraged by Bilibli by designing the short-video-favored algorithm, giving more exposure and views to the short videos and more profits to short video content creators. Many regard this policy as a counter-move to Tiktok, and this policy successfully absorbs a huge amount of new users to Bilibili at the cost of a severely decreased video quality.
We could see an obvious shift in Bilibili’s strategy from a highly “otaku” narrative to a milder and more general narrative of “the youth”. A huge variety of new media debuted on Bilibili during this process. Bilibili started to produce original content instead of being a sheer publisher and distributor of completed media, and this includes special online/offline events, documentaries, real-life shows, and festival/anniversary-related gala. This tendency is especially visible in terms of the shifting business model of Bilibili in the past decade. Meanwhile, Bilibili started to decrease its average video length using a more short-video-favored algorithm as well as a new video display format that could better fit in portrait playing mode. Although a controversial move from both the business perspective and the user community, Bilibili successfully enriched its platform with a huge amount of short videos and a whole new ecosystem along with them. As the identity and community composition of Bilibili changed tremendously, its 3C factors changed as well. Focusing on the “generalization” strategy of expanding Bilibii’s user group, we could easily anchor the main motivation behind every past activity of Bilibili.
Business model
Bilibili started by creating revenue out of offering advertisements as well as publishing video games. Bilibili served as a great platform and channel for many video game developers to distribute their games, and a Japanese game called FGO was so successful that it boosted Bilibili's IPO. Between 2017 and 2020, Bilibli was eager to expand its market scale and focused more on online live streaming and e-sports. After 2020, Bilibili realized the success of TikTok and Little Red Book, and they started to shorten their average video length by introducing a new format of videos and encouraging short video creators to use a short-video-favored algorithm.
Due to its high user retention, younger user base, and promising growth prospects, the platform has attracted significant attention from investors. However, since its inception, it has consistently reported financial losses, which have escalated with the company’s expansion. In 2022, losses peaked at 7.5 billion RMB. After a painful period of cost reduction and efficiency improvements in 2023, Bilibili entered a phase of steady growth, with an annual revenue of 22.5 billion RMB and a net loss of 4.8 billion RMB, representing a 35% reduction compared to the previous year. The company continues its efforts to achieve profitability.
Bilibili’s revenue model primarily depends on monetizing user traffic on its video platform, with its revenue streams divided into four main segments:
Value-Added Services:
This category includes premium memberships, paid videos, virtual gifts for live streaming, paid subscriptions, and virtual goods purchases. In the first quarter of 2024, Bilibili’s total revenue reached 5.66 billion RMB, with value-added services generating 2.53 billion RMB, a 17% year-on-year increase, making it the company's largest revenue contributor.
In 2017, Bilibili introduced its premium membership service, a conventional model for video platforms, offering members perks like high-definition video streaming and access to the latest anime series. However, in April 2021, new regulations requiring content review before broadcast led to a significant decrease in the number of anime series released each quarter, from around 50 to fewer than 10. This reduction, combined with the inability to synchronize with overseas releases and content censorship, diminished users’ willingness to pay for memberships.
In 2019, Bilibili attempted to expand its live-streaming services by investing heavily in esports broadcasting rights and signing contracts with popular celebrities. However, despite efforts in traditional content streaming, esports, and live e-commerce, the company failed to challenge the existing market leaders. Bilibili did manage to outperform competitors in virtual streamer live broadcasts during the 2021–2022 virtual idol boom, but interest has since waned.
In 2022, Bilibili launched a content subscription service, requiring users to pay to view specific videos by content creators (UPs). It also introduced paid “classroom” videos from specialized creators to leverage the influence of these creators for monetization. Additionally, the company launched paid customization options, such as avatars and emojis, aiming to expand low-cost payment channels and boost users’ willingness to spend.
Advertising:
In 2023, Bilibili’s advertising revenue totaled 6.4 billion RMB. In the first quarter of 2024, advertising income reached 1.67 billion RMB, a 31% year-on-year increase.
