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Meet the Chinese live-streaming app Live.me that’s taking the US by storm

Cheetah Mobile’s app was developed around the Chinese model of ‘selfie-videos’ and online gift giving

PUBLISHED : Tuesday, 22 November, 2016, 8:49pm
UPDATED : Wednesday, 23 November, 2016, 4:03pm

Like many Chinese live-streaming apps, Live.me monetises by selling virtual items -- a unique business model pioneered in China’s billion-dollar personal live-streaming industry. But what sets Live.me apart from its Chinese counterparts like YY and Inke is that the majority of Live.me’s users hail from the US, despite the app being a product of Beijing-based Cheetah Mobile.

In fact, Live.me does not focus on its home country, instead choosing to focus on markets such as the US, the UK, Canada and Australia. Over 80.2 per cent of users come from the United States, followed by 6.9 per cent from the UK, analysts wrote in a recent report by investment research firm TH Data Capital.

Launched in April, Live.me quickly rose to popularity in the United States, especially among twenty-somethings. The app ranks within the top five social apps in the Apple App Store and is the top grossing social app on Google Play, according to data by app intelligence firm App Annie.

In its third quarter results on Monday, New York-listed Cheetah Mobile reported that revenue from its content apps such as Live.me and recently-acquired news app News Republic accounted for 4 per cent of its 1.13 billion yuan (US$164 million) quarterly revenue, or about 450 million yuan.

“When we started working on Live.me there were two questions that people would ask us. The first is whether or not the US will like this [Chinese] model of ‘selfie-videos’, and the answer is yes, they do like it,” said Cheetah Mobile chief technology officer Charles Fan in an interview with the Post.

“The second is whether or not US users want to spend money to buy gifts [like Chinese users do] and the answer is, yes, they do.”

Within seven months of its inception, Live.me has processed US$1 million in virtual gift payments to its streamers, the company said in October. Live.me users can buy virtual gold coins in-app, and use the gold coins to buy gifts like virtual lollipops and cars for their favourite live-streamers.

Over US$8.8 million worth of virtual coins were purchased and spent on live-streamers, according to data from TH Data Capital.

Although live-broadcasting was first introduced to the US market by companies such as Periscope and Meerkat, Fan insists that Live.me operates in a unique space.

“Users of apps like Periscope usually use the smartphone’s back camera to broadcast what’s happening around them,” Fan said. “Live.me is ‘selfie-video’ live broadcasting, where viewers can interact with the streamer and give them gifts, similar to YY in China.”

Fan said that Cheetah Mobile decided to launch Live.me because they noticed that live-broadcasting apps with interactions and virtual gift-giving features had taken off in China, but there was no equivalent outside of the country.

He added that while the “Copy to China” concept may have been popular over a decade ago, where Chinese companies like Baidu would replicate the business model of a successful US company like Google, times have since evolved.

“The C2C concept will continue to exist, but there is also an emerging trend where companies like us ... see some new experiences initiated in China and bring these concepts [to overseas markets],” Fan said.

In an earnings call with analysts and journalists on Monday, Cheetah chief executive Fu Sheng said that the company will continue to experiment with different monetisation models for Live.me, “including the ones that are proving to be successful in China”.

Cheetah’s aggressive content expansion strategy in the US is backed by the belief that users’ content consumption habits are not that different across regions.

“Many believe cultural differences will play a much bigger role in terms of what type of content people like to consume,” Fan said. “We believe that in the age of the internet, these differences are exaggerated when it comes to content apps [like news and live streaming].”

While some analysts believe that there is market potential for personal live-streaming to take off in the US, others say that profitability from such apps are still uncertain.

Simon Tsoi, analyst at CMB International, wrote in a research report that Cheetah Mobile’s refocusing on developed markets with apps like Live.me and News Republic allows it to “benefit from higher monetisation potential especially in the US and Europe markets.”

Neil Wang, Greater China president of research firm Frost & Sullivan, agrees, stating that the “better network establishment and connectivity” as well as “much higher per capita spending on entertainment” in the US creates significant market potential for the development of the live-streaming industry.

“We expect more China-based companies to explore the US market in the near future ... but it is still uncertain whether they would make large profits in the long term as giant social networking site players such as Facebook and Twitter are also exploring this market segment with their large user bases and strong financial capabilities,” Wang cautioned.