MOMO of the West

Though it is first and foremost a social networking and dating app, MOMO is one of the breakout success stories of China’s massive mobile live streaming industry. I should know because I experienced the success of their live streaming feature firsthand. I was part of MOMO’s growth, joining the app as a live streamer in Spring 2016, and becoming a top streamer on the platform by Fall 2016 with nearly 300k followers.

During 2016 and 2017, in addition to MOMO, I streamed on several other popular Chinese platforms including Yizhibo and Huajiao and by doing so gained a comprehensive understanding of China’s live streaming landscape.

What I saw was that MOMO’s unique combination of social networking plus live streaming has allowed them to achieve what appears to be greater, and more sustainable, success than their pure-play competitors.

I believe the Western live streaming industry is still in its early stages yet surprisingly, despite MOMO’s dramatic revenue growth being consistently broadcasted throughout English-language media, only The Meet Group has adopted the MOMO playbook successfully at scale outside of China.

The Meet Group is a US-based tech company with a portfolio of social networking and dating platforms, including MeetMe, LOVOO, Tagged, and Skout. The Meet Group saw the growth of live streaming in China and the parallels between their platforms and MOMO, and decided to follow the MOMO model, adding live streaming functionality to their existing platforms.

Since then The Meet Group has experienced a similar growth trajectory, with their live video results to date almost mimicking MOMO’s. Twenty-five percent of MOMO users were using video within six quarters of launch; it took MeetMe five quarters to achieve that same penetration. In about a year after video launch, 3.5 million MOMO users (out of 81.1 million MAU) became paying video users, generating $195 million in quarterly revenue (or $56 per paying user). In about 11 months after starting monetization, 750k users on The Meet Group’s apps (out of 13.6 MAU) of The Meet Group’s users were viewing video, generating a $42 million annualized video run-rate; The Meet Group sees $70+ average revenue per paying user (1).

According to AppAnnie, The Meet Group now has more downloads than Bigo, Azar, and Live.me in both the USA and Europe.

Given my experience as a China social media marketing expert and someone who has immense respect for the technological innovation coming out of China, The Meet Group drew me in. They see learning from China’s mature live streaming industry as important to their success, taking great care to deeply understand the China market and glean valuable insights which can be used in the context of Western culture. The Meet Group looks to China to inform its product pipeline, developing features similar to MOMO’s Quickchat and PK (on The Meet Group platforms titled Quick and Battles) but innovating within these features and to make them work for a Western audience.

Why the MOMO model works

In late 2015 at the early stages of China’s live streaming trend MOMO was already a popular social networking app with a dedicated user base. Because of this, MOMO was able to integrate streaming into their existing platform and monetize quickly while other new platforms were still focused on building technology and acquiring users. In 2016 China’s mobile live streaming industry exploded and at one point there were over 200 apps offering live streaming. Despite the competition, MOMO remained one of the most profitable streaming platforms (2). In 2017 the market began to consolidate as many smaller players failed to maintain growth and retain users. MOMO, on the other hand, continued to thrive.

I believe the key to MOMO’s long-lasting success is their business model. To many, MOMO is considered to be a social networking and dating platform, with live streaming seen as a complementary feature that enhances the user experience. The platform offers more than just live streaming, enabling users to establish and expand social relationships (3) based on location, interests and a variety of recreational activities including short videos, social games as well as other video and audio-based interactive experiences.

The vast opportunities for social interaction keep users coming back day in and day out. While many traditional pure play live streaming platforms have slowly added social features such as fan groups and the ability to message streamers, there is generally much less of a community and social dynamic and a lack of opportunities to develop friendships with streamers and other users.

Finding Connection

While naysayers argue that live streaming is not suited for Western audiences, I beg to differ.

Despite cultural differences, many of the same societal factors that drove MOMO’s success in China, such as loneliness and lack of connection with the people around us, exist in countries all over the globe.

Loneliness is on the rise in the U.S., particularly among younger people, such as members of Generation Z, born between the mid-1990s and the early 2000s, and millennials, just a little bit older. And earlier this year, Britain became the first European nation to name a “minister of loneliness,” amid studies revealing that roughly 10 percent of all Brits regularly feel isolated.

While some argue that social media exacerbates the loneliness problem, psychologists say it depends on how social media is being used. If the person is passively using it, for example scrolling through feeds, then it may be more likely to cause negative effects, however when people use social media to reach out and connect to people, it’s associated with more positive effects.

And that’s where live streaming comes in. Quite possibly the most raw and personal forms of social media in existence, live streaming can be extremely engaging and interactive, and loyal viewers often form a tight bond with their favorite streamers, thinking of them as close friends. Live is the opposite of loneliness.

But, for many people, the one-to-many streamer-to-viewer relationship is still not enough to satisfy their social needs. That is where platforms like MOMO and those in The Meet Group eclipse traditional pure-play live streaming apps, by offering additional opportunities for users to create communities and interact with each other.

Despite there being several key players in the rapidly developing Western live streaming market, The Meet Group is well positioned to succeed, carving out their space as the MOMO of the West.

Sources:

  1. The Meet Group, Inc. (MEET): The MOMO of the West, Northland Capital Markets Company Update, August 22, 2018.
  2. Live-streaming video helped this Chinese hook-up app surpass US$10 billion in market value
  3. The Meet Group, Inc. (MEET): The MOMO of the West, Northland Capital Markets Company Update, August 22, 2018.

Cautionary Note Regarding Forward Looking Statements

Certain statements in this blog post are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including statements regarding whether Western livestreaming is in its early stages; whether we will be the only company outside of China to successfully adopt MOMO’s playbook at scale; whether our livestreaming user metrics will continue to grow, as expected; whether learning from China’s mature livestreaming market will be important to our success; whether and when our live video product pipeline will be rolled out and contribute to our growth, as expected; whether Western audiences will be as receptive to livestreaming as Chinese audiences; and whether we are positioned to dominate the Western livestreaming market. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “opportunity,” “is likely,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include the risk that our applications will not function easily or otherwise as anticipated, the risk that we will not launch additional features and upgrades as anticipated, the risk that unanticipated events affect the functionality of our applications with popular mobile operating systems, any changes in such operating systems that degrade our mobile applications’ functionality and other unexpected issues which could adversely affect usage on mobile devices. Further information on our risk factors is contained in our filings with the Securities and Exchange Commission (“SEC”), including the Form 10-K for the year ended December 31, 2017 filed with the SEC on March 16, 2018 and the Form 10-Qs filed with the SEC on May 7, 2018 and August 2, 2018. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.