Chinese internet giant Tencent announced its financial report for the second quarter of 2022 on August 17. As of June 30, the combined monthly active accounts on WeChat and its overseas version totaled 1.2991 billion. The report also mentioned that the total usage time of WeChat Video Channels, a content recording and creation sub-platform, exceeded 80% of total usage time of WeChat Moments, a social network feature within the app.
Total visits of WeChat Video Channels increased by more than 200% year-on-year, while video visits recommended by artificial intelligence increased by more than 400% year-on-year. Additionally, the number of daily active content creators and daily average video uploads increased by more than 100% year-on-year. At the same time, WeChat Video Channels held a series of popular live concerts in the second quarter of 2022, each of which attracted tens of millions of viewers.
According to the financial report, Tencent‘s revenue showed negative growth for the first time. Net profits dropped by 56%, and the growth of gaming, advertising and enterprise-oriented businesses all slowed down. As a result, the WeChat Video Channels launched in January 2020, which is still growing positively, have become a key “hope.”
Tencent mentioned in its financial report that the commercialization of WeChat Video Channels, especially information flow advertising, is considered “an important opportunity to expand market share and improve profitability.” In the second quarter, the revenue of the online advertising was 18.638 billion yuan ($2.74 billion), down 18.4% year-on-year.
At the 2022 Q2 earnings conference call, Pony Ma, Chairman and CEO of Tencent, emphasized that the company will focus on improving business efficiency and increasing new revenue sources, “including launching information flow advertising in the popular WeChat Video Channels.”
In fact, WeChat Video Channels have seen two important commercialization measures. On July 18, the firm announced the feature’s access to information flow ads. On July 21, it launched a “WeChat Video Channel Shop” feature.
Since April this year, more than 10 applications under Tencent, including QQ Tang, Kandian Express, Sogou.com and Kandian, have been shut down one after another. As cited by domestic media outlet Huxiu, some insiders close to Tencent said, “Tencent in this year is to reduce costs and increase efficiency. The obvious manifestation on its business is naturally the shutdown and transfer of some products.”