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The explosive effect created at the beginning of the year of pan-entertainment content centered on web content, live broadcast, and short video is still continuing.
On December 15, TouchPal announced its third quarter 2020 financial report. The financial report shows that TouchPal’s Q3 revenue reached 110 million US dollars, a year-on-year growth of 238%. After breaking through the $100 million revenue milestone in the first quarter of this year, TouchPal's revenue scale has achieved a year-on-year growth rate of more than 100% for three consecutive quarters, and the total revenue of the first three quarters has exceeded the full year of 2019.
This growth momentum shows that TouchPal's content ecological strategy with web content, scene-based content applications, and casual games as the core is the right path.
Contrarian growth under the competition of online literature
After the huge traffic explosion in the first quarter, the online literature market has entered an era of inventory competition.
According to Analysys' analysis "China Mobile Reading Market Insights in the Third Quarter of 2020", the number of active reading users of China Mobile in Q3 2020 reached 396 million, a decrease of 1.08% from Q2. At the same time, "Insight" also pointed out that the first-tier manufacturers in the industry are relatively stable, the gap between the second-tier manufacturers is gradually widening, and the industry Matthew effect is intensified.
However, this fierce competition has not hindered the rapid growth of TouchPal’s web products. The financial report shows that the average DAU of Q3 TouchPal’s web-text products reached 10 million, an increase of 4 times compared to 2 million in the same period last year; the average MAU reached 29.5 million, an increase of 168% compared to 11 million in the same period last year.
It is also worth noting that TouchPal’s core web product-Crazy Novel. The financial report disclosed that the average daily time spent by its Q3 users increased from 110 minutes in the second quarter to 130 minutes in the third quarter, an increase of 18% from the previous quarter.
The rapid growth of Crazy Reading Novels is the epitome of the growth of TouchPal’s web-based products. This web-based product, which was launched only last year, has been among the first echelon of the web-based track as early as the first half of this year. QuestMobile mentioned in the "China Mobile Internet 2020 Semi-annual Report" that the advantage of Crazy Novel lies in its exclusive self-made content and AI self-developed technology.
In general, Q3 TouchPal’s web-text products still maintained a considerable growth rate, and it was in the context of intensified competition on the web-based track. This strong contrast shows that TouchPal’s web-text products are already on a stable and rapid growth track and have formed a significant growth inertia.
Continue to develop original content ecology under the tide of self-made
Making efforts to produce original content has become a consensus on the current pan-entertainment content track. Whether it is online texts, live broadcasts, or short videos, the current major players are seeking originality and self-made content production, such as adapting film and television dramas based on online text IP, and cultivating their own MCN institutions by giants.
The development of original content ecology is also the main reason for TouchPal's third-quarter growth of web products against the trend. The financial report mentioned that TouchPal has been rapidly developing a customized content production model to make it more competitive in terms of user stickiness.
It is reported that TouchPal has further expanded its original content ecology in the third quarter. On the one hand, TouchPal has IP-based web content and has derived other content formats such as audiobooks and video clips; on the other hand, TouchPal is still expanding the production matrix of original content. At present, the original authors signed by TouchPal have been More than 2000.
In general, the extension of the content format and the expansion of the scale of productivity were the main actions of TouchPal in the third quarter. There are two main characteristics of current web content users in terms of content demand. One is differentiation, that is, non-homogeneous content, and the other is inexhaustible content supply.
Therefore, TouchPal can take care of it and continue to meet the needs of users for different forms of content through the diversification of rich content supply, so that web products not only attract more new users, but also achieve a relatively high retention.
The insistence on original content has not only driven the growth of product users, but also allowed TouchPal’s web-text products to maintain a reliable and stable liquidity. In the third-quarter financial report, TouchPal’s web-text products and scene-based content applications together contributed 58% of mobile advertising revenue, compared with 54% in Q2.
Fine evolution of content ecology
The ecologicalization of pan-entertainment content has become the basic and long-term strategy of many giants. This year, we have seen many giants including BAT expand their product matrix through incubation or acquisition in the fields of social networking, live broadcast, web writing, short video, etc. The purpose is clear, which is to develop a more diversified pan-entertainment content ecosystem. , Leaving users in their own ecology for consumption.
TouchPal has been developing its content ecological strategy for many years. From the data of users, revenue, and investment, TouchPal's content ecological strategy has exerted obvious synergy effects, and the entire content ecological capacity and quality have been continuously improved.
TouchPal maintained this momentum in the third quarter. On the one hand, TouchPal continues to feed web products to leverage the synergy of the entire content ecosystem. According to the financial report, the management stated that it would continue to use the core advantages of web products and the continuous growth of synergy between the three major sectors to enrich the entire content ecosystem.
On the other hand, TouchPal uses technology and algorithms to iteratively upgrade, and has formed an intelligent control panel for the overall content ecology, making it more refined. Specifically, this kind of intelligent control panel includes recommending customized content for users, and recommending more content for users to meet users' increasing demand for usage time.
It is worth noting that, based on the advantages of algorithms and technology, with the help of the continuous expansion of the content production terminal, TouchPal is rapidly shifting from an entertainment marketing model to a content marketing model. The latter provides users with a steady stream of personalized content, which can firmly grasp users.
One-hand collaboration, one-hand algorithm, TouchPal's high-quality and high-precision content ecological operation strategy, has achieved remarkable results. According to the financial report, the average DAU of TouchPal's overall products in Q3 reached 27.7 million, a year-on-year increase of 16%; the average MAU reached 94.8 million, a year-on-year increase of 40%.
From fast to steady growth pace
On the whole, ensuring the sustainability of content output and catalyzing the synergy between multiple content are the core information revealed by TouchPal’s Q3 financial report. This is also the fundamental reason why TouchPal can continue to grow rapidly in terms of the number of active users and the length of user usage.
But TouchPal is actually getting more and more stable, not just rushing forward. On the one hand, this is reflected in a healthier operating model, such as approaching content marketing based on technology and algorithms, and acquiring customers in a more sustainable way. On the other hand, it is reflected in TouchPal’s monetization ability. TouchPal’s Q3 revenue is still Stayed above 100 million US dollars.
Looking around the performance of the first three quarters of this year, TouchPal's overall growth pace is transitioning from fast to steady. Facing the pan-entertainment track of oligarchs and entering the era of stock competition, it is obviously unrealistic to achieve excessive growth by burning money and cannot be maintained in the long run.
In addition, TouchPal’s choice of a more refined growth model will also help it build its own content “moat” on the giant pan-entertainment content track, thereby enhancing its long-term core competitiveness.
The pan-entertainment content track is not a day or two, nor is it a year or two to determine the winner. After the rapid growth phase is passed, the entire market will pay more attention to the sustainability of content. High-quality and sustainable content will be more attractive to users than brainless money-burning.
Obviously, TouchPal has realized this a long time ago and chose to spend more money on the construction of the content ecosystem, rather than a short-term data explosion. At present, this choice has allowed TouchPal to smoothly transition to the era of stock competition, and still maintain the expected growth rate and reliable liquidity. It is foreseeable that no matter how fierce the future track competition is, the steady growth of TouchPal will obviously be difficult to shake.
Text/Liu Kuang public number, ID: liukuang110