Bilibili inc (BILI) Q3 2021 Earnings Call Transcript

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Bilibili inc (BILI 0.43%)
Q3 2021 Earnings Call
Nov 17, 2021, 7:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day and welcome to the Bilibili 2021 Third Financial Quarter Results and Business Update Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference to Juliet Yang, Executive Director of Investor Relations. Please go ahead.

Juliet Yang -- Executive Director of Investor Relations

Thank you, operator. During this call, we'll discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion, due to a number of risks and uncertainties, including those mentioned in our most recent filings with the SEC and Hong Kong Stock Exchange.

The non-GAAP financial measures we provided are for comparison purpose only. Definition of these measures and a reconciliation table are available in today's news release issued earlier today.

As a reminder, this conference is being recorded. In addition, an investor presentation and webcast replay of this conference call will be available on Bilibili IR website at ir.bilibili.com.

Joining us today from Bilibili's senior management are Mr. Rui Chen, Chairman of the Board and Chief Executive Officer; Ms. Carly Li, Vice Chairwoman of the Board and Chief Operating Officer; and Mr. Xin Fan, Chief Financial Officer.

And I will now turn the call over to Mr. Fan, who will read the prepared remarks on behalf of Mr. Chen.

Xin Fan -- Chief Financial Officer

Thank you, Juliet. Thank you everyone for participating in our 2021 third quarter results conference call. I'm pleased to deliver today's opening remarks on behalf of Mr. Chen.

Our strong third quarter results once again demonstrated our ability to execute and deliver our growth strategy. In our peak summer season we added over 13 million MAUs to Bilibili community, bringing our total MAUs to 267 million, up 35% year-over-year. Mobile MAUs also rose to 250 million and the DAU coming at 72 million, representing growth of 36% and the 35% respectively, both on year-over-year basis. This solid growth makes us more confident than ever that we can reach our MAU growth target by 2023.

Importantly, our community is becoming more engaged and even bigger. Expanded the video content across formats, as the new reels drove an increase in users daily time spent on Bilibili, which reached 88 million in Q3. The highest we have ever seen in our operating history. This particularly impressive and it really shows the quality of our old and new users, given how fast we have grown.

Other key operating metrics also grew substantially. Daily video views were up 77% to 2.3 billion. Monthly interactions were up 86% to 10 billion. And the monthly video submissions were up 80% to 10 billion. Each of these metrics represents all-time highs and it reflects the health of our communities as well as the strength of the engine that powers our growth. Our effort to grow our user base, while maintaining a strong and a tight knit community also had a very positive impact on our commercialization program.

Total revenue in Q3 reached RMB5.2 billion, up 51% year-over-year, within the high end of our previous guidance. By matching the right content to our growing number of Bilibili users, more traffic was converted to paying users. MPUs reached 24 million in the third quarter, up 59% year-on-year and our paying ratio grew to 8.9%.

Another factor driving our top line is our increasing appeal to business partner. This is particularly true for advertisers who are eager to get visibility with the growing number of Gen Z plus users on our platform. To reach an even broader number of users, last year we defined our brand proposition with the face or the Videos You Like. Today, more users recognize and view Bilibili as the go-to destination for high quality video content. In recent BrandZ report, Bilibili was ranked as the Number 2 Most Valuable brand name in China in terms of growth rate. With increasingly recognition for advertisers across different industry verticals, our ad revenue grow by a 110% year-on-year in the third quarter, even with macroeconomic challenges.

Looking ahead visualization trend continue to surge, rapidly emerging as the preferred and the new norm. As our premium video platform with broader content and community appeal, we expect to see continued benefit from the increasing visualization movement, carrying out our solid strategy to expand our content, community and commercialization. We believe we are on the right path to becoming a valuable new gateway to the Internet.

We have also strengthened our commitment to social responsibility. Using our PowerPlus influence, we are further developing an inclusive community, promoting positive content and enacting better ESG practice.

With that overview, I would now like to walk you through the details of our third quarter operations. Beginning with the first part of our 3D model, our content. The key to our user growth lie with our [Indecipherable] unmatched PUGV. At the center of our video ecosystem, PUGVs continue to flourish, accounting for 93% of our video views in the third quarter. We have carefully created an extensive platform for high quality content creators to be recognized, appreciated and valued. We continue to improve our tool kits and the services to lower barrier of creation including our involving video editing app, Bijian as well as various creators support programs.

