WeChat monetization takes a celebrity twist; For a membership fee, WeChat users can now have their favorite movie stars wake them up in the morning, see unretouched celebrity photos, and read books published by famous writers

September 24, 2013 Leave a comment

WeChat monetization takes a celebrity twist

BEIJING, Sept. 22 (Xinhua) — China’s most popular instant-messaging service now offers a more intimate way for fans to interact with celebrities — and it comes with a price. For a membership fee, WeChat users can now have their favorite movie stars wake them up in the morning, see unretouched celebrity photos, and read books published by famous writers. The official WeChat account of Chinese actor Chen Kun now asks users to pay 18 yuan (2.92 U.S. dollars) a month for exclusive content. Given Chen’s massive popularity and WeChat’s 400 million-plus users, analysts say the account could generate a substantial amount of revenue.Many celebrities in China have turned to WeChat to engage with the public after the messaging app, launched by Chinese Internet company Tencent in early 2011, gained instant popularity among mobile users.

Despite WeChat’s rising popularity, much of the revenue for parent company Tencent comes from gaming. Morgan Stanley said in June that the Chinese Internet giant’s profit margins are likely to narrow further in 2013 as the company invests aggressively in e-commerce and mobile Internet.

While users of the company’s WeChat app have been on a steep rise in the years since its launch, the company has yet to develop a clear vision on how to monetize WeChat’s sprawling user base.

The latest version of the app has laid groundwork for future monetization efforts. The update enables a mobile payment service through the company’s payment subsidiary, Tenpay. Tencent also charges users for premium stickers and emoticons, while its barcode scanning function has been improved to assist mobile purchasing.

The renewed platform also sets the stage for in-app gaming, a channel widely deemed a potential source of revenue.

The membership fees charged by celebrity accounts are the latest effort to cash in on the popular platform. It is unknown how Tencent benefits from this charge. The company did not reply to Xinhua’s request for comment on the membership fee.

“The move opens a fresh new angle in the ongoing discussion about ways to monetize on internet platforms,” said Wang Yi, a senior IT consultant at Beijing-based research firm CCIDConsulting.

Internet companies traditionally earn their revenue through ad campaigns, as in the case of Internet portals and microblogs. However, the latest offering on WeChat puts a price tag on satisfying fans’ urge to know more about their favorite stars.

In that case, content becomes the ultimate factor in determining the fee’s ability to become a sustainable revenue source. Zhu Xiaoming, founder of WeMedia, said that users will pay membership fees only if the content they receive holds appeal.

Zhu added that WeChat’s ability to monetize depends on future improvements of its official accounts, such as that of actor Chen Kun.

It is hard to estimate the revenue already grossed through official accounts, but the platform has become a new battleground for companies and celebrities vying for public attention, according to Zhang Yi, CEO of iiMedia Research.

Tencent has not revealed detailed plans to regulate these accounts. While many accounts tout the privileges users can enjoy for a fee, some wonder if users will get their money’s worth and how Tencent will protect users’ rights.

“A post-sale service mechanism should be put in place to address subscribers’ concerns, but we haven’t seen any clear measures so far,” said iiMedia Research’s Zhang.

As more celebrities and companies open their official accounts to interact with users, Tencent must set necessary ground rules, including the protection of intellectual property rights, profit split, taxation and content screening, said Wang of CCIDConsulting.

Filed under TMT Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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