Good day, welcome to the Bilibili 2020 Third Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Juliet Yang, Senior Director of Investor Relations. Please go ahead.
Thank you, operator. Please note the discussion today will contain forward-looking statements relating to the company's future performance and are intended to qualify for the safe harbor from liability, as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion. A general discussion of the risk factors that could affect Bilibili's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligation to update forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purpose only.
For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the 2020 third quarter financial results news release issued earlier today. As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on Bilibili's investor relations website at ir.bilibili.com. Joining us today on the call from Bilibili senior management are Mr. Rui Chen, Chairman of the Board and Chief Executive Officer, Ms. Li Ni, Vice Chairwoman of the Board and Chief Operating Officer, and Mr. Xin Fan, Chief Financial Officer. I will now turn the call over to Mr. Fan, who will read the prepared remarks on behalf of Mr. Chen.
Thank you, Juliet. Thank you to everyone for participating in our 2020 third quarter conference call. I'm pleased to deliver today's opening remarks on behalf of Mr. Chen. We see a golden opportunity to expand our reach in today's market. To seize this window, we step up our approach to user growth. With a focus on further growing our content, expanding our brand awareness, and targeted channel acquisition. This was especially fruitful in our third quarter peak season. As a result, our user base hit a record high. In August, our MAUs exceeded 200 million milestones, marking a new monthly record. Total MAU for the third quarter were up 54% to 197 million, and DAU were up 42% to 53 million, both on a year-over-year basis. Mobile users also continue to grow at a faster pace.
Mobile MAUs were up 61% year-over-year to 184 million in the third quarter. Our users are highly engaged, spending an average of 81 minutes per day on our platform, making Bilibili one of the stickiest video community in China. The quality growth of our users is not only reflecting the high engagement levels, but also in the paying user conversions. MPUs were up 89% year-over-year, reaching 50 million in the third quarter, and our paying ratio improved to 7.6% from 6.2% in the same period last year. This increase did drive our top-line expansion in the third quarter. Revenue reached another record high of RMB3.2 billion, up 74% year-over-year. While we grow our top line, we also improved our gross margin. Gross margin was 23.6% in the third quarter, up from 18.9% in Q3 last year, and we are gaining even more operating leverage.
While Bilibili has become a household name among young generations, there are large groups of potential users who are just beginning to learn about us. The Gen Z community acts as our anchor as we begin to cast an even wider net. Today, we are gaining traction with more diverse demographics than ever before. Marketing campaigns, such as our newly introduced slogan, "Bilibili, all the videos you like," have helped us to define and promote our appeal to mass audience. During the third quarter, we launched a series of online and offline campaigns to promote our brand proposition to an even broader audience across different demographics. This strategy is working, and we are carrying these efforts into the fourth quarter. Our industry partnerships are also strengthening our content offering and brand.
In August, we entered into a five-year business cooperation agreement with Huanxi Media through a strategic equity investment, in which we gain exclusive broadcasting rights to Huanxi existing and upcoming high-quality movies and TV drama series. We have also entered into a three-year exclusive partnership with Riot Games for exclusive live broadcasting rights of League of Legends World Championship. This has significantly enhanced our position and brand in the important esports genre, especially during the S10 this year. In October, we deepened our partnership with Sony by signing a strategic agreement with a subsidiary, Aniplex to bring more premium anime content and mobile games to our users. This expanding alliance not only enrich our content offering, but also demonstrate that both domestic and international industry leaders have common recognition for our unique value in China's entertainment market.
While we are working to build our brand and attract more users, increasing demand for high-quality video content bodes well for capitalize on the growth prospects. China represents the largest online video population in the world. According to the CNNIC report, by the end of first half of 2020, near 819 million users in China consumed online content in video format. Faster networks and smarter hardware enable more accessible content creation and consumption. Our experience over the past decade has made us a pioneer of visualization movement. We are committed to capturing this market opportunity by further execution our growth strategy, which we believe will yield considerable return in the long run. With that overview, I would now like to provide some more color on our content, community, and commercialization activities. I will begin with a review of our content.
Our PUGV content ecosystem is the cornerstone of our business and the main engine that powers our growth vehicle. For the first quarter, we had approximately 1.7 million content creators uploading 5.6 million videos per month, representing increases of 51% and 79% respectively, both year-over-year. We continue to cultivate a nourishing soil to allow content creators to grow and flourish. By promoting originality and ingenuity, our algorithm enable the highest quality of original content to quickly gain traction and expand its fan base. In the first quarter, the number of videos that achieved 1 million video views increased 73%, and the number of content creators with over 10,000 followers grew 75%, both year-over-year. Meanwhile, we continue to help our content creators embed monetary rewards through our Charging Plan program and our newly launched advertising platform, Sparkle.