In the third quarter, monthly video submission is a milestone of 10 million, up 80% year-over-year. The number of monthly active content creators also accelerated to 2.7 million, up 61% year-on-year. With our continuous efforts to improve our traffic distribution mechanism, content creators can flourish and attract fans more easily.

In the third quarter content creators, with more than 10,000 followers grew by 42% year-over-year. We continue to optimize and equate new venues for them to realize their commercial value. These include our advertising measuring platform, Sparkle and the live broadcasting platform. Bringing more commercialization opportunities to content creator at all levels. Our ongoing cash incentive program is also motivating increasing number of mid-layer operator, encouraging their continuous content equation. By the end of the third quarter, 481,000 creators has benefited from this plan.

Bilibili is home to thousands of interest-based content categories and we are excited by our roadmap to keep building great new content experiences for our users in the 3rd quarter. The Top 5 populate PUGV categories of lifestyle, game, entertainment, ACG, and the knowledge continue to flourish and we welcome the more users across various demographics as emerging verticals such as fitness, food and travel are also gaining increasing interest.

In addition to expanding content category, we are also expanding our content formats to meet to user different need. For example, story mode, our short-form video content in our mobile app offers quick on the go entertainment, which is designed to fuel user fragment [Indecipherable] our Bilibili app of smart TV is the perfect solution for users seeking a high quality, high resolution, immersive video experience largest way. We are encouraged by the strong momentum in user growth and the engagement and believe there is still a lot of room to growth ahead.

For our OGV department, our OGV content reinforces our leading PUGV verticals and introduce new ones to broaden our reach and our communities [Indecipherable] leveraging both our platform and production capability, our OGVs are helping drive creators in China content. For example, Chinese NMA [Phonetic] can breathe new life into classics health in Chinese culture resonate with young generation.

In the second half of this year, we released multiple Bilibili produced animated titles including the second season of [Indecipherable] as well as the Daily Life of the Immortal King [Foreign Speech] all of which were immediately revealed by anime lovers. Similarly, our documentary and the relative shows are echoing within areas of young Chinese interest. These have achieved great success in promoting the Bilibili brand and building influence within these counter verticals.

Our self-produced match making hit 90 Hun Jie Suo [Foreign Speech] is a good example that deeply resonated with our Gen Z plus user and has even led to discussion beyond the Bilibili community. Trending on social media platforms for weeks. We also released a music variety show, The Next Banger [Foreign Speech] in Q3. The show supplements our newer music content creations and appeal to music lovers, the whole community.

In addition, we launched a series of self-produced widely welcomed full scene documentaries with more to come, including the upcoming full season of the story of [Indecipherable] [Foreign Speech], which reflects the growing interest in Chinese cuisine as well as a lifestyle category.

Turning to our community. Our community shows the quality of our user growth. In the third quarter, daily video views increased by 77% year-over-year to 2.3 billion and the monthly interactions were up 86% reaching over 10 billion. Both matrix grow much faster than expected and now user showed increasing engagement across our community. Lead interactions are essential element that make Bilibili experience so unique. At the same time, we are excited to see more casual users converging to official members by taking our unique community entrance exam. By the end of the third quarter, we grew the number of official members by 38% year-on-year to 133.6 million. For this co-user cohort the 12 month retention rate remained above 80% in the third quarter. Once again, showing the strength of our community.

Now let's look at our commercialization progress. Our diverse revenue streams have become more and more balanced, while revenue from each of our segments grew in the third quarter. Our advertising revenues have become our largest growth engine followed by our VAS and e-commerce offering.

Let's look at this in more detail. Within our commercialization segments, starting with our games. We see games as an advanced format of entertainment and representation of culture, soft power. Believing in positive power of good games, our goal is to bring users more high quality game domestically and internationally, with a heightened focus on internal development. Leveraging our deep understanding of user preference and our rich game operating experience, we are devoted to building our development capabilities for the new generation of players. At the same time, we are adamant from promoting exciting Chinese culture to large gaming work.

Looking specifically at our third quarter game performance. Revenue from our mobile games increased by 9% year-over-year to RMB1.4 billion. We added three new titles domestically to our roster of the exclusive license games, all have been well received by their followers. We also celebrated the fifth year anniversary of our legacy title, FGO in September. Additionally, we successfully jointly published more premium games, including Tencent's League of Legends and NetEase's Harry Potter. Continuing to expand game offering in diverse channels. As for our domestic game pipeline, non-games have a quite approval and are ready for domestic release in the coming quarter.

