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Zuckerberg misunderstands the huge threat of TikTok

Posted by | Apps, bytedance, Entertainment, Facebook, instagram, Mobile, Opinion, Snapchat, Social, Startups, TC, tiktok, Video | No Comments

“It’s almost like the Explore Tab that we have on Instagram” said Facebook CEO Mark Zuckerberg in leaked audio of him describing TikTok during an all-hands meeting. But it’s not. TikTok represents a new form of social entertainment that’s vastly different from the lifelogging of Instagram where you can just take a selfie, show something pretty, or pan around what you’re up to. TikToks are premeditated, storyboarded, and vastly different than the haphazard Stories on Insta.

That’s why Zuckerberg’s comments cast a dark shadow over the future of the Facebook family of apps. How can it beat what it doesn’t understand? He certainly can’t ignore it. Facebook’s copycat Lasso has been installed just 425,000 times since it launched in November, while TikTok has 640 million installs in the same period outside of China. Oh, and TikTok has 1.4 billion total installs beyond China to date.

TikTok Screenshots

TikTok

Casey Newton of The Verge today published two hours of audio and transcripts from two internal-only all-hands Q&As held by Zuckerberg at Facebook in July. His comments touch on the company’s plan to fight being broken up by regulators, especially if Elizabeth Warren becomes President. He thinks Facebook would win, but on resorting to suing the government, he says “does that still suck for us? Yeah.” Zuckerberg also describes how Facebook is working to launch a payments product in Mexico and elsewhere by year’s end as Libra deals with regulatory scrutiny.

But beyond his comments on regulation, it’s his pigeonholing of TikTok that’s most alarming. It foreshadows Facebook failing to win one of the core social feeds that its business depends on. Perhaps his perspective on the competitor is evolving, but the leak portrays him as thinking TikTok is just the next Snapchat Stories to destroy.

Zuckeberg’s Thoughts On TikTok

Here’s what Zuckerberg said about TikTok during the internal Q&A sessions, (emphasis mine):

So yeah. I mean, TikTok is doing well. One of the things that’s especially notable about TikTok is, for a while, the internet landscape was kind of a bunch of internet companies that were primarily American companies. And then there was this parallel universe of Chinese companies that pretty much only were offering their services in China. And we had Tencent who was trying to spread some of their services into Southeast Asia. Alibaba has spread a bunch of their payment services to Southeast Asia. Broadly, in terms of global expansion, that had been pretty limited, and TikTok, which is built by this company Beijing ByteDance, is really the first consumer internet product built by one of the Chinese tech giants that is doing quite well around the world. It’s starting to do well in the US, especially with young folks. It’s growing really quickly in India. I think it’s past Instagram now in India in terms of scale. So yeah, it’s a very interesting phenomenon.

And the way that we kind of think about it is: it’s married short-form, immersive video with browse. So it’s almost like the Explore Tab that we have on Instagram, which is today primarily about feed posts and highlighting different feed posts. I kind of think about TikTok as if it were Explore for stories, and that were the whole app. And then you had creators who were specifically working on making that stuff. So we have a number of approaches that we’re going to take towards this, and we have a product called Lasso that’s a standalone app that we’re working on, trying to get product-market fit in countries like Mexico, is I think one of the first initial ones. We’re trying to first see if we can get it to work in countries where TikTok is not already big before we go and compete with TikTok in countries where they are big.

We’re taking a number of approaches with Instagram, including making it so that Explore is more focused on stories, which is increasingly becoming the primary way that people consume content on Instagram, as well as a couple of other things there. But yeah, I think that it’s not only one of the more interesting new phenomena and products that are growing. But in terms of the geopolitical implications of what they’re doing, I think it is quite interesting. I think we have time to learn and understand and get ahead of the trend. It is growing, but they’re spending a huge amount of money promoting it. What we’ve found is that their retention is actually not that strong after they stop advertising. So the space is still fairly nascent, and there’s time for us to kind of figure out what we want to do here. But I think this is a real thing. It’s good.

To Zuckerberg’s credit, he’s not dismissing the threat. He knows TikTok is popular. He knows it’s growing in key international markets Facebook and Instagram depend on to keep user counts rising. And he knows his company needs to respond via its standalone clone Lasso and more.

Facebook Lasso Screenshots

Lasso

But while TikToks might look like Stories because they’re vertical videos, and TikTok might algorithmically recommend them to people like Instagram Explore, it’s a whole ‘nother beast of a product and one that may be harder than it seems to copy.