The matchmaking platform is designed to better connect advertisers and content creators and bring more commercial opportunities to our creators by providing a safe and a scalable platform for native ads. Each of these components help us maintain and grow this important PUGV ecosystem. Our top five verticals in terms of video views in the third quarter were lifestyle, game, entertainment, anime, and tech and knowledge. Among these, tech and knowledge is emerging as one of the fastest-growing sectors. Learning on Bilibili is also trending, and many curious minds are attracted to our platform looking for informative and educational content. In the past 12 months, there were nearly 100 million users across different age groups watched knowledge-related videos on Bilibili, making us one of the top learning platforms in China. While we enhance our content offering in our leading verticals, we are actively expanding our content reach in new categories.
The automotive sector was one of them. In Q3, video views in this genre grew rapidly at 177% year-over-year. This reflects our longevity and the staying power with users as they mature. In this case, our current daily users have come to a life stage for auto consumption. This transition also help us attract wide demographics and open new advertising opportunities across broader industry groups. Turning to our OGV, our investment in IP content is paying off. With our stronghold in this genre, Bilibili-produced Chinese anime not only attract massive new users, but also become the most effective driver of premium memberships. This is especially true for our self-produced Chinese anime, "Carp Reborn Yuan Long," generating 260 million views in just the three months since its launch.
In September, we were excited to welcome the thrilling TV drama, Run for Young, to our platform, marking the first TV drama to form our collaboration with Huanxi Media. This show was an immediate hit after release and trended number one on Bilibili most searched list for weeks. This show has generated 410 million video views, setting a new record in this category. We are also reaching new heights for our documentary and variety show department. Our very first self-produced musical variety show, Rap for Youth, received outstanding reviews beyond our typical community, generating approximately 410 million video views and 8.2 million bullet chats. This success not only enrich our music category, but also attracted and inspired a great number of musicians and music lovers. Looking at documentaries, we believe our recent agreement with BBC Studios is a strong endorsement of our documentary quality and will further enhance our content library.
Also, building on the success of last year's gala, we'll be arriving another smashing New Year's Eve gala event. We expect this year will bring our community more excitement and joy. Turning to our community, while our user growth continued to rise, we set a number of new records across our key community metrics. In the third quarter, our daily video views reached 1.3 billion, up 77% year-over-year. Our users generated 5.5 billion monthly interactions through bullet chats, comments, likes, and Bilibili Moment posts, up 117% year-over-year. The number of our official members is also on the rise. At the end of third quarter, we had 197 million official members who passed our 100-question exam, up 56% year-over-year. Retention levels also remain strong, well above 80%.
With a decade of experience under our belt, we believe our community remains one of our biggest competitive advantages and moats in the evolving online entertainment industry. Turning to our commercialization progress. The growing traffic on our platform fuels each of our business lines as well as we roll out more premium content and services to meet our users' diverse entertainment needs. Our game business. Revenue for our mobile game business was RMB 1.3 billion, up 37% year-over-year, accounting for 40% of our total revenues. Building our massive game lover base, we continue to expand our game offering in diverse genres as we maintain the popularity of our existing titles. Our new blockbuster game, Princess Connect! Continue to resonate with our fans and attract new users. It's what another strong testament that our robust distribution and operating capabilities in the ACG genre.
In October, we renewed our exclusive FGO license with Aniplex and celebrated the game fourth anniversary. Additionally, we launched a few new titles during the third quarter, which include [inaudible] , [Non-English content], and [inaudible] , [Non-English content] , all of which have been well-received by our users. For our game pipeline, we have 10 titles in diverse genres that have acquired approvals and are ready to be released in the coming quarters. Next in queue is Sword Art Online [Non-English content] , planned for launch at the beginning of 2021. Looking at our jointly operated games, we continue to work with the leading game developer to bring our user premium titles. Our solid reputation, strong game operation capabilities, and high destiny gamers demographic have made Bilibili the go-to platform for jointly operating partners.
