China’s YY eyes overseas live streaming with $1.45B Bigo buyout

One of China’s top live streaming companies YY bought a stake and obtained the right to purchase a majority share in Bigo last June, and now the other shoe has dropped after YY fully acquired the Singapore-based startup behind live streaming app Bigo Live and short-video service Like.

That’s according to an announcement YY made on Monday, which disclosed it has bought out the remaining 68.3 percent of all the issued and outstanding shares of Bigo for a price tag of about $1.45 billion.

Bigo’s connection to YY is deep-rooted. Li Xueling, a veteran Chinese journalist who’s also known as David Li, founded YY in 2005 well before the heyday of mobile-based live streaming apps. With the intent to bring the China-tested business to overseas markets, Li started Bigo in 2016 to replicate YY’s lucrative revenue model where the platform operator takes a cut whenever viewers reward streamers with virtual gifts, which can be cashed out.

YY racked up $675 million in net revenues and a net income of around $100 million from the fourth quarter of 2018, its latest earnings report shows.

The Bigo buyout is set to be a huge boost to YY’s international ambitions as its home market has been divided up between YY itself, its spin-off Huya that focuses on esports streaming and Huya’s archrival Douyu. Curiously, both Douyu and Huya are backed by Tencent, the company best known for the WeChat messenger but is also China’s largest games publisher.

To bring the domestic rivalry into perspective, Nasdaq-listed YY recorded a monthly mobile user base of 90.4 million in the fourth quarter. Huya, which priced its U.S. initial public offering at $180 million last August, posted a monthly of 50.7 million users from the same period. Douyu hasn’t recently unveiled its size as the company is reportedly mulling to go public in the U.S., but third-party data analytics company QuestMobile put its MAU in December at 43 million.

“We are very excited to announce the completion of the acquisition of Bigo. It is an important milestone for YY group which demonstrated our confidence and commitment to the globalization strategy,” said Li of YY in a statement.

Huya and Douyu have also ventured beyond China for new growth with their respective overseas brands Nimo TV and Nonolive. In its Q4 earnings report, Huya singled out foreign markets as one area of focus in 2019 and its Nimo already enjoys having a powerful ally, Tencent, which signed an agreement last July to help it with gaming content and brand recognition.

nimo tv

Huya’s overseas brand Nimo TV

“In addition to our vigorous domestic growth, we have successfully leveraged our unique business model to enter new overseas markets,” said chief executive Dong Rongjie. “We believe we are delivering long-term value through strategic investments in overseas markets in 2019 and beyond.”

While anchoring in Southeast Asia, Bigo has debuted in over 100 countries worldwide and been in the top ten of Apple’s app store not just in neighboring countries like Vietnam and Cambodia but also in Paraguay, Yeman and Angola, according to data collected by app tracking service App Annie. Growth in India has been particularly strong this year as the country captured 32 percent of Bigo’s 11 million new Android users who downloaded the app via Google Play between January and February, according to data provided by SensorTower.

Li estimated in 2017 that Bigo was generating an annual revenue of $300 million at the time. Bigo claims 200 million registered users to date with MAUs reaching almost 37 million worldwide. Its popularity has, however, gone hand in hand with its reputation for hosting offensive content, but the startup has assured it deploys resources to closely screen content. Back in China, YY, Huya, Douyu and the likes are constantly grappling with the government’s tightening grip over online information, which puts the burden on media companies to keep a robust content monitoring team to not only rid illegal videos but also parse the country’s opaque definition of what’s considered “inappropriate”.

Update (March 5, 2019, 13:00pm): Added details on Bigo’s growth and Huya’s overseas expansion

YouTube is closing the gap with Twitch on live streaming, report finds

Twitch continues to dominate the live streaming market, with approximately 2.5 billion hours watched by viewers in the third quarter of 2018, according to a new industry report out this morning. While YouTube still trails, it’s begun to close the gap with Twitch, it appears. YouTube’s live streaming platform, YouTube Live, started the year with 15 percent of the overall live streaming market’s viewership, but by September 2018, it had grown to roughly 25 percent of all live streaming hours viewed.

These findings, and more, were the subject of a “state of the industry” report released today by StreamElements, which also dug into what’s making these live streaming sites tick.

Of course, Twitch is still the market leader, with around 750 million monthly viewers, on average, who watched over 813 million hours in September. YouTube Live, by comparison, saw over 226 million hours that month, and Microsoft’s Mixer saw just 13+ million.

Also of note is that Twitch’s growth is now coming from the long tail, the report claims. Its top 100 channels haven’t grown much since the beginning of the year – in fact, they’re down a bit, according to the findings. In January 2018, viewers watch around 262 million hours on the top 100, which dropped to 254 million in September.

In addition, Twitch is growing viewership thanks to its expanded focus outside of gaming content. IRL streaming – meaning, watching creators “in real life” going about their day, vlogging, or participating in other activities, for example – is now one of the site’s most consistently growing categories, with 41 million more hours watched in Q3 2018 than in Q1.

This growth likely impacted Twitch’s recent decision to do away with the overarching “IRL” category to instead break down the content into subcategories like music, food & drink, ASMR, beauty, and more, and other organizational changes to its site.

StreamElements also claims that game streams and other content – but not the competitions known as “esports” –  are what’s attracting viewers.

Esports viewership now makes up 9 to 17 percent of overall Twitch viewership, the report says. (This is consistent with findings Newzoo has reported in past years, as well.)

The report’s data, however, is not first-party – it comes from StreamElements’ position as a production and community management solutions provider for live streamers, which allows it some insight into live streaming trends. The company also partnered with streaming analysts StreamHatchet to compile this report, it says.

That being said, it’s not the only one to point to YouTube’s more recent growth. In StreamLabs’ Q2 report this year, it also found that YouTube’s live gaming streams were on the rise, as was viewership. But StreamLabs tends to look at concurrent streams and viewership, so it’s not a direct comparison.

YouTube recently did away with its standalone YouTube Gaming app, and incorporated gaming content more directly into its main site. This could impact its future growth even more than is reflected in this Q3-focused report.

Finally, the report also found that Fortnite’s popularity may have peaked – it’s still the most watched game on Twitch, but since reaching over 151 million hours watched in July, it’s been shedding viewers. The game saw 20 million fewer hours viewed in August, then dropped by another 25 million hours in September.