To crystallize why, let’s rewind to Snapchat. With the launch of Stories, it started to blow up with US teens. Facebook’s attempts to clone it in standalone apps like Poke and Slingshot never gained traction. In fact, none of Facebook’s standalone apps have succeeded unless they splintered off an already-popular piece of Facebook like chat and users were forced to download them like Messenger. It wasn’t until Zuckerberg stuck his clone of Stories front-and-center atop Instagram and Facebook that Snapchat’s user count went from growing 18% per quarter to shrinking. There, Facebook used the same strategy laid out in Zuckerberg’s comments — push its good-enough clone in countries where the original isn’t popular yet.

But Facebook was fortunate because Stories really wasn’t that dissimilar to the content users were already sharing on Instagram — tiny biographical snippets of their lives. Snapchat CEO Evan Spiegel had originally invented Stories as a vision of Facebook’s News Feed through the lens of an ephemeral camera. All users had to know was “I take the same videos, but shorter and sillier, posted more often, and then they disappear”. The concept of Instagram and Facebook didn’t have to change. They were still about telling friends what you were up to. Choking off TikTok’s growth will be much more complicated.

Why TikTok Is Tough To Clone

TikTok isn’t about you or what you’re doing. It’s about entertaining your audience. It’s not spontaneous chronicling of your real life. It’s about inventing characters, dressing up as someone else, and acting out jokes. It’s not about privacy and friends, but strutting on the world stage. And it’s not about originality — the heart of Instagram. TikTok is about remixing culture — taking the audio from someone else’s clip and reimagining the gag in a new context by layering it atop a video you record.

TikTok Remixes

That makes TikTok distinct enough that it will be very difficult to shoehorn into Instagram or Facebook, even if they add the remixing functionality. Most videos on those apps aren’t designed to be templates for memes like TikToks are. Insta and Facebook’s social graphs are rooted in friendship and augmented by the beautiful and famous, but don’t encompass the new wave of amateur performers TikTok elevates. And since each post to the app becomes fodder for someone else’s creativity, a competitor starting from scratch doesn’t offer much to remix.

That means a TikTok clone would have to be somewhat buried in Instagram or Facebook, rebuild a new social graph, and retrain users’ understanding of these apps’ purpose…at the risk of distracting from their core use cases. This leaves Facebook hoping to grow its standalone TikTok clone Lasso which TechCrunch scooped a year ago before it launched last November. But as we’ve seen, Facebook struggles growing brand new apps, and that effort is further hindered by its increasingly toxic brand and sheen of uncoolness. Nor does it help that Facebook must divert development resources to comply with all the new privacy and transparency obligations as part of its $5 billion FTC fine and settlement.

The Next Feed

Facebook’s best bet is to assess the future value of the ads it could run on a successful TikTok clone and apply some greater fraction of that grand sum to competing directly. It’s already made some smart additions to Lasso like tutorials for how to remix and the option to add GIFs as sections of your video. But it’s still failing to gain serious traction in the US. While typical videos on the TikTok homepage where I’m spending a few hours a week have hundreds of thousands of Likes, the top ones I saw in my Lasso feed today received 70 or fewer.

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TikTok trounces Facebook’s Lasso in the US iOS App Store charts

I had Sensor Tower run some analysis comparing TikTok with Lasso since its launch last November, and found that Lasso gets 6 downloads for every 1000 for TikTok in the US. Some more stats:

  • US Total Downloads Since November: Lasso – 250,000 // TikTok – 41.3 million
  • US Downloads Per Day Since November: Lasso – 760 // TikTok – 126,000
  • Average US Google Play Social App Chart Ranking: Lasso – #155 // TikTok – #2

Beyond the US, Lasso has only launched in one other market, Mexico in April, where it’s been faring better but could hardly even be considered a competitor to TikTok. Facebook needs to lean harder into Lasso:

  • Mexico Total Downloads Since April: Lasso – 175,000 // TikTok – 3.3 million
  • Mexico Downloads Per Day Since November: Lasso – 1,000 // TikTok – 19,000

Facebook Lasso Logo

Zuckerberg may need to find a coherent place for TikTok style features inside Instagram and potentially Facebook. That could be another horizontal row of previews like with Stories and/or a header on the Explore page dedicated to premeditated content. Certainly something more prominent than a single button like IGTV that still no one is asking for. One opportunity to best TikTok would be building a dedicated remix source browser into the Stories camera to help users find content to put their own spin on.