In September, as the main Android partner in China, we began jointly operating the highly anticipated Genshin Impact [Non-English content] . The massive success of [Non-English content] and our operation is another feather in our cap. Other near-term joint titles include a plan to distribute Harry Potter: Magic Awakened. Turning to our VAS business. Revenue from VAS increased by 116% year-over-year, reaching RMB 980 million in the third quarter. Our growth was mainly driven by increased contribution from premium memberships, live broadcasting, and other value-added services. As our brand name continues to spread, we are attracting premium partners and live broadcasting hosts and adding new and diverse content to our growing library. Esports is a primary example. Our League of Legends World Championship live broadcasting right has secured important place for Bilibili in serving Esports genre.
As we showcase our capabilities, more esports hosts and lovers are turning to Bilibili immersive live broadcasting experience. For the entire S10 championship season, total live broadcasting page views related to the game increased by over 300% compared with S9 last year. We're pleased to see our user growing willingness to pay for advanced or exclusive access to our OGV content. By the end of the third quarter, we had 12.8 million premium members, up 110% year-over-year. As we roll out more excitement, exciting content, we are confident we can continue converting more paying subscribers. Our advertising business. Despite challenging market economics and environment, we delivered another accelerated growth in our advertising business. Revenue from the segment reached RMB 558 million, up 126% year-over-year. Our efforts to spread our brand name not only attract wider user groups, but also impress many new business partners.
Advertisers across different industries are turning to Bilibili to tap into the converted young demographic. Our top five leading verticals in the first quarter were e-commerce, food and beverage, games, PC products, and automotive. In summary, we are on an excellent growth trajectory. With solid execution of our user growth initiative, we continue to improve our brand equity and reach new heights across key user metrics. The industry trend towards visualization is working strongly in our favor as we provide the most unique community experience to both content creators and users. Capitalizing on this momentum, we aim to further grow our brand, enrich our content offering, and unleash the great potential of our expanding online entertainment ecosystem.
This concludes Mr. Chen's remarks. I will now provide a brief overview of our financial results for the third quarter of 2020. Our total net revenues increased by 74% year-over-year, RMB 3.2 billion, exceeding the high end of our guidance. With our non-games accounting for 60% of the revenues, we are pleased with the commercialization progress of our non-game offerings and our ability to convert our online traffic into paying users. The average number of monthly paying users increased by 89% year-over-year, reaching 50 million in the third quarter. Cost of revenue increased by 63% year-over-year to RMB 2.5 billion. Revenue sharing cost, a key component of cost of revenues, were RMB 1.2 billion, a 77% increase from the same period in 2019.
Gross profit increased by 117% year-over-year to RMB 762 million. We are seeing more operating leverage from our diversified revenue stream. With more revenue contribution from our higher-margin business as well as additional income from paying users, our gross profit margin continued to improve, reaching 23.6% in the third quarter. Total operating expenses increased to RMB1.8 billion, up 138% from the same period of 2019. Selling marketing expenses were RMB1.2 billion, representing a 227% increase year-over-year. The increase was mainly attributed to the increased channel and marketing expenses associated with our app and brand, as well as increased expenses for our mobile games and sales and marketing personnel.
Building our brand appeal among the broader audience is one of our key initiatives in 2020. This strategy is affording us far-reaching market gains that we think will have long-term efforts. We plan to continue to build on this momentum to further strengthen and expand our virtuous growth cycle. G&A expenses were RMB253 million, representing a 55% increase year-over-year. The increase was primarily due to increased headcount in general and administrative personnel and increased share-based compensation expenses. R&D expenses were RMB401 million, representing a 62% increase year-over-year. The increase was primarily due to an increased headcount in research and development personnel.
Net loss were RMB 1.1 billion for the third quarter of 2020, compared to RMB 406 million in the same period of 2019. Adjusted net loss, which is a non-GAAP measure that excludes the share-based compensation and amortization expenses related to intangible assets acquired through business acquisitions, were RMB 990 million compared to RMB 343 million in the same period of 2019. Basic diluted net loss per share were RMB 3.08. Adjusted basic diluted net loss per share were RMB 2.76. As of September 13, 2020, we had cash or cash equivalents, term deposits, as well as short-term investments of RMB 14.1 billion, or $3.1 billion, compared to RMB 8.1 billion as of December 31, 2019. Our monetization capabilities continue to improve as we leverage our growing traffic base of users across an increasing broader spectrum of demographics.
We will also continue to roll out more premium content and services to convert more paying users. We believe that over the longer term, these monetization efforts, high-paying user conversion rates and scale will yield and improve bottom line. With that in mind, we are currently projecting net revenue for the fourth quarter of 2020 to be between RMB 3.6 billion and RMB 3.7 billion. Thank you for your attention. We would like now to open the call to your questions. Operator, please go ahead.
