Mobile messaging applications might be available for free, but an increase in in-app purchases and other business models has turned the industry into a multi-million dollar one. Proof of that comes as popular Asian message service Line revealed revenue of 5.82 billion yen ($58 million) for the first quarter of 2013.
The figures are Line‘s first financial results since being spun off from parent company NHN Japan in February, and its income during the January-March 2013 represented a whopping 92 percent increase on Q4 2012.
The company actually released details yesterday in a Japanese-only statement. Given that we are talking financials, we contacted the firm for an English version — to rule out any inaccuracies — and the results are impressive.
Line passed 150 million registered users last month, and the company makes it money in a number of ways.
In-app payments and other revenues from the company’s Line Games range — social games that users can play together via Line — accounted for around half of all income. While revenue from stickers (a form of rich emoticon) was 30 percent, that’s just over $17 million.
Line doesn’t reveal the specifics of the remaining income nor its profit levels, but it did say that revenue official accounts and official stickers — which are used by third parties and advertisers — is one element that made up the remaining 20 percent of its sales.
Currently Line offers around 191 different types of stamps, while its gaming platform — which passed 100 million cumulative downloads earlier this year — includes 24 titles. The firm says that, across Japan, Thailand and Taiwan, there are 92 official accounts with “overall growth expanding at a steady rate”.
Line was first developed in Japan and, while it has grown worldwide with particular success in Southeast Asia and Spain — and it has big plans for Latin American and the US — Japan remains its core market. Its home country accounted for 80 percent of quarterly income.
That means that the service made around $11.6 million from its international user base during Q1 2013. That’s around and about $130,000 per day from non-Japanese users alone. As the service continues to focus on breaking the North American market, and make further inroads into China, Europe, Latin America and Africa, that international user revenue number is sure to grow.
Line’s success also demonstrates the potential for messaging apps to monetize their larger user bases. WhatsApp has around 200 million active users per month — Line’s active user number is not disclosed — but the company draws money only from its $0.99 annual subscription.
If WhatsApp were to adopt a more content-led business model — speculation out of Korea recently suggested it has explored the option of gaming at some point — then it would likely see its revenue grow significantly. The only question, is whether its users prefer the service as the simple app that it is right now.
As for Line’s plans. The company is committing to expanding its content services to include shopping, music and more games. The firm says it will increase its marketing in Asia, Spain and Latin America this quarter, so we’ll watch eagerly for its next set of results.
Headline image via ThinkStock, Chart via Line
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