NHN Corp's Line mobile messaging service will introduce new video, e-commerce, and music services later this year. The new services will follow Line's successful rollout of a games platform that has helped Line grow to 230m users.
Line's plans include:
- Line Music will be integrated into the main Line app, allowing users to listen to music while chatting or gaming with friends. Line plans to make the service available outside Japan, but it has not revealed specific details about the price or nature (downloads, streaming etc.) of the service.
- Line Mall will introduce a new retail experience enabling users to buy and sell goods within a Line mobile marketplace.
- A new lineup of games, including Sega's Sonic Dash, will join Line's already popular game titles Line Pokopang, Line Pop, Line Play, and Line Bubble.
- Line will also match services offered by WeChat, Tango, Viber, and Facebook, and roll out video-calling.
Line's latest plans underscore how messaging and communications apps must look beyond simply providing communications to improve monetisation and grow their audience. The initial success of such over-the-top (OTT) communications apps helped undermine and further commoditise mobile operators' core communications businesses by offering extremely low cost or free services. This commoditisation now extends into the OTT messaging market with numerous OTT messaging apps competing hard for users.
To grow revenues, messaging and communications apps should offer complementary content and services, but these must not undermine or detract from the core communications experience which ties their audience together.
Revenues have been growing for Line using this strategy. It reported 349% year-over-year growth to reach JPY 9.8 billion revenues ($99.3m) for Q2 2013, boosted by its successful games strategy. Games have driven strong revenue growth for KakaoTalk in Korea, which claimed more than $300m games related revenues by Q2 2013. Line's expansions into new content services will however impact profitability. Online and mobile music and retail services are both low margin business in comparison to the lucrative mobile games industry.
Line's total audience of 230m lags behind competing messaging apps such as WhatsApp and WeChat - which each claim over 300m users, but in terms of total users Line remains ahead of leading South Korean service Kakao Talk and US-based Tango and Viber. This large communication audience provides the foundation for Line's revenue generation from complementary content and services including games.
International expansion is a major focus for Line. It supports 17 languages and it has found success beyond its core Japanese base in, Taiwan, Southeast Asia, the Middle East, Spain, India, and South America. Its Line-branded camera, card, and gaming apps have been downloaded more than 290 million times.