Musical.ly hits the right notes with international expansion
Jacob Sartorius, 14, a US national based in Reston, Virginia, spends several hours a day producing and uploading short personal videos on to Musical.ly, a video-sharing and social networking app owned by an eponymous Shanghai-based startup.
In the age of YouTube and Youku, that’s pretty standard for a tech-savvy teenager, you might think. Only, Sartorius has 15.4 million fans or followers — a social media superstar among teenagers and young people under 20, if you will.
That’s the power of young talent. Sartorius has a talent for producing 15-second personal videos that show him lip-synching to song soundtracks. Girls find him cute and charming. Through similar videos, other teenyboppers showcase their talent like dancing.
Musical.ly has made a name, and money, for itself by monetizing such talent.
Ever since its launch in 2014 with focus on users in the United States, the Chinese firm’s digital product has been a runaway success.
Louis Yang, co-founder and co-CEO of Musical.ly, claimed the app has almost 15 million active daily users and more than 150 million registered users in all.
Although it would not share details, the business earns advertising revenue. Products like Coca-cola are advertised on the app. Other sources of revenue are partnership fee from offering specific theme campaigns on the app.
Global investors love the Chinese-founded app. So far, they have poured $150 million into it, including over $120 million in the latest C round of funding in May 2016.
Now, Musical.ly wants to expand, and expand fast and wide. And square up to digital giants such as Facebook and Twitter too by diversifying into real-time or live streaming through Live.ly.
The scale of its expansion plan indicates its ambition. Having made significant inroads into the US market, Musical.ly is eyeing markets in Europe, South America, Southeast Asia and India now.
Yang said Musical.ly was also looking not just to expand internationally but to focus on facilitating localization in overseas markets. “We’ ll focus on overseas markets. After the US and Europe, we’ ll give more attention to the emerging internet mar- kets such as South America, Southeast Asia and India. The potential for growth in those emerging markets is huge.”
Yang knows a thing or two about sensing market potential early. Musical.ly’s story so far is testimony to that ability.
Inspiration for the startup came from an experiment to create an online music education product. Yang and his team wanted to make videomaking and video-sharing an entertaining experience for the users.
“After receiving over 200 very encouraging emails from the early users in the US, we realized that the format that combines music, short videos and online social networking was really making a difference.”
Soon after its launch, the app took off and kept going up, up, up, gaining tremendous popularity among US teens, topping the app store charts, rubbing shoulders with Snapchat and Instagram.
“We then decided to hold our plans to enter other markets and focus solely on the US market until the end of 2015. Then, we decided to expand to international markets,” said Yang.
The US remains the single largest national market for the startup — more than 35 percent of Musical.ly’s users come from there. Europe collectively accounts for almost 40 percent of users. The startup said 70 percent of its users are females.
The nature of its user mix in terms of gender, age, language and culture, and its wide geographical spread, have sensitized Musical.ly to challenges that entail expansion and diversification of startups engaged in digital products.
To cope with the challenges, several small teams comprising two to three people each have been designated to facilitate localization in each major market, including the US, Europe, South America and Southeast Asia. They will track hot topics and create online activities accordingly, besides providing diversified local music.
All this costs money, but is also expected to make some. Future revenues are expected from online advertising and fees collected from its partners for promotional activities.
According to app tracker App Annie, video has become increasingly popular among social networking platforms during 2016.
In March 2016, Instagram announced that it would allow users to extend their videos to 60 seconds. Facebook launched Facebook Live for its users in April 2016 to make it easier to create and share live videos. Towards 2016-end, Twitter started allowing its millions of users to create and tweet live videos using hand-held devices like smartphones and tablets.
Ma Shicong, an analyst at Beijing-based internet consultancy Analysys, said the key challenge for Musical.ly is its imminent battles with Facebook and Twitter.
“Musical.ly has targeted overseas markets from its very beginning. With abundant experience, localization wouldn’t be a big problem for it. However, due to (young) users’ limited time and attention (span), the company will face fierce competition with the two major social networking platforms.”
Yang said: “Musical.ly and Live.ly complement each other. Live.ly provides a realtime interactive experience, which is actually a great supplementary to what Musical.ly has been providing to the community. It also hugely broadens the content variety by its more flexible content format.
“We hope to become the first mobile entertainment platform that brings pop culture and young people all over the world together. On the one hand, it is the place where people meet and know interesting people globally. On the other, we are changing the entertainment-scape by re-defining the entertainment content format and enabling thousands of individuals and small studios to become great entertainers.” age consumer has, well, come of age, with consumption driving economic growth, which is projected at an annual 5.5 percent between 2016 and 2030, eventually accounting for 50 percent of the world’s second largest economy.
hina is expected to become the world’s largest consumer market in the next two to three years, said the Ministry of Commerce
We hope to become the first mobile entertainment platform that brings pop culture and young people all over the world together.” Louis Yang, co-founder and co-CEO of Musical.ly
spokesman Sun Jiwen at a news conference in mid February.
That trend is in line with China’s commitment to make economic growth more sustainable by making it more consumption-driven rather than investment- or exportbased.
Cheng Yu contributed to the story.
Contact the writer at jingshuiyu@chinadaily.com.cn