In the meantime, we are rolling out more Chinese games masterpiece to grow game market. Following our success of RE: Final Gear, [Foreign Speech] we continue to build our distribution capabilities with the successfully launched our biggest story, [Foreign Speech] in South Korea in September. The game become an instant hit and we plan to replicate this success with more games overseas by leveraging our deep understanding of ACG lovers taste, our game selection know-how and our strong distribution power. We are committed to operating responsibly to promote healthy game behavior and protecting ages from gaming addiction. As early as 2019, we launched additional measures for team players and have continued to strengthen control mechanism. By the end of August, all Bilibili operated games fully compelled [Phonetic] with the latest regulation on restriction minor game play time in China. We will also like to note that revenues from players under 18 accounted for less than 1% of game revenues in September of 2021.

Turning to our VAS business. Our VAS business is the perfect illustration of our business to consumer B2C model. It represents our users trust in our brand, and the willingness to pay for Bilibili content and services. In the third quarter, our VAS business continue to be our largest earner reaching RMB1.9 billion, up 95% year-over-year. Unlike any other live broadcasting platform, Bilibili live broadcasting have been uniquely integrated with our content ecosystem from day one. As a natural extension of video content, it amplifies our leading content verticals, as well as the influence of our content creators. We continue to enrich our live broadcasting content during the period. Providing more tools to facilitate our virtual host growth. We are excited to see the increasing influence of various game live content for our community, including League of Legend, [Indecipherable] impact. For example, we saw a record-breaking level off popularity for this year's League of Legends World Championship [Indecipherable] on Bilibili. On the final game night, the peak concurrent viewers increased by over 150% compared with S10 and we achieved the highest view ever in our operating history.

We are also diversifying with more entertainment related offering, especially for virtual uploader of VAS related content in Q3. We had triple-digit whole -- year-over-year growth in both number of active VAS and number of viewers in this category. We will continue to add and expand and strengthen our position at the world's leading virtual live broadcasting community. Thanks to our growing roster of high quality OGV as the user's tendency to pay for content. Our premium member growth was 18.2 million by the end of third quarter, an increase of 42% year-over-year. For ACG lovers, our comic and audio drama content continues to attract more paying users. Again, showing the high willingness of our users who pay for content they want. And the vast potential that offers as we add exciting new content.

As for our advertising services. Advertising represents our business to business, B2B model, and is also serving. Despite macroeconomic side our advertising revenue continued to be robust in the third quarter, reaching total advertising revenues of RMB1.2 billion, an increase of a 110% year-over-year. Our enhanced great influence and growing number of quality user function has the building block of September growth and our integrated marketing campaign covers more industry customers, the creativity and the commercial value of our content creators is gaining wider recognition. More native at videos were unveiled in Q3, making Bilibili the most sort after platform in China for advertisers. We continue to promote our integrated marketing campaign and introduce more ad products for our inventory. Helping our content creators monetize their talent. During the third quarter, our top five our target verticals were mobile game, skincare and cosmetics, e-commerce, digital products, and the food & beverage.

As we move forward, we will continue to evolve our growth strategy and create value for our stakeholders. At the same time, we are committed to shouldering our social responsibility to make the world a better place, including supporting blue whale education, disaster relief, reducing our carbon footprint and furthering growing initiatives. Moreover as a proud Chinese corporate citizen, with increasing reach we dream that one day [Indecipherable] such as games, NME and PUGV, we will be able to franchise culture across the world. This concludes Mr. Chen's remarks.

I will now provide a brief overview of our financial results for the third quarter of 2021 and outlook for the fourth quarter.

Total net revenues, post the quarter were RMB5.2 billion, up 51% from the same period of 2020. We continue to see a more balanced revenue mix driven by our diversified commercialization channel. Our total net revenues breakdown by revenue stream was approximately 27% mobile games, 37% VAS, 23% advertising, and 13% e-commerce and other business.

Cost of revenues increased by 70% year-over-year to RMB4.2 billion. Revenue sharing cost, a key component of cost of revenues were RMB2.2 billion representing 83% increase from the same period in 2020. Gross profit increased by 34% year-over-year to RMB1 billion and our gross margin was 19.6% in the third quarter.

