Japanese messaging service LINE might be available for free, but it has been monetizing successfully as LINE Corporation’s Q2 2013 earnings show.
LINE Corporation, the owner of the popular Asian message service LINE, posted JPY12.8 billion ($132.3 million) of revenue in Q2 2013, up a whopping 348.9 percent year-on-year and a 45.3 percent increase from the previous quarter. This was due to “healthy growth” of LINE and its advertising business, the company said.
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Its core business, LINE, contributed 76 percent of the company’s total revenue, standing at JPY 9.77 billion ($101.3 million), up 66.9 percent from the previous quarter — showing how the concept of in-app purchases combined with other business models can literally turn the free messaging industry into a multi-million dollar one.
LINE is not simply a messaging app — it has expanded to let users buy virtual goods through games and messaging content like stickers, which are behind its money-making capabilities.
In-game purchases were the main driver of the messaging service’s revenue in Q2 2013, contributing 53 percent in all (about $53.7 million), followed by sticker purchases at 27 percent (about $27.4 million). Sponsored stickers made up the rest of LINE’s revenue.
LINE Games platform — which lets apps and games hook into the messaging service to offer social features and game sharing — passed a cumulative 150 million downloads in June. There are currently 33 games on offer, including LINE Pop and LINE Wind, which have passed 30 million and 10 million downloads respectively.
In July, LINE passed 200 million downloads worldwide, having added 50 million new sign-ups since May and 100 million in six months. The company noted that there has been especially high growth in Japan, Thailand, Taiwan, Spain and Indonesia.
LINE Corporation is also focusing on Southeast Asia and South America as it expands. The company says it has been strengthening global marketing efforts through television commercials and joint promotions in Indonesia, Malaysia and Mexico.
The company is targeting 300 million downloads worldwide within this year. CEO Akira Morikawa says:
We will continue to actively invest in new opportunities and conduct new challenges so as to become a common piece of communication infrastructure worldwide, and aim to achieve 300 million users within 2013.
Despite being somewhat smaller than its rival messaging services WhatsApp — which boasts 250 million monthly active users –and China’s WeChat — with over 300 million downloads and 195 million monthly active users — LINE seems to have arrived at a content-driven recipe for monetary success.