YY Online Broadcasting Platform Rides Momentum into Other Vertical Sectors

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liveyyYY, the online interactive video platform, reported another strong quarter yesterday. Revenues from online music show business still saw a strong growth, 228%, in the quarter that reached RMB383.1 million (USD61.6 million), thanks to a 103% year-over-year increase in paying users which has reached 1 million. 5% of paying users contributed about 70% of the revenues.

According the report released by Chinese ministry of culture (CCNT), in 2013 about half of the digital music revenues generated on PC-based Web in China was through online singing performance platforms like YY Music. YY Music has a lot of competitors, some of which reportedly are even more profitable. The CCNT report estimates that the online singing show market will reach RMB8.5 billion (about $1.4bn) in 2015.

The music show business generates money mainly from virtual gifts bought by audiences to present singers. This business model, YY said, works well on mobile too that sales increased 180% to RMB29 million than that in the previous quarter when paid virtual items were introduced onto its mobile app. 24% of paying users on its interactive platform made payments through mobile.

The YY platform has been expanding to other vertical sectors such as the red-hot online education and gameplay broadcasting.

And the live game broadcasting business saw a 630% growth in revenue, totaling RMB23.6 million (USD3.8 million), in Q1 2014. Interesting enough, broadcasters make money from virtual rewards audiences buy them, just like how singing performers encourage audiences to pay.

100 Education (100.com), a separate site for online education, was launched a couple of months ago. Different from model of the music and gameplay broadcasting, 100 Education will allow teachers to charge students in the future. Currently YY is offering free courses and materials in order to grow the user base.

YY’s other businesses didn’t perform so well. Online advertising actually saw 25% decline in the quarter. Revenues from web games grew 36%.