Total operating expenses was RMB2.9 billion, up 57% from the same period in 2020. Selling and marketing expenses was RMB1.6 billion, representing a 37% increase year-over-year. The increase were primarily attributable to increased channel and marketing expenses to promote our app and brand as well as promotional expenses for our mobile games and increase in our headcount in sales and marketing personnel. Q3 is our peak season in brand marketing and user acquisition efforts. We strategically allocating more resources and are pleased with the strong momentum showing both user growth -- base growth, as well as the quality of our users in terms of the engagement level.

G&A expenses was RMB474.9 million, representing an 87% increase year-over-year. The increase were primarily due to increased headcount in general and administrative personnel, increased share-based compensation expenses and higher rental expenses. R&D expenses were RMB788.3 million, representing a 97% increase year-over-year. The increase was primarily due to increased headcount in research and development personnel and increased share-based compensation expenses.

Net loss was RMB2.69 billion for the third quarter of 2021 compared with RMB1.1 billion in the same period of 2020. Adjusted net loss, which are non-GAAP measure that is share-based compensation expenses, amortization expense related to intangible assets acquired through business acquisitions, income tax related to intangible assets acquired through business acquisition and the loss of fair value change in public trade companies was RMB1.62 billion compared with RMB0.97 billion in the same period of 2020.

Basic and diluted net loss per share were each RMB6.90. Adjusted basic and diluted net loss per share were each RMB4.16. As of September 30, 2021, we had cash, cash equivalents and term deposits, as well as short-term investments of RMB24.4 billion compared with RMB12.8 billion as of December 31, 2020. Our sufficient cash reserve gives us great confidence in ability to execute our growth strategy, which we believe will yield considerable return in the long run. With that in mind, we are currently projecting new revenues for the fourth quarter of 2021 to be between RMB5.7 billion and RMB5.8 billion.

Thank you for your attention. We would like now to open the call to your questions. Operator, please go ahead.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from the line of Alex Poon from Morgan Stanley. Please go ahead.

Alex Poon -- Morgan Stanley -- Analyst

[Foreign Speech]

My first question is regarding user growth. The user growth in Q3 has exceeded previous guidance of 260 million and also the record at the time spent has reached a record high of 88 minutes per user per day. So I wonder, management can explain what have we done in Q3 to achieve these results? And in Q4 and next year, what are our expectation? Thank you very much.

Rui Chen -- Chairman of the Board of Directors and Chief Executive Officer

[Foreign Speech]

So for all this year's principle for Bilibili to grow our user has remained the same, which is driven by very healthy content ecosystem and those content ecosystem will continuously produce high quality content to attract users.

[Foreign Speech]

So, every year we'll have evolved emphasized area. For example, last year it was all about expansion and content categories. And for this year, beside expansion of content categories we also hope to achieve expansion of consumption scenarios building a multi-scenario, multi content category video community as our goal.

[Foreign Speech]

So I have always thought that video's main battlefield is beyond just mobile phones. Although nowadays mobile phone is the main consumption scenario. However, I think as the technology evolve in such as 5G adoption and the overall hardware's evolvement, in the future, more and more screen will carry the purpose of running a video. For example, on a larger screen.

[Foreign Speech]

So right now, our OTT smart TVs MAU has surpassed our MAUs on the PC side becoming our number 2 user component. And I still think there's plenty of room for us to further [Indecipherable] in those areas.

[Foreign Speech]

So not only that we have more users on the smart TV side. Actually, the time spend on the smart TV is also much longer than the rest of the -- on the rest of the terminals.

[Foreign Speech]

Bilibili probably has the most number of video status in 4K. And that is also the reason why Bilibili's content is most suitable for those larger screens.

[Foreign Speech]

Another example would be our story mode. Within the story mode, our content creator can upload video stats in the horizontal mode, which was also well-loved by our users. And within the scenario, our user could enjoy those quick on the go entertainment content.

[Foreign Speech]

Here, I wanted to point now that in the third quarter, we not only have a fast-growing number of user base. The quality of those users are also very, very good. For example, the time spend 88 minutes is the highest we've seen in our operation history. And also, the user engagement number also experienced very fast growth. All of those indicate that we have grown with quality. That's very important.

[Foreign Speech]

Our monthly user interactions -- average monthly user interaction in Q3 has reached 10 billion milestone.