Thank you, sir. Ladies and gentlemen, we will now begin the question- and- answer session. Your first question in queue comes from the line of Daniel Shen from JP Morgan. Daniel, please ask your question. Your line is now open.
Hi, this is Alex from JP Morgan. I have a question regarding the user growth and the user profile of the newly added users. You guys have been continuing delivering very strong user growth in the past several quarters. Can you talk about the typical new user profile that you guys have acquired in the recent quarters? What exactly is the value that you offer to these guys to drive the user growth? Lastly, what's the user growth outlook into the next one to two quarters?
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Mr. Chen said the profile of the new users actually hasn't changed much compared to historical data. The average age of our users is about 21 years old, and the average age for the newcomers is about 20 years old. We see a very balanced geographic mix with about 50% of the users coming from 3rd Tier city and below. Notably, we've seen that the users above 30 is actually gradually increasing its contribution year-over-year.
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We've always been attracting our users from our content. The reason why user comes to Bilibili is that they can find what they like, what type of content they like on Bilibili, for example, animation, music, game, digital content, etc. Based on the data, we have been experienced a very fast user growth. On the quality side, we've also maintained a very high quality of growth based on the users' retention, their engagement, also the paying conversion rate. We are quite happy and satisfied with our high quality growth.
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We have a very healthy self-sustaining ecosystem, which is our massive content creators continuously creating high quality content. We are quite optimistic about the user growth trend as we look into the future. Visualization is an inevitable trend that Bilibili as a pioneer in the video community industry, we are quite confident we'll continue to deliver this high quality growth.
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Mid last year, we have set a new user target, which is to reach 180 million for 2020 and 220 million for 2021. As you can see, we have already achieved this year's user target, we are also confident to achieve next year's user target in advance. We are likely to set up a refresh our new user target at beginning of next year.
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Your next question comes from the line of Yiwen Zhang from Citi. Yiwen, please ask your question. Your line is now open.
[Non-English content] Thanks very much for taking my question.
I have two questions regarding content ecosystem. Historically, Bilibili has been focused on documentary and classic drama series and movie. Now increasingly we see some premium content coming out. For example, the variety show and also the drama series, also Esports tournament for the Esports contents. Can you share your thoughts on premium OGV and long video and what role do they play within our ecosystem? The second today, if we take a step back, let's say the broad industry for short video is 100% from PUGV, where the long video, the majority of the PUGV are coming from licensed content. How do you see the middle video if we expand our user base to a much bigger level in terms of what ratio do you think it will be between PUGV and OGV, and what is the implication for content? Thank you.
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Before we get into the strategy of our OGV business, I want to reemphasize video as Bilibili's core business, which includes PUGV, OGV and live broadcasting. The brand upgrade that we've been focusing on this year is proposing all the videos you like, which actually includes short form video, long form video and mid form video. We'll continue to cultivate and reinforce our content offering video services based on users' needs. We'll also continue to invest in our OGV content.
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I would also like to emphasize that our PUGV content creator ecosystem remains the core of our business. From the engagement level and our active content creator and content submission, all these key data continue to show that we have a very strong position in the PUGV ecosystem, and the PUGV component will be Bilibili's unique advantage in running our OGV business. As we look into future, we will further to integrate our OGV content ecosystem with our PUGV content ecosystem.
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For the OGV strategy, going forward, we'll continue to focus on self-produced, self-publishing and will be on quality driven, IP driven, and will also serve our content ecosystem. We hope that Bilibili produced will be a label for high quality content, and at the same time, we'll be focusing on improving our ROI and paying conversion.
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Bilibili started to get into the self-produced Chinese anime back in 2017, and in 2018, we started getting to the documentary self-production. In 2019 into variety show self-production. For this year, we are making few attempts into the real person TV and movies for the internet users. We have already formed a very integrated methodology to how to get into certain verticals. As for now, Bilibili has already become the go-to platform for animation and documentary, and user already have the perception that Bilibili has the best in those categories.
For this year, our attempt in the TV, movie, and variety shows, for example, Run for Young and Rap for Youth, has generated a very good feedback among our users and received very high ratings across all platforms. This has been a hallmark for our attempt in tapping to new content categories. For those content, the revenue from the premium membership as well as the revenue from sponsorship and advertisement, actually, the revenue has already exceeded our expectation. We are quite confident to continue to try out more new content offerings in those categories.
