
Understanding Line, the chat app behind 2016’s largest tech IPO - upen
https://techcrunch.com/2016/07/14/understanding-line-the-chat-app-behind-2016s-largest-tech-ipo/
======
hkmurakami
Overall solid article but strangely light on details.

>Gaming was 40 percent of Line’s revenue in 2015, its largest single line item
for income.

>Gaming can be high-grossing but it is also subject to fads and trends. Line’s
games have performed well but, as we have seen in the past, just one title
underperforming can drag the company’s revenue down.

>“Historically, we have depended on a small number of games for a majority of
our mobile game revenues, and we expect that this dependence will continue for
the foreseeable future,” Line admitted in a filing.

For example, their gaming revenue is dominated by "Tsum Tsum", a falling
puzzle style game that uses Disney IP and the Line platform. It's been a top 5
game in Japan for a few years now. The fact that the article doesn't call this
out specifically is surprising.

Also, their sticker revenue is now about 20% of their revenues iirc (according
to an article I recall reading last year), which I don't think was called out
in the article. At one point this was 80%+ of their revenues.

They seem to have achieved diversification of revenue sources, but core user
growth is the main risk.

~~~
tuna-piano
But is the type of gaming that would be associated with line a fad in
totality? And are stickers just a fad as well? Will people be buying them 10
years from now?

~~~
hkmurakami
I actually think stickers fill a real need of

1) "I am not exactly sure how I can respond best to my friend's message in
words, but I can be vague and generally pleasant by using this cute/funny with
this sticker"

2) I am too lazy / don't care enough to craft a thoughtful and appropriate
message.

~~~
sho_hn
Using stickers well is also a form of eloquence, and of demonstrating empathy.
They're often commentary for just-received messages, i.e. it's a way to say "I
got what you just tried to say" by picking the right sticker (individual well-
known sticker types - such as poses or facial expressions found in many
different packs across different characters - become tropes/memes). And people
also tend to appropriate certain characters, so it becomes a way to maintain
an identity within group.

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seanp2k2
Interesting times we live in. A "free" chat app is going to be valued at >$1bn
and they make money selling digital stickers and perks for their Tetris clone,
while publishing companies can't stay afloat with ads. Maybe publishers should
sell stickers.

Edit: 9 billion.

~~~
antisthenes
People don't care about the news or comprehensive journalism.

Bread and circuses.

~~~
AznHisoka
Yep, Humans are social animals and chatting is just as crucial as eating (in
1st world countries). Reading the news? We can do without it. One is
addressing a need, the other isn't.

~~~
TeMPOraL
Also it's enough for a few people to read the news; rest will learn the
important things via chatting. For instance, I learned about today's massacre
in France because my SO called me from work this morning to tell me about it.
Otherwise I probably still wouldn't know it happened.

------
kalleboo
LINE has actually turned out to be my favorite messaging app. Stickers aside,
it's one of the few ones with a native desktop app, support for sending video
clips, it has a really good group chat implementation (you can attach notes to
a chat which is useful for stuff like planning meetups). There's integration
with their other services as well - if you subscribe to LINE Music you can
embed a song into a chat. It just feels like they made a lot of good decisions
overall.

I communicate with some workmates over iMessage which often has delivery
problems (random delays), has very poor group chats, and obviously is Apple
platform-specific and yet is still inconsistent among the few platforms they
do support (you can send links on a Mac that can't be seen on iOS)

Family uses Facebook Messenger which on the desktop is stuck in a small frame
on their website and in general just feels impractical and feature-anemic.

Some tech-inclined friends use Hangouts, and I don't communicate with them
much because opening up Chrome decimates my battery life. That client was also
very slow to adopt basic UI features such as copy/paste of images and drag and
drop.