[Foreign Speech]

And also, on the paying conversion in Q3, our payees reached 24 million and our paying ratio continues to rise, reaching 8.9% in the third quarter.

[Foreign Speech]

Back in 2017, I predicted that Bilibili's paying ratio could reach double-digit, and I still believe that. Even though our users growing extremely fast, the quality of the user is also extremely high. Those users love our content and are very willing to pay for this content. We believe that in the end of the day, our -- revenue generated from our users will be faster than the increase of our users' number.

[Foreign Speech]

As for Q4's outlook, similar with our traditional seasonality, we expect Q4 seizures [Phonetic] space to be stable or a slight increase. As for our user target for 2022 we raised our three-year MAU target of 400 million users by 2023. And for next year, we will continue to execute on that strategy and to -- step-by-step achieving that target. And we're still very, very confident to be able to achieve that user goal by 2023.

[Foreign Speech]

One thing I would like to add is about our smart TV users. And originally, we thought this TV user versus our app user would have relatively higher overlap. As a matter of fact the overlap is only about 20%. And lot of the Smart TV users, are users coming from third, fourth and fifth tier city. So, this differences gives us great confidence in terms of further penetrating our target cohort, and we believe with Bilibili's vast content library and the evolving scenario, we should be able to achieve our user target.

Operator

Thank you. Our next question comes from Daniel Chen from JP Morgan. Please go ahead.

Daniel Chen -- JP Morgan -- Analyst

[Foreign Speech]

I will translate myself. My question is related to advertising, so we have seen such a strong growth in the third quarter, our triple-digit year-over-year growth. So, what's our expectation into the fourth quarter of this year and also 2020? And also, are we seeing the impact from like a weak macro environment and also data security policies? Are we seeing those implications to our advertising revenue? Thank you.

Rui Chen -- Chairman of the Board of Directors and Chief Executive Officer

[Foreign Speech]

In Q3, our ad revenue reached RMB1.17 billion, up over 110% year-on-year. This is the 10th executive quarter of beating expectation level of growth.

[Foreign Speech]

So, we have repeatedly discussed the theory of Bilibili's ad business logic, and our efforts in building our infrastructures as well as strategies in the past few quarters, which I will not going further details at this time. However, I will share some of the data and new changes we've seen so far in the fourth quarter and also in the third quarter.

[Foreign Speech]

First of all, we see continuous improvement in our ad efficiency thanks to our deep learning model's involvement, as well as the further adoption of more innovative app scenarios. The click-through rate of our [Indecipherable] improved by 30% and we expect this will further our fourth quarter and next year add revenue growth.

[Foreign Speech]

Second is we further integrated multiple app scenarios, as we have mentioned, from our mobile app, on our mobile phones, to iPad, smart TV, and PC. We continue to add new ad inventory, including ad products like inline stories and moments. And as our user continues to expand, our ad can follow.

[Foreign Speech]

The third point is on the Sparkle ad platform, we have over 150,000 content creators joined, this is up 25% year-on-year. And we also have repeated --repetitive ad customers over 75%, and Bilibili's content creator produced more and more highly creative native ad content and it's becoming the new beacon in China ad market. And we'll continue to build on that success and further to integrate on one stop solution of native ads, brand-outs, feed-outs, including our project takeoff, which all have been widely acknowledged in the ad industry.

[Foreign Speech]

And the fourth point is during this year's Singles ' Day, our daily ad GMV was over RMB25 million, ranking number 5 in terms of ad budget market share, and overall conversion ROI ranked number 1 in the space. This further proves the high quality of our user and their potential consumption power. We expect next year in the overall, our consuming advertising -- consumers at the industry will continue to raise our performances and achieve greater success.

[Foreign Speech]

And the fifth and the sixth point is -- first of all, on our ad clients, besides our traditional strong vertical like game, food and beverage, [Indecipherable] skincare, and cosmetics. We see emerging growth vertical, such as automotive, handbag and apparel are also growing rapidly. Last but not least, is on our -- we see new format of video-based ads that is also driving the improvement of our ad efficiency and forming one-stop ad solution on Bilibili. Our Q3 number shows that video-based ad is 2 times more efficient than the traditional picture and text-based ads. And we expect the ECPS will have the potential to further grow by 100%.

[Foreign Speech]

Lastly, on whether there's going to be impact of the recent data security regulations. We don't think there will be any visible impact to our app business. And we still have confidence to deliver our house the ad fast-growth in our ads segment in Q4 and in next year.