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The value for OGV for Bilibili, I believe that there are several factors. One is premium memberships, advertising revenue, new user attraction, and the add-on value for our PUGV ecosystem, as well as IP generation. In the short term, we think we have already formed a virtuous cycle where the premium membership revenue and ad revenue has pretty much covered our OGV content cost. Our first three quarters this year, operating cash flow for the first three quarters for this year is positive. As for our membership, we have achieved outstanding results.
As end of third quarter, we have 12.8 million paying premium membership, which grew 110% year-over-year. The quality of those member are also high. About 80% of them have signed at the annual membership or automatic renewal membership. As for the sponsorship and advertising revenue associated with our OGV business grew 230% year-over-year. All of our key projects has become a very valuable advertising outlet source for all advertisers. In summary, we believe that OGV has a very important strategic role in our business.
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The OGV's high-quality content actually serves very well for our user growth. For example, the Carp Reborn, the Chinese anime, and Run for Young, all this latest high-quality OGV content has been attracted a lot of new user coming onto Bilibili. Once they join Bilibili, the majority of them stay on Bilibili to consume more PUGV content. Actually the new user that were attracted by those OGV, their retention is quite good.
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As for the variety shows, Rap for Youth has been a quite successful attempt for Bilibili. Despite music variety shows, or specifically rap-related variety shows, have been around the industry and there's few precedents, but we are still to make a new breakthrough in this verticals. Our PUGV content ecosystem continue to reinforce the effect and influence of the show. A lot of the derivative content were produced by our content creator.
The overall video views related to the derivative content has reached a near 300 million, which also help us to further expand into the music category by attracting a lot of music lover or musician to join Bilibili. Also for this show, we also generated quite decent sponsorship revenue and advertising revenue. Because we have an integrated product chain on Bilibili, we continue to extend the IP's value by launching new music label waves and launching a series of offline concerts relating to the show. On Bilibili, we are able to further extend and enhance the value of the IP.
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To summarize, we believe the value of the IP can be further enlarged on Bilibili ecosystem, which includes game, anime, TV, movies, merchandise, and multiple offline events. Going forward, we are looking to further integrate our PUGV and OGV content ecosystem.
Your next question in queue comes from the line of Binnie Wong from HSBC. Binnie, please ask your question. Your line is now open.
Rui Chen, Xin Fan, Juliet, congrats on an amazing set of results, also a strong outlook. I think the big points are ahead by 12%. Wondering if you can comment a bit on the competitive landscape. We're impressed to see your monetization. Advertising, live streaming, all continue in a triple digit growth. If you look at engagement here, it seems to retreat a bit. If you look at the time span, 3Q is a slight decline, 3Q usually is the strongest in the past years. DAU and AAU ratio also come down to 27%.
Anything that we should be aware of structurally, how do we see the competitive landscape among the different entertainment platforms evolve? Especially as we see some of your short video and live streaming players are also very aggressive in growing their advertising business in particular. How do you see that evolve? I understand that we have a very strong ecosystem here. I just want to hear a bit more into how you see, as these players, getting more aggressive, more capital, and then how will you see it? Thank you so much.
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As for the user engagement metrics, we actually seeing a quite positive metrics from the time spent, which is 81 minutes in Q3 compared to 79 minutes in Q2 this year. Overall community engagement in Q2 5.4 billion times versus 5.2 billion in Q2. Also the metrics from video views per user per daily is also improving. In general, we are still carrying out this high quality user growth momentum in the third quarter. As for the competitive landscape in the video business, the competitive landscape has always been fierce, whether it's competition between ABC or DEF. Bilibili around for 12 years, we have witnessed many players come and go. Most importantly, we believe the trend of visualization represents a huge market opportunity for the entire internet service industry. As a pioneer in this space, Bilibili is well-positioned to capturing this market opportunity.
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As for the advertising business, we believe the advertising value for a certain platform actually is a reflection of the user's value. On Bilibili, we have captured the best set of users in terms of time spent, in terms of user engagement as well as the user cohort. That's been backing up our advertising growth. At the same time, we continue to improve our advertising efficiencies, launching innovative ad product. That's also helping to re-accelerate our ad revenue. As our brand perception and brand power continue to increase, Bilibili has now became a must invest platform across many advertisers.
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Your next question comes from the line of Alex Poon from Morgan Stanley. Alex, please ask your question.
I'll translate my question. My question is regarding advertising business. We have seen year-over-year acceleration for a couple of quarters already. Can you share with us the drivers behind the strong growth? What's the outlook for Q4 and 2021? Thank you very much.