Facebook will also need to buy out top TikTok creators to make videos for it instead, and even quasi-hire some of the most prolific video meme or challenge inventors to give users trends to jump on rather than just one-off clips to watch. Its failure to offer IGTV stars monetization has led many to ignore that platform, and it can’t afford that again.

If Zuckerberg approaches TikTok as merely an algorithmic video recommender like Explore, Facebook will miss out on owning the social entertainment feed. If he doesn’t decisively move to challenge TikTok soon, its catalog of content to remix will grow insurmountable and it will own the whole concept of short form performative video. Snapchat’s insistence on ephemerality makes it incompatible with remixing, and YouTube isn’t nimble enough to reinvent itself.

If no American company can step up, we could see our interest data, faces, and attention forfeited to an app that while delightful to use, heralds Chinese political values at odds with our own. If only Twitter hadn’t killed Vine.

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TikTok-parent is getting into mobile search

Posted by | Apps, Asia, Baidu, bytedance, China, Google, LinkedIn, Microsoft, Mobile, Tencent, tiktok, Toutiao, WeChat | No Comments

China’s ByteDance, which owns popular video sharing app TikTok, is already working to enter the smartphone business and the music streaming space. It appears the world’s most valued startup also has ambitions about developing its own search engine. Kind of.

A company spokesperson told TechCrunch on Thursday that it has introduced a search function in ByteDance’s Toutiao news app.

“The function is in line with Toutiao’s mission of ‘information creates value.’ Users can try the function in the app and provide feedback and suggestions on the new function,” the spokesperson said.

The search function gleans information from both content on Toutiao as well as the entire world wide web, TechCrunch understands.

From the looks of it, ByteDance’s current search functionality is more alike WeChat’s in-app search function than local giant Baidu’s or Google’s offering.

On WeChat, when a person looks up a keyword, they see news articles about that topic, followed by mentions of it from their friends. This is followed by random articles about the subject. When a user clicks on any of these article or news links, WeChat serves them the page through its in-app browser, giving them no option to leave the walled-garden.

The idea is to change the way people think about — and use — a search engine altogether. And in China, where apps such as WeChat and TikTok have gained gigantic reach on mobile, it seems logical to add all new functionalities within those apps.

ByteDance’s interest in a search engine became public on Wednesday after it published a recruitment post on its WeChat account. The startup said its “search engine” is aimed at “hundreds of millions of mobile users in China.”

“We will build a universal search engine with a better user experience from 0 to 1. Only you don’t want to search, there is no [info] you can’t find, because we can search the whole network,” the company said in the post.

According to the description in the listing, ByteDance has already hired people from other search engines such as Google, Baidu, Bing and 360.

An analysis of LinkedIn listings by TechCrunch found more than 100 people from Google, Microsoft and Baidu, many of whom worked around search divisions at the previous companies, have joined ByteDance in recent quarters.

ByteDance following Tencent’s WeChat model to create its alternate search business may add more worries to Baidu, which currently holds more than 75% of the search engine market in China, according to third-party web service StatCounter Global Stat. Microsoft’s Bing is also operational in the country, though its market share remains in the low-single digits. Google currently does not offer its search feature in China — though it has attempted to change that in recent months to no luck.

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The need-to-know takeaways from VidCon 2019

Posted by | Baidu, bytedance, Cargomatic, China, digital media, donald trump, DraftKings, events, Gaming, GGV, hans tung, Influencer Marketing, Kylie Jenner, Marketing, Media, musical.ly, new media, oprah winfrey, Singapore, social networks, Startups, STEM, synthetic media, TC, Tencent, tiktok, Twitch, Venture Capital, Video | No Comments

VidCon, the annual summit in Anaheim, CA for social media stars and their fans to meet each other drew over 75,000 attendees over last week and this past weekend. A small subset of those where entertainment and tech executives convening to share best practices and strike deals.

Of the wide range of topics discussed in the industry-only sessions and casual conversation, five trends stuck out to me as takeaways for Extra Crunch members: the prominence of TikTok, the strong presence of Chinese tech companies in general, the contemplation of deep fakes, curiosity around virtual influencers, and the widespread interest in developing consumer product startups around top content creators.