Unlike other video platforms, Bilibili has adopted a distinctive advertising approach. It has committed not to include mandatory pre-roll advertisements before videos, a common practice for maximizing ad revenue on other platforms. As a result, Bilibili’s main advertising revenue comes from promotional links placed below videos and sponsored content integrated within recommended video feeds. The platform has also developed a publishing platform that serves as the primary source of advertising revenue. This platform allows advertisers to post advertisements, which content creators can select and embed into their videos, with payments processed through the platform.
Game Distribution and Publishing:
Bilibili collaborates with online game developers to distribute mobile games and acts as an agent for anime-style mobile games from Japan, Korea, and other regions. In 2023, the game business generated 4 billion RMB, a 20% decrease from 2022’s 5 billion RMB, accounting for only 18% of total annual revenue.
In 2017, Bilibili’s game division contributed 83% of the company’s total revenue of 2.5 billion RMB, with the Japanese mobile game Fate/Grand Order (FGO) being the primary driver of this success. This reliance on gaming led investors to question whether Bilibili could be financially sustainable as a video platform alone. The CEO at the time declared that Bilibili would reduce the share of game revenue in its overall income. Nevertheless, the company has continued to pursue growth in the gaming sector. In 2019, it invested heavily in promoting the exclusive release of Princess Connect, along with other games, either jointly published or co-developed, though none have matched FGO’s commercial success. Currently, the main source of gaming revenue is the exclusive release of Azur Lane in 2018.
IP Derivatives and E-commerce:
In 2023, Bilibili’s revenue from IP derivatives and e-commerce amounted to 2.18 billion RMB, less than 10% of total revenue, down from 3.09 billion RMB the previous year.
The e-commerce business primarily consists of “Member Purchase” and “Magical Draw,” an online lottery system, both selling related products of Bilibili’s own IP and from anime IPs. Bilibili previously attempted to diversify by introducing more electronic products to the “Member Purchase” platform, aiming to compete with traditional e-commerce giants, but these efforts were largely unsuccessful. Furthermore, the decline in consumer spending among younger demographics has significantly impacted e-commerce performance. As a result, Bilibili has shifted towards advertising partnerships with platforms like Taobao and JD.com, leading to a contraction in its e-commerce operations.
Competitors
For animation： AcFun(in terms of ACGN and UGC)
Both Bilibili and AcFun imitated Niconico（a Japanese video platform), with AcFun founded in 2007 and Bilibili founded in 2009. Bilibili initially benefited from the trough period of AcFun, which attracted a large number of users from AcFun.
Live streaming platforms： Douyu, Huya, and other online live-streaming platforms
In October 2019, Bilibili beat out Douyu and Huya to take the exclusive Chinese broadcasting rights for the League of Legends S-Series for 3 years.
In December 2019, Bilibili signed Feng Timo, the former Douyu head anchor.
Short-video platforms： TikTok, Xiaohongshu, Kwai, and other integrated short video platforms that combined the function of online merchants
Bilibili went live with a short video feature in 2020 to increase user growth, but it also caused some influencers to stop updating their long videos due to poor-quality short videos taking traffic and video views away from high-quality long videos.
Long-video platforms： IQiYi, Youku, Tencent Video and other online long-video platforms
IQiYi, Youku, and Tencent Video are more inclined to video players and are only tools for watching dramas and variety shows. The community attribute of Bilibili is more prominent, the high-quality videos of influencers and users' comments and pop-ups together build a quality community culture, and the sense of immersive experience is greatly enhanced.
Client
Customer evolution:
Early ACGN fan core：
The secondary community, i.e. young people who love subcultural content such as anime, manga, and games
Pan-Entertainment Content Attracts Diverse Users：
In addition to the original secondary yuan group, Station B began to attract more users interested in pan-entertainment content, including fans of music, dance, knowledge, digital, life, food, and other fields. The user groups at this stage are more diversified and the age group is gradually expanding, but the core users are still mainly young people.
High-Quality Content Attracts Professional Users:
In addition to the original fans of secondary and pan-entertainment content, B Station has attracted a large number of users with a demand for high-quality video content, including professionals and enthusiasts in the fields of education, science and technology, finance, and economics. These users are not only concerned about the entertainment of the content, but also the depth and value of the content.
User profile: Generation Z
They typically receive quality education and are technology savvy, with a strong demand for cultural products and avenues for self-expression and social interaction.
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