In the second quarter of this year, YY Inc., the leading user-generated live video streaming company in China, saw both mobile users and mobile revenues of their two major businesses, YY Music and gameplay broadcasting service Huya, exceeded PC. According to Eric He, CFO of the YY, the company is “in the process of transforming into a mobile company.”
In the second quarter, the company recorded 1.1 billion yuan (US$165.3 million) and 188 million yuan (US$28.3 million) in performance streaming (mostly singing) and gameplay broadcasting respectively. Like the desktop, mobile revenue is driven by the sale of virtual gifts, rather than advertising. All together, YY generated more than 621 million yuan (about US$94 million) through mobile alone in the last year.
The mobile revenue from the YY Music, YY’s largest business by revenue and usage, increased by 97 percent year-over-year, a sharp contrast to overall growth in the business, which is pegged at around 50 percent. Paying mobile users increased 88 percent year-over-year to 1.8 million.
ME, a separate mobile app YY launched in February this year for average users to live stream their everyday life, had already broken even in the second quarter, according to the company.
Tiange, another major player in user-generated live video streaming, took more than 30 percent of total revenue from mobile as of June thisyear, and expect to see that ratio hit 70 percent by year end, according to CEO Fu Zhengjun. Like their market rivals, the company shifted their business focus to mobile early this year.
Momo, the leading location-based social networking app, also saw a huge uptake in mobile users following their entry to live video streaming.
Released to all users in late 2015, Momo’s live streaming feature took only one quarter to become the company’s largest revenue stream, exceeding mobile advertising, premium subscriptions and gaming. In the second quarter, live streaming revenue more than tripled from the previous quarter.
Live streaming revenue now accounts for 58 percent of the company’s revenue, even as video streaming only accounted for around 13 percent of Momo’s monthly active users.
1.3 million paid users purchased $57.9 million USD worth of virtual gifts in the second quarter. Average revenue per paying user (ARPU) was about $45 USD, much higher than the ARPU of many mobile games in China. The ARPU range of mobile games on Tencent’s messaging platforms was between just 155 yuan and 165 yuan (about US$23 to US$25) in the same quarter.
Momo plans to add more virtual gift options for revenue generation as well as more video effects for user engagement later on.
Apart from companies that started with PC side, such as YY and Tiange, there are about a dozen standalone user-generated live video streaming apps each with more than one million monthly active users in China, according to QuestMobile, a local mobile analytics firm.
Those apps have a combined monthly active user amount of 86 million as of May this year, a 63 percent year-over-year increase.
All of them generate revenue through virtual gift sales, though the combined amount of those apps is unknown. But what’s for sure is that revenue from live video streaming will increasingly be driven by mobile.