Newer platforms take center stage

GettyImages 1161447217

Photo by Jerod Harris/Getty Images

TikTok, the Chinese social video app (owned by Bytedance) that exploded onto the US market this past year, was the biggest conversation topic. Executives and talent managers were curious to see where it will go over the next year more than they were convinced that it is changing the industry in any fundamental way.

TikTok influencers were a major presence on the stages and taking selfies with fans on the conference floor. I overheard tweens saying “there are so many TikTokers here” throughout the conference. Meanwhile, TikTok’s US GM Vanessa Pappas held a session where she argued the app’s focus on building community among people who don’t already know each other (rather than being centered on your existing friendships) is a fundamental differentiator.

Kathleen Grace, CEO of production company New Form, noted that Tik Tok’s emphasis on visuals and music instead of spoken or written word makes it distinctly democratic in convening users across countries on equal footing.

Esports was also a big presence across the conference floor with teens lined up to compete at numerous simultaneous competitions. Twitch’s Mike Aragon and Jana Werner outlined Twitch’s expansion in content verticals adjacent to gaming like anime, sports, news, and “creative content’ as the first chapter in expanding the format of interactive live-streams across all verticals. They also emphasized the diversity of revenue streams Twitch enables creators to leverage: ads, tipping, monthly patronage, Twitch Prime, and Bounty Board (which connects brands and live streamers).

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Alibaba pumps $100 million into Vmate to grow its video app in India

Posted by | alibaba, Apps, Asia, bytedance, Disney, funding, Google, india, Media, Mobile, Social, Startups, tiktok, Vmate, YouTube | No Comments

Chinese tech giant Alibaba is doubling down on India’s burgeoning video market, looking to fight back local rival ByteDance, Google and Disney to gain its foothold in the nation. The company said today that it is pumping $100 million into Vmate, a three-year-old social video app owned by subsidiary UC Web.

Vmate was launched as a video streaming and short-video-sharing app in 2016. But in the years since, it has added features such as video downloads and 3-dimensional face emojis to expand its use cases. It has amassed 30 million users globally, and will use the capital to scale its business in India, the company told TechCrunch. Alibaba Group did not respond to TechCrunch’s questions about its ownership of the app.

The move comes as Alibaba revives its attempts to take on the growing social video apps market, something on which it has missed out completely in China. Vmate could potentially help it fill the gap in India. Many of the features Vmate offers are similar to those offered by ByteDance’s TikTok, which currently has more than 120 million active users in India. ByteDance, with a valuation of about $75 billion, has grown its business without taking money from either Alibaba or Tencent, the latter of which has launched its own TikTok-like apps with limited success.

Alibaba remains one of the biggest global investors in India’s e-commerce and food-tech markets. It has heavily invested in Paytm, BigBasket, Zomato and Snapdeal. It was also supposedly planning to launch a video streaming service in India last year — a rumor that was fueled after it acquired a majority stake in TicketNew, a Chennai-based online ticketing service.

UC Web, a subsidiary of Alibaba Group, also counts India as one of its biggest markets. The browser maker has attempted to become a super app in India in recent years by including news and videos. In the last two years, it has been in talks with several bloggers and small publishers to host their articles directly on its platform, many people involved in the project told TechCrunch.

UC Web’s eponymous browser rose to stardom in the days of feature phones, but has since lost the lion’s share to Google Chrome as smartphones become more ubiquitous. Chrome ships as the default browser on most Android smartphones.

The major investment by Alibaba Group also serves as a testament to the growing popularity of video apps in India. Once cautious about each megabyte they spent on the internet, thrifty Indians have become heavy video consumers online as mobile data gets significantly cheaper in the country. Video apps are increasingly climbing up the charts on Google Play Store.

In an event for marketers late last year, YouTube said that India was the only nation where it had more unique users than its parent company Google. The video juggernaut had about 250 million active users in India at the end of 2017. The service, used by more than 2 billion users worldwide, has not revealed its India-specific user base since.

T-Series, the largest record label in India, became the first YouTube channel this week to claim more than 100 million subscribers. What’s even more noteworthy is that T-Series took 10 years to get to its first 10 million subscribers. The additional 90 million subscribers signed up to its channel in the last two years. Also fighting for users’ attention is Hotstar, which is owned by Disney. Earlier this month, it set a new global record for most simultaneous views on a live-streaming event.