Operator

Thank you. The next question comes from the line of Brian Gong from Citi. Please go ahead.

Brian Gong -- Citi -- Analyst

[Foreign Speech]

I will translate myself. Our ecosystem, our streaming video large screening, and actually, we already have our virtual community. Bili seems to be among those few platforms in China that would explore metaverse opportunity. So, my question is that how does management see Bili's positioning in these things? And how will Bili seize this opportunity? Thank you.

Rui Chen -- Chairman of the Board of Directors and Chief Executive Officer

[Foreign Speech]

As I mentioned in an investor conference earlier this year, metaverse is a concept, it's not a product. And before this concept emerged, actually many of the elements associated with metaverse already existed. Whether it is virtual reality, a tight social community, or a system -- a social system, or self-reinforcing ecosystem. It's already existed and there are a lot of company is already -- developing products on those concepts. For example, Facebook and Tencent. And actually, Bilibili is one of them.

[Foreign Speech]

So that's why I think that if someone hears the concept of metaverse and decided to get into this business, probably would be a little bit too late. That is because those elements such as social system, self-reinforcing ecosystem, all of which cannot be done in a couple of months or even years.

[Foreign Speech]

And I believe there is a very, very important element within the metaverse concept, which is a self-reinforcing content ecosystem. When we talk about metaverse, we think this is not something that can be done by a singular company. You need to have massive content production capability to produce another world. So that's why we believe it requires someone deeply connected into this system, and through creating content they will achieve benefit hence, bonding tighter -- even tighter within the system itself.

[Foreign Speech]

And Bilibili has a very large base of content creator are creating content in Bilibili system. And they are benefiting from this creation process. That makes Bilibili the ideal platform to further explore in this metaverse concept. Actually, this is something Bilibili has always been practicing and believed in. And we have many examples that link to this concept for example, virtual off-loader. Our content creator can leverage technology like motion capture, virtuality, augmented reality. Turning themselves into another character in another world and creating content such as singing and dancing, talking jokes. All of that attacking user and make user fall in love with them. And itself, it is a perfect example of implementing the creation system into this metaverse concept.

[Foreign Speech]

When we're talking about metaverse, independent, separate universe that are attracting hundreds of millions of users who are getting attached to this. It requires way more than what we have. Now, those content creators to continuously create content and keep them attracted. And that's the exact reason why we believe the metaverse requires a self-reinforcing, deep content-creation ecosystem.

[Foreign Speech]

And Bilibili has a very outstanding and healthy content creation ecosystem. And surrounding that ecosystem, we have already attracted a tight community of over 267 million MAUs. And within that 267 million MAUs, a vast majority are the most creative, most energetic young Chinese. So that's why I do think Bilibili is probably one of the best companies to practice or to get into the metaverse business.

[Foreign Speech]

However, I do think metaverse is the concept in a longtime horizon. And it's also a future objective -- must heard a lot of discussion about metaverse, but I think it's mostly on a capital level or on the media level. I rarely heard anything on the product level, because it does require breakthrough in product and technologies. So that's why I do think this is still far ahead, but it's the future.

[Foreign Speech]

I do believe this is a very, very beautiful vision in the future. It brings elevated user experience. The scenes that we seeing in the movie Ready Player One or in the anime sort out online, this metaverse concept does bring a very beautiful experience to users.

[Foreign Speech]

I read a recent report -- media report criticizing metaverse, using examples like movie Ready Player One. However, I disagree. I believe technology is tool. It's the person that matters to make this tool to be beneficial to the society or make bad influence on the society. And metaverse represents a new choice, not a replacement of the existing reality. It's always good to have additional choice, such as the invention of television and the invention of mobile phones. It provides alternative for you to choose not to replace the old thing. And I recently visited Shanghai Auditorium that has the space museum. And actually, a lot of the scene that in the museum can be achieved in a much greater effect in virtual reality or in the metaverse. Let's imagine all those things that you're seeing in an auditorium and in the museum can be spread in the internet, allowing all the children, all the kids in China to physically see, get a touch of how the sun is looking like, how the Saturn is looking like. So, I believe that we will bring great benefit to the society. It really depends on the people itself.

Operator

Thank you. The next question comes from the line of Lei Zhang [Phonetic] from Bank of America Merrill Lynch, please go ahead.

