Qutoutiao Inc (NASDAQ:QTT) Q3 2019 Earnings Conference Call - Final Transcript

Dec 03, 2019 • 08:00 am ET

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Qutoutiao Inc (NASDAQ:QTT) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Sai Chi Du

able to enjoy both quality content coming from iReader as well as the personalized and enhanced reading experience facilitated by our AI platform.

On the QTT side, we have further made efforts to upgrade our content duration by establishing permanent connection to the public ID verification system of the Police Department, which allows our platform to automatically screen out the inevitable count. The result has been a determination of more than 10,000 content provider accounts since July, and the significant reduction of negative feedback in users. Additionally, there have been targeted initiatives aiming at strengthening content offerings for specific categories such as games, dancing in public squares, health, entertainment news and etc. Through our collaboration with prominent media groups in the entertainment space, we are signing up celebrities as content contributors. Our users will continue to enjoy the progress in our content offerings in terms of both richness and quality.

Content improvement is a key ingredient for better user retention and monetization. Both of our short-term and long-term retention rate in the current quarter are at least 10% better in relative terms in comparison to the first half of this year, consistent with the trend of rising time spent observed in the quarter.

ARPU trends have been muddied by the temporary suspension of Midu Novels, but if we look at QTT on a stand-alone basis, there has clearly been sequential improvement. Diversification of revenue streams is also progressing nicely, with revenues generated from games and live streaming both more than doubled quarter-on-quarter. We now have 10% to 20% of our users accessing games and around 3% of users active on live streaming on a daily basis. The significance of diversification is not just enhanced monetization potential, but also an expansion and enrichment of the overall Qutoutiao ecosystem, essentially becoming more relevant and indispensable for more people over time, and this is pulling the synergy lever to improve long-term retention rates and grow user time spent, being able to structurally increase retention both at the long and the short end, gives us confidence that we are pushing in the right direction.

We're also stepping up the monetization efficiency of our proprietary advertising platform by transitioning into an OCPC [Phonetic] system, which is supported by strong AI and data capabilities as well as close partnerships with our customers, built on mutual trust and our consistent delivery of value-added services. In comparison to the traditional CPC system, it has the benefit of further derisking advertising customers budgeting process by offering more precise and tailored traffic allocations taken into account customers overall return requirements. This allows customers to increase spending with even better results and allows us to accelerate the evolution of our ad tech, as we keep optimizing the process, enhancing our core competitive advantage and deepening our client relationships over time. With better retention and stronger monetization engine and ARPU improving, we shall see better ROI driving our business going forward.

Now on Midu, as you know, for the most part of