I don't know anyone who uses WhatsApp or Telegram.

~~~
brokenmachine
_Some tech-inclined friends use Hangouts, and I don 't communicate with them
much because opening up Chrome decimates my battery life. That client was also
very slow to adopt basic UI features such as copy/paste of images and drag and
drop._

Is there a hangouts app for iphone? Can you only use hangouts through Chrome
on an iphone?

I'm on Android and I've been very happy with hangouts. Works great moving
seamlessly between my phone, tablet and PC. Saying that in the past they were
slow to adopt those features is irrelevant now as the features you mentioned
are currently supported.

I would rather use an end-to-end encrypted chat app, but haven't been able to
change over yet. I tried Chatsecure with a tech-savvy friend but could never
get it to work. It would never handshake successfully. You could see the
handshaking messages in Hangouts, so I know it was able to send messages and
trying to handshake (both the ones I sent and the ones my friend sent), but it
would never connect.

------
jsemrau
I am working on a Line Bot and their api documentation is one of the worst I
have ever seen. Hope is that with the IPO they hire some resources to do this.

~~~
Larrikin
Have they opened it up? When I tried looking into it last year the application
made it seem like it was only open to fairly large companies.

~~~
jsemrau
I got one. Maybe they thought tenqyu is a large company. hahahahaha

------
gaius
How does a chat app need 2500 employees? Then again the same question applies
to Twitter.

~~~
level3
LINE isn't just chat. In addition to developing stickers and games, their
integrated apps include making payments, purchasing music and comics, hailing
taxis, searching for jobs, gifting, making reservations, shopping, finding
flash sales, and a lot more. They also provide services such as a chatbot
platform and hosted blogs.

They are constantly expanding and adding new services, and I'm sure they also
have a large sales team trying to get companies on board with everything they
add, and they have to do that in multiple countries.

------
matthewrudy
I've been a big Line user ever since I moved to Taiwan two years ago (and
subsequently moved back to Hong Kong)

Taiwan has embedded Line into their social norms in the same way as most
countries have done with Facebook.

It's safe to assume that anyone you encounter, regardless of age or social
status, is available on Line.

The branding is also very pervasive, doing promotions with convenience stores,
clothing, toilet paper, and anything else you can think of.

It's won over Japan, Taiwan, Thailand and Indonesia.

It's gradually winning over Korea. (there were at least 5 merchandise stores
in Seoul a few months ago)

However, growing out of those core markets hasn't worked so well.

Hong Kong has been targeted for a few years (opening a flagship store, and a
few pop-up shops), and it gets reasonable use over here.

But it's not managing to kick WhatsApp or wechat. (I saw a recent stat of 35%
of users)

So if they can't win over Hong Kong, I'm not sure how it'd work on Europe or
North America where their "asian cute style" branding doesn't win them so many
bonus points.

~~~
rahimnathwani
It's interesting you bring up the contrast between Line/WeChat usage between
Taiwan and Hong Kong. Perhaps people in Hong Kong are more likely to have
frequent contact with acquaintances in mainland China, than are people in
Taiwan. I'm not sure it's about cultural differences or branding. Just path
dependence.

~~~
sidek
Anecdotally: it isn't just proximity to mainland China. It's proximity to
China and the West. Depending on what social groups you run in, you're more
likely to use both facebook/tumblr/etc and/or Chinese social networks.

A lot of people I know had Line, but most of them didn't really use it for
messaging-- just the games, especially TsumTsum.

~~~
rahimnathwani
Yes, the point I made about HK/mainland and WeChat applies equally to
HK/Western and WhatsApp/FB.

------
niftich
'Ecosystem' apps like this remind me of stuff like Neopets [1], where you
spend time (and money) within a social gaming portal. Of course, these gaming
portals of old started with gaming and later expanded into chat and social,
whereas LINE (and Facebook) went the other way.

They're also vaguely similar to MMOs like Runescape, MapleStory, Second Life.
The point is, these services all hinge on user participation, user-to-user
interaction, and virtual economies, which sets them apart from your run-of-
the-mill chat app that just mines your external link clicks for ads, or shows
some display ads.

[1]
[https://en.wikipedia.org/wiki/Neopets](https://en.wikipedia.org/wiki/Neopets)

------
inthaiguy
Am in Thailand and everyone has Line. I have all the relevant messengers and
really not much pain switching between them. What I can't understand is how
WhatsApp squandered its early lead. This IPO represents their failure
capturing the market. Had they really executed, they could have owned mobile
chat.

------
Taniwha
Too many chat apps ....

My son is in japan, I have to load line on my phone. I sometimes work in
China, I have WeChat. Hangouts for text messages. Work uses Zoom. Another
group I hang out with have settled on Slack ....

I want just one

~~~
J_Darnley
Email. A federated protocol that can send messages regardless of the other
person's host.