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ByteDance, TikTok’s parent company, plans to launch a free music streaming app

Posted by | Apple, Apps, Asia, bytedance, China, india, Media, Mobile, musical.ly, Snap, Spotify, tiktok | No Comments

Does the overcrowded and cut-throat music streaming business have room for an additional player? The world’s most valuable startup certainly thinks so.

Chinese conglomerate ByteDance, valued at more than $75 billion, is working on a music streaming service, two sources familiar with the matter told TechCrunch. The company, which operates popular app TikTok, has held discussions with music labels in recent months to launch the app as soon as the end of this quarter, one of the sources said.

The app will offer both a premium and an ad-supported free tier, one of the sources said. Bloomberg, which first wrote about the premium app, reported that ByteDance is targeting emerging markets with its new music app. A ByteDance spokesperson declined to comment.

For ByteDance, interest in a music app does not come as a surprise. Snippets of pop songs from movies and albums intertwined with videos shot by its humongous user base is part of the service’s charm. The company already works with music labels worldwide to licence usage of their tracks on its platform. In China, where ByteDance claims to have tie-ups with more than 800 labels, it has been aggressively expanding efforts to find music talents and urge them to make their own tracks.

Besides, ByteDance has been expanding its app portfolio in recent months. Earlier this year, the company released Duoshan, a video chat app that appears to be a mix of TikTok and Snap. This week, it launched Feiliao, another chat app that is largely focused on text-driven conversations. At some point, the company may have realized the need for a standalone music consumption app.

When asked about TikTok’s partnership with music labels last month, Todd Schefflin, TikTok’s head of global music business development, told WSJ that music is part of the app’s “creative DNA” but it is “ultimately for short video creation and viewing, not a product for music consumption.”

The private Chinese company is likely eyeing India as a key market for its music app. The company has been in discussion with local music labels T Series and Times Music for rights. Moreover, its apps are estimated to have more than 300 million monthly active users in the nation, though there could be significant overlaps among them.

India may have also inspired ByteDance to consider a free, ad-supported version of its music app. Even as more than 150 million users in India listen to music online, only a tiny portion of this user base is willing to pay for it.

This has made India a unique battleground for local and international music giants, most of which offer an ad-supported, free version of their apps in the market. Even premium offerings from Apple and Spotify cost less than $1.2 a month. India is the only market where Spotify offers a free version of its app that has access to the entire catalog on demand.

The launch of the app could put the spotlight again on ByteDance in India, where its TikTok app recently landed in hot water. An Indian court banned the app for roughly a week after expressing concerns over questionable content on the platform. Ever since the nation lifted the ban on TikTok, the company has become visibly cautious about its movement.

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TikTok spotted testing native video ads

Posted by | ad tech, Ads, advertising, Advertising Tech, Apps, bytedance, Mobile, native ads, Social, TC, tiktok, Video, video ads | No Comments

TikTok is testing a new ad product: a sponsored video ad that directs users to the advertiser’s website. The test was spotted in the U.S. TikTok app, where a video labeled “Sponsored” from the bike retailer Specialized is showing up in the main feed, along with a blue “Lean More” button that directs users to tap to get more information.

Presumably, this button could be customized to send users to the advertiser’s website or any other web address, but for the time being it only opened the Specialized Bikes (@specializedbikes) profile page within the TikTok app.

However, the profile page itself also sported a few new features, including what appeared to be a tweaked version of the verified account badge.

Below the @specializedbikes username was “Specialized Bikes Page” and a blue checkmark (see below). On other social networks, checkmarks like this usually indicate a user whose account has gone through a verification process of some kind.

Typical TikTok user profiles don’t look like this — they generally only include the username. In some cases, we’ve seen them sport other labels like “popular creator” or “Official Account” — but these have been tagged with a yellowish-orange checkmark, not a blue one.

In addition, a pop-up banner overlay appeared at the bottom of the profile page, which directed users to “Go to Website” followed by another blue “Learn More” button.

Oddly, this pop-up banner didn’t show up all the time, and the “Learn More” button didn’t work — it only re-opened the retailer’s profile page.

As for the video itself, it features a Valentine’s Day heart that you can send to a crush, and, of course, some bikes.

The music backing the clip is Breakbot’s “By Your Side,” but is labeled “Promoted Music.” Weirdly, when you tap on the “Promoted Music” you’re not taken to the soundbite on TikTok like usual, but instead get an error message saying “Ad videos currently do not support this feature.”