Lei Zhang -- Bank of America Merrill Lynch -- Analyst

[Foreign Speech]

Thanks management for taking my question. My question is mainly regarding live-streaming business. Notice that we have a good performance in [Indecipherable] recently. So, looking forward, how should we look at your live-streaming business, especially in content and monetization strategy? Thank you.

Rui Chen -- Chairman of the Board of Directors and Chief Executive Officer

[Foreign Speech]

Indeed, for this year's S11, on the final game night, we have record high peak concurrent user. And our platform's DAU also reached record high in our operating history. I discussed this with our internal team and we are predicting that as Bilibili's S11 final game night is probably -- has probably the highest concurrent user in China's live broadcasting history -- Internet live broadcasting history.

[Foreign Speech]

At the same time, I wanted to emphasize that the S11 is not a one way content output. Actually, during the S11, we have massive live broadcasting hosts. It's doing S game-related live broadcasting. We also have tons of content creators, creating derivative content associated with S11. For those videos alone we have a total video play of 2.8 billion times. And all these data points support the argument that Bilibili's live broadcasting is a natural extension of our video community. And it is for -- it is forming a self-reinforcing ecosystem or a positive feedback loop within our community.

[Foreign Speech]

And years ago, investors would ask me why Bilibili would do live broadcasting. My answer was live broadcasting is not content vertical, rather, a capability, and for Bilibili is an important component of our content ecosystem, with or without S11, our live broadcasting has already deeply embedded into our video communities. For example, we see tons of knowledge, lifestyle, and entertainment-related live broadcasting, provided by our content creators. And we believe this has really integrated in our community. And live broadcasting on Bilibili is spreading its wings and making multiple times of influence and impact to our content community.

[Foreign Speech]

Again, that -- I think Bilibili's live broadcasting is actually breaking a lot of people's stereotypes about live broadcasting. While in the past, when people start thinking about live broadcasting it is showroom for eSports. However, for Bilibili's live broadcasting, our content category covers a wide array of verticals basically what content verticals we have on the video platform, we have it on live broadcasting. And most importantly, we are forcing layers of positive feedback loop in terms of content verticals and as well as our content creators. For example, our content creator in games, they can also do games-related live broadcasting. And we're also helping our content creator to expand their content creations category. For example, there's content -- there's a food content creator who is also very good at playing games. He is actually ranked in the top, a live broadcasting host in the [Indecipherable] impact content creator. And most importantly, I do believe that live broadcasting is a very healthy mechanism to help our content creator to make money. For example, to charge people from watching videos, it's kind of not a positive feedback -- it's probably not the best monetization method. But if you love a content creator so much, you would be very willing to watching his live broadcasting, buying his recommended product, or just simply tip him to showcase your appreciation and that's also the exact reason that we believe that live broadcasting is a very important component within Bilibili's community. And this chemistry that is playing in the community is creating a very benefit -- has very large benefit to all the participants.

[Foreign Speech]

As we look ahead, we will continue to implement our content ecosystem driven business model, we will continue to integrate live broadcasting with our video business, will continue to penetrate the -- two user groups, content creator, and live broadcasting host. And also, we do believe that all the video user could potentially become live broadcasting users. Secondly, that would lead to discover and develop Bilibili's unique live broadcasting category. And one of the reasons that our video platform is so successful is that we have our own unique content category, such as auto to remix and knowledge sector. Those content verticals are Bilibili's unique taste to it. And so, as what we planned for our live broadcasting business, we want to develop our own unique content categories that has Bilibili's flavor to it.

Operator

And that concludes the question-and-answer session. I would like to turn the conference back over to management for any additional or closing comments.

Juliet Yang -- Executive Director of Investor Relations

Thank you. Once again, for joining us today. If you have any further questions, please contact me. Juliet Yang, Bilibili's IR Director or TPG Investor Relations. Our contact information for IR in both China and the US can be found on today's press release. Have a great day. Bye-bye.

Duration: 77 minutes

Call participants:

Juliet Yang -- Executive Director of Investor Relations

Xin Fan -- Chief Financial Officer

Rui Chen -- Chairman of the Board of Directors and Chief Executive Officer

Alex Poon -- Morgan Stanley -- Analyst

Daniel Chen -- JP Morgan -- Analyst

Brian Gong -- Citi -- Analyst

Lei Zhang -- Bank of America Merrill Lynch -- Analyst

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