------
alexmingoia
It's too late. Too bad you couldn't invest while they were growing. They've
hit a wall and it doesn't seem like they'll be able to expand outside of
Taiwan/Japan

------
kirkdouglas
I hope that WhatsApp will resist adding all these stickers and games and find
it's way to monetize (bring back paid subscription?).

~~~
egypturnash
Stickers are _great_. Stickers let you quickly communicate a reply with two or
three taps. They can also lighten things up; I giggle every time my boyfriend
uses the "that's great but I am Trying To Work now" sticker I drew for him.
What could read as curt and grumpy in text is instead expressed _faster_ by a
drawing that is a little bit inherently goofy.

YMMV obviously, maybe you're just too serious to ever want to use a cartoon
zebra to express yourself.

~~~
MichaelGG
>sticker I drew for him

That's pretty neat, but I haven't seen that; how do you do your own stickers?
I don't think anyone would argue against being able to send free-form
drawings. The stickers in Skype and Telegram, otoh, seem to be mostly "meme
junk". Random clips of TV, or (IMO terrible) cartoony drawings.

My daughters use them sometimes, same with strings of emoji. But I find it
expresses far less than words would do. It's like they're just hunting around
for a cute image, with little thought beyond that.

~~~
egypturnash
Line and Telegram both let users upload their own sticker sets. And I am a
professional cartoonist who thinks nothing of spending her spare time drawing
a bunch of goofy drawings of one of her characters. Really I kinda had to; all
my pro cartoonist friends have them too, and I felt naked talking to them
without a set!

[http://egypt.urnash.com/blog/tag/stickers/](http://egypt.urnash.com/blog/tag/stickers/)
has an older version of the set I did for myself. Still haven't posted the set
I did for my boyfriend.

I'm looking forwards to being able to dump these into Apple's sticker market.
Passive income off of something I did for my own use, woohoo!

(There's also a thriving trade in custom stickers: gimme a couple hundred
bucks and I'll crank out a set of goofy, expressive drawings of a cartoon
character you like to be on the Internet.)

~~~
captainarab
These are awesome / hilarious! Awesome work!

------
timwaagh
honestly facebooks messaging app is annoying and slow. facebook might have a
lot of users but how many of those use messenger? myself i install t and then
quickly deinstall it. messenger has more to fear from apps like this than they
do from it. whatsapp is good though.

------
Animats
_" 140,000 sticker sets and 6,830 emoji."_ They even sell a special emoji
keyboard.

------
simbalion
This stuff is a fad, like the housing bubble and the .com boom. People who
don't really understand technology or the internet or how people use both
think they smell gold and they take us on these ridiculous roller coaster
rides about "The next big killer app" or whatever. Then that app is dead in 5
years.

I guess if all one is interested in is making money, then good for them,
kudos. But in the grander sense.. "the internet shrugged."

~~~
Larrikin
Line is a fad like Facebook is a fad then. Pretty much every single person in
Japan with a smartphone has the app and it is the standard way to communicate.
I didn't need a phone plan when I lived there because I ended up making maybe
5 actual phone calls over the course of 3 years because LINE totally served my
needs.

The only people I met with a Facebook were people who liked traveling and were
actively looking for English speaking friends.

~~~
brobinson
Almost every person in Taiwan has LINE, too. Something like 75% of the country
has an account.

~~~
mrtron
And everyone who communicates with people in Taiwan.

Sticker sets are shockingly popular with the 40+ crowd.