Rolling through TikTok and got an ad from Specialized Bikes that just takes you to their profile when you tap “Learn more” but then brings up “video ads do not support this feature” when you tap on the promoted music track. pic.twitter.com/hBmedThVON

— Jeff Higgins (The Cool One) (@ItsJeffHiggins) February 14, 2019

The glitches indicate this video ad unit is still very much in the process of being tested, and not a publicly available ad product at this time.

TikTok parent ByteDance only just began to experiment with advertising in the U.S. and U.K. in January.

So far, public tests have only included an app launch pre-roll ad. But according to a leaked pitch deck published by Digiday, there are four TikTok ad products in the works: a brand takeover, an in-feed native video ad, a hashtag challenge and a Snapchat-style 2D lens filter for photos; 3D and AR lens were listed as “coming soon.”

TikTok previously worked with GUESS on a hashtag challenge last year, and has more recently been running app launch pre-roll ads for companies like GrubHub, Disney’s Kingdom Hearts and others. However, a native video ad hadn’t yet been spotted in the wild until now.

According to estimates from Sensor Tower, TikTok has grown to nearly 800 million lifetime installs, not counting Android in China. Factoring that in, it’s fair to say the app has topped 1 billion downloads. As of last July, TikTok claimed to have more than 500 million monthly active users worldwide, excluding the 100 million users it gained from acquiring Musical.ly.

That’s a massive user base, and attractive to advertisers. Plus, native video ads like the one seen in testing would allow brands to participate in the community, instead of interrupting the experience the way video pre-rolls do.

TikTok and Specialized declined to comment.

 

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Chinese app developers have invaded India

Posted by | alibaba, Android, Apps, Asia, bytedance, China, Flash, food delivery, india, oppo, Paytm, sensor tower, SnapDeal, Tencent, tiktok, WeChat, Xiaomi | No Comments

If you’ve conquered China, then India — the world’s second-largest country based on population — is the obvious next port of call, and that’s exactly what has happened in the world of consumer apps.

Following the lead of Chinese smartphone makers like Xiaomi and Oppo, which have dominated mobile sales in India for some time, the content behind the touchscreen glass in India is increasingly now from China, too. That’s according to a report from FactorDaily, which found that 44 of the top 100 Android apps in India were developed by Chinese companies, up from just 18 one year prior. (The focus is on Android because it is the overwhelming choice of operating system among India’s estimated 500 million internet users.)

The list of top Chinese apps includes major names like ByteDance, the world’s highest-valued startup, which offers TikTok and local language news app Helo in India, and Alibaba’s UCbrowser, as well as lesser-known quantities like Tencent-backed NewsDog and quiet-yet-prolific streaming app maker Bigo.

Citing data from Sensor Tower, the report found that five of the top 10 Android apps in India are from China, up from just two at the end of 2017.

For anyone who has been watching the Indian technology scene in recent years, this “Chinese app store invasion” will be of little surprise, although the speed of change has been unexpected.

China’s two biggest companies, Alibaba and Tencent, have poured significant amounts into promising Indian startups in recent years, setting the stage for others to follow suit and move into India in search of growth.

Alibaba bought into Snapdeal and Paytm via multi-hundred-million-dollar investments in 2015, and the pace has only quickened since then. In 2017, Tencent invested in Gaana (music streaming) and Swiggy (food delivery) in major deals, having backed Byju’s (education) and Ola (ride-hailing) the year prior. The pair also launched local cloud computing services inside India last year.

Beyond those two, Xiaomi has gone beyond selling phones to back local companies and develop local services for its customers.

That local approach appears to have been the key for those app makers which have found success in India. Rather than taking a very rigid approach like Chinese messaging app WeChat — owned by Tencent, which failed in India — the likes of ByteDance have developed local teams and, in some cases, entirely local apps dedicated to India. With the next hundreds of millions of internet users in India tipped to come from more rural parts of the country, vernacular languages, local content and voice-enabled tech are some of the key strategies that, like their phone-making cousins, Chinese app developers will need to focus on to ensure that they aren’t just a flash in the pan in India.

You can read more at FactorDaily.

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Musical.ly investor bets on internet radio with $17M deal for Korea’s Spoon Radio

Posted by | Altruist, Apps, Asia, bubble motion, bytedance, djs, Facebook, Fundings & Exits, goodwater capital, instagram, Internet Radio, Japan, korea, Media, Mobile, musical.ly, Singapore, Software, Southeast Asia, Twitter, vietnam | No Comments

One of the early backers of Musical.ly, the short video app that was acquired for $1 billion, is making a major bet that internet radio is one of the next big trends in media.

