Mobile live-streaming platform Inke recorded a substantial drop in revenue and fell into the red for the first half of 2019 as it lost ground to competition from other players such as short video platforms Douyin and Kuaishou for user time spent and livestreamer talent.
Why it matters: As Chinese mobile internet user screen time reaches saturation, online content platforms are competing intensely to gain share. This could push smaller players out of the market, research firm Analysys analyst Liao Xuhua told TechNode on Wednesday.
Details: Inke’s revenue for the six months ended June 30 dropped 34.9% year-on-year to RMB 1.49 billion, primarily caused by declining revenue from the company’s live-streaming business.
- The company posted a net loss for the first time since listing on the Hong Kong stock exchange in July 2018, reporting RMB 27.5 million in losses for the first half of 2019. The profit for the same period last year was RMB 958.4 million.
- Average monthly users rose 14.4% year on year to 29.5 million by end-June.
- Research and development expenses surged 79.6% year on year to RMB 153.0 million as the company sought to enrich its interactive entertainment services amid slower industry growth.
- Streamer costs for the first half of 2019 dropped 33.4% to RMB 909.4 million as livestream talent left the platform. This metric is a key data point because talent drives revenue growth, Liao said, and the sharp dropoff signals troubles for the platform.
Context: Inke’s performance following its IPO was lackluster in 2018 as it struggled to stand out in China’s live-streaming industry due to the lack of differentiating features.
- Similar issues plagued and eventually crushed game live-streaming platform Panda TV, which announced its bankruptcy in March 2019, and general live-streaming platform Quanmin Live, which went out of business in November 2018.