Tencent officially launched an online Karaoke service, Just Wanna Karaoke, which began public testing in May. It is developed by 91KGE, a music game development company, and Tencent calls it a social game. It’s, however, no more than a combination of YY Music and Changba.

YY Music is an online live music show platform that sells virtual gifts to audiences to buy for performers. Changba is a mobile Karaoke app that recently started selling virtual gifts as well. Two months ago YY Music launched a major update of its mobile app that added live video broadcasting. YY is trying to expand from music to other forms of performance, such as oral storytelling, as well. Changba, starting with audio only, began supporting videos recently.

It is believed that eventually the two forms of services will become one, no matter it is on PC or mobile, with audio or video, through singing songs or giving talks. It may be called online show business.

Apart from virtual sales, it is estimated that revenue sources will include chart slots, offline concerts or other events, among others. Platform operators just take revenue cuts.

9158 is recognized as the first that, inspired by a Korean product, developed such a service in China and proved it’s such a lucrative business. So far the market has been crowded, with players including 6.cn, Kuwo, 51.com, Guagua. It is reported that Baidu is also developing one and will release it in one month.

CEO of 9158 Fu Zhengjun estimated the market could be no bigger than two billion yuan. But it seems its peers believe the market can be bigger. YY Music platform generated RMB116.8 million (US$18.8 million), a 245.9% growth, in the first quarter of 2013. It is estimated a couple of other companies have made more money than YY Music has.

Tencent knows one or two things on online virtual sales and social games.  Tencent also has a long history of selling virtual items. QQ Show, a virtual avatar business, was one of the first revenue sources of Tencent’s. When Happy Farm, a social game, became a hit on Chinese social networks such as Renren and Kaixin001, Tencent copied one and launched it on its own social platform Q-zone. Thanks to its huge user base, the clone of Happy Farm became a big success for Tencent and generated revenues from virtual sales for much longer time than those for other social networks. QQ Pet is another successful social game from where Tencent made tons of money on virtual items. Today the company, with more than half of the total revenues from online games, is more experienced in operating games.

Tracey Xiang is Beijing, China-based tech writer. Reach her at traceyxiang@gmail.com

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