ATF Contributor December 31, 2020，Asia Financial
The world has been focused on live video like never before over the nine months that Covid-19 has restricted business and social activities.
But what people forget is that while Western video conferencing utilities such as Zoom and Bluejeans – the generation 2.0 of livestreaming video – have enjoyed astronomical growth during the pandemic, Asia has a long history of live video innovation and is poised to continue to lead the category in the post-pandemic world.
Live video evolution started at around the same time in the East and the West, but quickly diverged. In the mid-2000s, generation 1.0 emerged via platforms like AfreecaTV in South Korea and Livestream in the US.
This was the first time that internet users were able to participate directly in the live video experience by interacting with video stream hosts in real time rather than passively watching pre-recorded video.
In the West, live video was just one more video delivery method, and the business model followed that of media platforms such as television and the internet, driving revenue via subscription fees and advertising.
Asia lacked a mature internet advertising revenue model at the time but had an established “virtual item” economy that generated revenue based on large-volume but relatively low-value “microtransactions”. Early live video platforms in the region naturally adopted the existing virtual item business model, relying on viewers to pay for services directly.
These divergent business models ended up supporting vastly different ecosystems. In the West, the ad-based model limited revenue and growth, and live video essentially become a utility to support live event broadcasting or the delivery of user-generated content such as real-time video game play.
Asia was a very different story. Virtual gifts paid for by end-users drove a proliferation of live video platforms that generated attractive revenue from the beginning.
The technology and business model spread quickly from Korea to regional markets such as China, where the live video market essentially exploded. To date, at least seven listed Asian companies derive most of their revenues from live video, while none do in the US.
The numbers paint a compelling picture. Consultancy Frost & Sullivan reports that the global live video market showed a CAGR of 39.1% from US420.4 million in 2014 to US$106.6 billion in 2019 and is poised to reach US$252.7 billion by 2024, representing a CAGR of 18.8% for the latter period.
In the ongoing Covid-19 pandemic, live video quickly emerged as the preferred social connection platform globally. In the West, video conferencing utilities such as Zoom and Bluejeans stretched beyond their original business purpose to facilitate social connections between isolated friends and family members.
That said, live video applications that have emerged in Asia over the past decade and a half are much better suited to social live video needs.
Applications such as AIG’s Uplive, which have spread across Asia and major emerging markets globally, represent generation 3.0 of live video platforms. They are fundamentally different from Western video conferencing apps as they are designed for people to hang out together online indefinitely.
Many of these applications, which fall under the label “live social”, incorporate interactive features designed such as virtual gifts and real-time games to enrich interactions.
This means that a singer in Morocco can share her music with the world – and be rewarded with an income stream via “gifting”; a woman in Duluth, Minnesota, USA, can win a singing competition judged by Paula Abdul in the middle of a pandemic; or a teenager in Vietnam can blossom from a shy, insecure individual into a strong online presence sharing her experiences and insights with followers.
In fact, all three of these examples represent real accomplishments by live social users so far in 2020.
Generation 3.0 of video streaming – so-called live social platforms – are a product of Asia, where social and economic influences led to the emergence of unscheduled and highly interactive platforms. This offering has so far allowed Uplive to amass 233.9 million users across major emerging markets in South-east Asia, the Middle East and North Africa, across India and South America.
And this robust demand will remain intact long after Covid has retreated from mind, as continued above-global-average economic growth in emerging markets, relatively young demographics, the roll-out of 5G mobile telephone networks and still relatively low live social video adoption continue to serve as tailwinds.