DouYu International Holdings Limited (NASDAQ:DOYU) Q3 2022 Earnings Call Transcript

Raphael Chen: I will translate for myself. Thanks for taking my question. My question is regarding the quarterly paying users. We noticed that this quarter experienced quarter-over-quarter decline, could management share more color on the underlying users? And can management comment on the paying user trends going forward and main contributors? Thank you.

Hao Cao: As we briefly explained in our prepared remarks, the change in paying user count was due to our decision to cancel low ROI promotion activities for new paying users. This decision was consistent with our operating strategy of lowering costs and increasing operating efficiency. Based on analysis, the ROI of our promotional activities for new users has to keep . One of promotion activities that don’t have followed up ongoing streamer and user interactions are less effective at converting new paying users into record paying users. As such, we started to better manage our paying user groups in order to improve revenue quality. We have gradually reduced for ROI promotion activities and started to focus on improving the overall quality of paying users.

We are developing and improving our revenue streams in two ways. First, we focus on maintaining core paying users to utilize our core business. For example, have always been a high quality paying user base. In addition to utilizing our effectively commercialized platform wide membership and game specific memberships. We also launched the non-monetized fans feature. This is a space where fans record their along with streamers. Activities in the future were designed to be completed over a long period of regular participation, promoting frequent fans streamers interactions and gradually cultivating pain and habits among clients. Second, we are focused on developing new business model other than the traditional model. We upgraded our platform wide membership service to provide value-added services based on streamers’ characteristics and games unique features.

The service is developing well and has already improved our revenue mix. We also work to identify further opportunities for monetization and launched game specific memberships across several gaming segments. Looking ahead, we will continue to leverage our competitive advantage of our in-depth gaming centric ecosystem to explore the potential of new and innovative business models. Thank you very much.

Operator: The next question comes from Ritchie Sun of HSBC. Please go ahead.

Ritchie Sun: Thank you, management, for taking my questions. Could you elaborate more on the platform why as well as game specific membership services. What is our progress on that and can you talk out monetization potential in the future? Thank you.

Hao Cao: Let me answer your question. As our membership service determined positive components of our non-keeping monetization model. We are actively carrying this membership to suit different user needs. Examples include our of our platform-wide membership and the team, dedicated game-specific membership services. In line with our refined operating expenses, we plan to launch customized membership services based on their needs within different segments. Platform wide membership is an important tool to maintain interaction between our streamers and users. With a monthly subscription, members have more opportunity to interact with three months in games and games special access to value-added service. This increased engagement between gamers and streamers has led to an increase in workload gifting revenue.

We kept in handling the and upgraded the members previously returned this quarter. Leading to a significant increase in renewal rates and high single sales techniques to our platform. As a way to experiment with news magazine for monetization, we also launched games that we take membership based on the spend stake nature of in-game items and game . We are currently rolling out this service amount top streamers in certain games segment and have achieved good results through what our so far. Three months to the service can be great to explore and their channel traffic increased by 15% to 6%. Our significant number of game fans were attracted to participate in the new membership. This strategy allows us to both protect new users and galvanize our inactive users promoting secure content ecosystem in the gaming segment.

Going forward, we will continue to explore commercialization opportunities based on games unit centers and launch more game-specific membership services, meaning more gaming segments. By exploring gamers in game demand we can provide our users with a richer game play experience to supplement their existing and consistent exemption on our platform. And at the same time, this new initiative to build also of more diversified revenue channels to our streamline and further promote our platform of gaming continued ecosystem. Thank you. Please next question.

Operator: The next question comes from Cathy Tang of Morgan Stanley. Please go ahead.

Cathy Tang: I’ll translate myself. Thanks to management for taking my questions. Could you help actually understand a little bit more about drivers behind shipping margin saturation in third quarter this year? Also, how should we think about the future ? Thank you.