Goodwater Capital, one of a number of backers that won big when ByteDance acquired Musical.ly last year, has joined forces with Korean duo Softbank Ventures and KB Investment to invest $17 million into Korea’s Spoon Radio. The deal is a Series B for parent company Mykoon, which operates Spoon Radio and previously developed an unsuccessful smartphone battery sharing service.

That’s much like Musical.ly, which famously pivoted to a karaoke app after failing to build an education service.

“We decided to create a service, now known as Spoon Radio, that was inspired by what gave us hope when [previous venture] ‘Plugger’ failed to take off. We wanted to create a service that allowed people to truly connect and share their thoughts with others on everyday, real-life issues like the ups and downs of personal relationships, money, and work.

“Unlike Facebook and Instagram where people pretend to have perfect lives, we wanted to create an accessible space for people to find and interact with influencers that they could relate with on a real and personal level through an audio and pseudo-anonymous format,” Mykoon CEO Neil Choi told TechCrunch via email.

Choi started the company in 2013 with fellow co-founders Choi Hyuk jun and Hee-jae Lee, and today Spoon Radio operates much like an internet radio station.

Users can tune in to talk show or music DJs, and leave comments and make requests in real-time. The service also allows users to broadcast themselves and, like live-streaming, broadcasters — or DJs, as they are called — can monetize by receiving stickers and other virtual gifts from their audience.

Spoon Radio claims 2.5 million downloads and “tens of millions” of audio broadcasts uploaded each day. Most of that userbase is in Korea, but the company said it is seeing growth in markets like Japan, Indonesia and Vietnam. In response to that growth — which Choi said is over 1,000 percent year-on-year — this funding will be used to invest in expanding the service in Southeast Asia, the rest of Asia and beyond.

Audio social media isn’t a new concept.

Singapore’s Bubble Motion raised close to $40 million from investors but it was sold in an underwhelming and undisclosed deal in 2014. Reportedly that was after the firm had failed to find a buyer and been ready to liquidate its assets. Altruist, the India-based mobile services company that bought Bubble Motion has done little to the service. Most changes have been bug fixes and the iOS app, for example, has not been updated for nearly a year.

Things have changed in the last four years, with smartphone growth surging across Asia and worldwide. That could mean different fortunes but there are also differences between the two in terms of strategy.

Bubbly was run like a social network — a ‘Twitter for voice’ — whereas Spoon Radio is focused on a consumption-based model that, as the name suggests, mirrors traditional radio.

“This is mobile consumer internet at its best,” Eric Kim, one of Goodwater Capital’s two founding partners, told TechCrunch in an interview. “Spoon Radio is taking an offline experience that exists in classic radio and making it even better.”

Kim admitted that when he first used the service he didn’t see the appeal — he claimed the same was true for Musical.ly — but he said he changed his tune after talking to listeners and using Spoon Radio. He said it reminded him of being a kid growing up in the U.S. and listening to radio shows avidly.

“It’s a really interesting phenomenon taking off in Asia because of smartphone growth and people being keen for content, but not always able to get video content. It was a net new behavior that we’d never seen before… Musical.ly was in the same bracket as net new content for the new generation, we’ve been paying attention to this category broadly,” Kim — whose firm’s other Korean investments include chat app giant Kakao and fintech startup Toss — explained.

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There’s more: Google is also said to be developing a censored news app for China

Posted by | Android, app-store, Apps, artificial intelligence, Asia, Beijing, bytedance, censorshit, China, cloning, computing, Facebook, files go, Google, internet service, JD.com, search app, search engine, Software, Tencent, Toutiao, United States, WeChat, world wide web | No Comments

Can Google’s week get any worse? Less than a day after the revelation that it is planning a censored search engine for China, so comes another: the U.S. firm is said to be developing a government-friendly news app for the country, where its search engine and other services remain blocked.

That’s according to The Information which reports that Google is essentially cloning Toutiao, the hugely popular app from new media startup ByteDance, in a bid to get back into the country and the minds of its 700 million mobile internet users. Like Toutiao, the app would apparently use AI and algorithms to serve stories to readers — as opposed to real-life human editors — while it too would be designed to work within the bounds of Chinese internet censorship.