As Rui Chen mentioned earlier, there are a lot of fundamental changes behind our advertising revenue. First of all, Bilibili's users continue to deliver a high-quality growth. On Bilibili, about half of the young generation in China have been active on Bilibili, which is the golden cohort for brand advertisers. Also, the brand advertisers are able to build their brand perception and influence user buying decision on Bilibili. We have more and more high-quality content continue to reach mass market audiences, which allows Bilibili to become the must invest, the go-to platform for advertisers. We continue to improve our advertising efficiencies as we continue to enhance our data center platform to better support our commercialization efforts. We'll continue to roll out more innovative ad formats and ad products.
Despite the challenging macro environment, as more people think it's getting more and more tougher in the advertisement business, Bilibili are able to deliver accelerated advertisement revenue for five consecutive quarters. As we look into 2021, we'll continue to improve our overall integrated marketing capability to launch standardized and scalable integrated marketing solutions. We will continue to improve our ad efficiency on single users and focusing on improving the ad efficiency for our vertical players, continue to improve our service quality for different advertisement verticals. We'll also continue to launch innovative scenario-based commercialization methods, which includes multi-scenario, multi-screen solutions. As for 2020, we believe our advertising value has been widely recognized by our advertisers. As we look into 2021, we're quite confident to continue to carry out this positive growth momentum.
Your next question comes from the line of Lei Zhang from Bank of America Securities. Lei, please go ahead and ask your question.
[Non-English content]. Thanks management and congrats on the strong results.
Two questions. First on sales and marketing. Can you give us some breakdown for sales marketing in Q3 and what is the trend in next one to two quarters? Secondly, I want to follow up on the competitive landscape. Do you observe the short video platform actually allocates relatively higher % on mini video part? Any updates you can share with us? Thank you.
OK, let me take your first question. First of all, we have the RMB 14 billion cash reserve, and we also achieve like positive operating cash flow in the first nine months of 2020. We have very significant cash reserve that will support our investment in different areas. As we mentioned before, we pay close attention to our investment in selling marketing in terms of, for example, the cost per activation and their conversion and retention. When the pandemic will drive, we will keep doing the investment. In Q3, everyone knows that the season to acquire users, so we targeted to invest in user acquisition through different channels, including the app store, the feed ad channels and OTT channels.
We also invest in brand advertisement to promote our new slogan "Bilibili, all the videos you like". We also attend and organize some offline ACG related events in different cities during this summer. As a result, you already saw that MAU grow like 25 million quarter-over-quarter, and the [inaudible] also passed 200 million. As mentioned by Li Ni, we see very good return on the membership conversion and advertising when our users feel good. In Q4, generally it's not the season for the MAU addition, but we will not spend that much. In terms of the total sales marketing as a percentage of total revenues will be lower than compared with Q3 this year. We are really focused on the user retention and the paying user conversion in Q4.
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As for your second question, I wonder the concept of mid-form video, because we don't believe user choose to consume video content based on the length of the video, but rather on the quality of the video. It's very easy to change the length of the video, but it's very difficult to create the high quality content that users like. Whether it's long form or short form, it's probably a scenario base, but it shouldn't be a format or a product concept.
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As for Bilibili, we offer videos length range from dozens seconds to few hours. Each type of video has different audiences. For different content categories, the length also varies. For example, the music categories. Majority of the video is less than 10 minutes. For games and lifestyle, it could up to hours. I don't think it's a concept of the length, it's actually the concept of the content. At Bilibili, we are a more comprehensive general content platform. In the past couple of years, we've seen products that's focusing on providing majority short-form videos. They've experienced a quite decent growth rate. At the same time, Bilibili is also continue to deliver high quality, fast growth.
We believe any product that provides the content that fits users' needs, that caters users' interests and preferences, can win over their time. In the past 11 years, Bilibili has always been focused on the content ecosystem-driven business model, and to satisfy users' interest and need for high-quality content. This model is proven successful for us. As a comprehensive video community, Bilibili, actually, we believe, represents the future of video product, which we believe will be omni-scenario and multi-screen.
That concludes the question- and- answer session. I would like to turn the conference back over to management for any additional or closing comments.
Thank you once again for joining us today. If you have any further question, please contact myself, Juliet Yang, Bilibili Senior IR Director, or TPG Investor Relations. Our contact information for IR in both China and the U.S. can be found on today's press release. Have a great day