That last part is interesting because ByteDance and other news apps have gotten into trouble from the government for failing to adequately police the content shared on their platforms. That’s resulted in some app store suspensions, but the saga itself is a rite of passage for any internet service that has gained mainstream option, so there’s a silver lining in there. But the point for Google is that policing this content is not as easy as it may seem.

The Information said the news app is slated for release before the search app, the existence of which was revealed yesterday, but sources told the publication that the ongoing U.S.-China trade war has made things complicated. Specifically, Google executives have “struggled to further engage” China’s internet censor, a key component for the release of an app in China from an overseas company.

There’s plenty of context to this, as I wrote yesterday:

The Intercept’s report comes less than a week after Facebook briefly received approval to operate a subsidiary on Chinese soil. Its license was, however, revoked as news of the approval broke. The company said it had planned to open an innovation center, but it isn’t clear whether that will be possible now.

Facebook previously built a censorship-friendly tool that could be deployed in China.

While its U.S. peer has struggled to get a read on China, Google has been noticeably increasing its presence in the country over the past year or so.

The company has opened an AI lab in Beijing, been part of investment rounds for Chinese companies, including a $550 million deal with JD.com, and inked a partnership with Tencent. It has also launched products, with a file management service for Android distributed via third-party app stores and, most recently, its first mini program for Tencent’s popular WeChat messaging app.

As for Google, the company pointed us to the same statement it issued yesterday:

We provide a number of mobile apps in China, such as Google Translate and Files Go, help Chinese developers, and have made significant investments in Chinese companies like JD.com. But we don’t comment on speculation about future plans.

Despite two-for-one value on that PR message, this is a disaster. Plotting to collude with governments to censor the internet never goes down well, especially in double helpings.

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Musical.ly’s shutdown of Live.ly was contractually obligated

Posted by | Apps, bytedance, live.ly, Media, Mobile, musical.ly, Social, TC | No Comments

Musical.ly has begun redirecting users of its Live.ly app, which it decided to kill off last month, to a competing app called LiveMe. Existing Live.ly users are being pointed to LiveMe through an in-app message, it says. While it’s a fairly common industry practice for companies to direct users to similar apps or services when a product of theirs is being sunsetted, in this case, Musical.ly’s decision to close down Live.ly and send users to LiveMe was actually a contractually obligated part of Musical.ly’s nearly $1 billion acquisition by Chinese technology company Bytedance last year.

A clause in Bytedance’s agreement to acquire Musical.ly stated that, if the deal went through, Musical.ly would have to close Live.ly within six months, according to a source with knowledge of the deal.

The agreement also said that Live.ly would have to point users to LiveMe for at least 30 days following its closure, we learned, when verifying the information.

The issue at hand was a competing investment – right around the time of the Musical.ly acquisition, Bytedance had also put $50 million into the live-streaming app LiveMe. Apparently, it didn’t want to operate two rival properties.

Clearly, this request was not a deal-breaker for Musical.ly – in fact, it’s integrating Live.ly’s feature set into its own app. That means it will still be something of a competitor to LiveMe, though now no longer a direct one. Musical.ly’s main app, after all, is not known today for its live streaming, but rather for lip syncing videos that are recorded and edited using the app’s included visual effects and editing tools.

In addition, Live.ly had not been able to attract the viewership numbers that Musical.ly had. The company said, when confirming Live.ly’s closure last month, the majority of live stream views were taking place in Musical.ly itself, not in its spinoff.

That said, Live.ly had a fair number of users. Though nowhere near as big as Musical.ly’s 200+ million registered users or 60 million actives, its live stream app had 26 million installs, around 70 percent in the U.S., according to Sensor Tower’s data.

But LiveMe is bigger – it has more than 60 million users and has paid out over $30 million to its broadcasters through its direct virtual gifting program, the company claims.

LiveMe is also not the only app operated by the company. Other LiveMe portfolio apps include the social short video app Cheez, and mobile gaming and esports live streaming app Fluxr. To date, it has raised a total of $110 million.

Live.ly isn’t only redirecting users to LiveMe, however. In its own announcement about the news today, it shows a screenshot that’s pointing Live.ly users to Twitter’s Periscope, for instance. The message also notes that the Live.ly domain name is for sale, and provides an email for sales inquiries.

Musical.ly hasn’t yet responded to a request for comment.

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