Analyzing Line Messenger: Business Model

Business Model Focus: Line Messenger

Line Messenger has been the pioneer of messaging apps in innovation and how to make money quick as an up and coming company with their profitable business model. Line just only recent took to the helm and has started to make rapid profits even though their messaging application is free.

Business Model

Line's Business Model is one that is known to be comprised of several models. Line's chief strategy and marketing officer, Jun Masuda mentioned: "Instead of relying on one business model, we are trying to combine several different models.." (WSJ). At first glance, Line Messenger may seem to only be using a Merchant Model but in reality it also adds a Community Model, Utility Model, and even a Subscription Model to the mixture.

Line primarily uses the Merchant Model and Community Model as a company who provides a service for free, the service being the messaging system itself, which brings thousands of people together and connects them. Even though these models are the main components, they are only the surface. Deeper down, Line takes advantage of even more, which is where its profits begin to emerge.

Line cleverly uses a Utility Model where they have in-store purchases that let you "pay as you go" and a Subscription Model where they offer paid or premium versions of the application with more features and capabilities. Line has been having great increases in revenue with these models. Last year in a press conference in Tokyo Line released to the public that its revenue for the fourth quarter of 2014 rose more than 5 times than the year before. Moreover, these models Line has been putting into play have really worked out for them and have paved the way for other messaging apps in Asia to make profit and compete with the giants of Facebook Chat and WhatsApp Messenger.

Possible Alternate Model

When thinking about how successful Line is with its current use of Models, is there any other Model(s) that can be added to increase its success? I think that the possibility of adding more business models can over-cumber them and cause them to really lose focus of what is making them successful, but a possible alternate model that can fit in well with them is an Advertising Model. Even though Facebook or Google are great for advertising, Messaging apps are also sanctuaries in the technological world for Advertisement. Line currently offers a form of subscribed payments where a user can become premium and post "shout outs" or send promotional messages, to all the people subscribed to them. This is mainly used by popular businesses and famous people, like an in-app spin on Twitter. I think developing this further and creating more clever ways of sending advertisement than just the traditional way of banners or popups then they can really have even more profit.

Other early internet firms that failed such as eToys in the early 2000's were not able to cut costs let alone cover their expenses while having to compete with others within the market. The failure of this company that started back in 1999 did not have a clear value proposition which relates back to having a faulty business model. A company's strength lies in their model and how they act upon it, having a good idea and service is great but when your company cant convey a proper model that focuses on making revenue then it cannot thrive. In this case, Line makes sure to shoot over the top by having the proper models for its service and is therefore being successful.

Blog Analytics


The blog page has just been launched recently but has been struggling from what is shown in both the Blogger statistics and Google Analytics. Most of the traffic is coming from the US since the topic of conversation is messaging apps, a domain that is very dominant in the US but other traffic has been coming from outside the country such as Netherlands, Puerto Rico, Russia, and Taiwan. This outside traffic is mainly due to the fact that even though the US has the lead in the messaging app industry, many places around the world still use it and depend on it. It is pretty amazing how much outreach outside of the country the blog has been getting but the majority still comes from the US (62%). The reach could be improved by creating a more approachable and readable blog with titles and pictures which the last blog lacked in, and possibly a less essay-oriented tone to establish an author attitude.

Classmates' Blogs




Felix Gaspard

• Good use of aesthetics
• Very organized
• Informative and engaging
• Provides good examples
• Good example of blog culture

Commented on blog about how user friendly / approachable it is, and visually enticing with its aesthetics and how it links all the companies together with great use of digital marketing terms. Offers great insight on the effects of marketing.




Katie Donahue

• In-depth analysis
• Well versed in topic
• Very direct
• Good flow / easy to read
• Scholarly 

Commented on blog about how well it provides information and its in-depth analysis. The blog tied the marketing paradigm very well to the topic and showed great use of how it ties in with the companies. This blog was very knowledgeable, and while it may not have many aesthetics, it did provide a good, but also different, point of view on digital marketing and its impact on a company.






Works Cited

Facebook Launches Messenger Platform For Content Tools And Chat With Businesses (TechCrunch)
http://techcrunch.com/2015/03/25/facebook-launches-messenger-platform-with-content-tools-and-chat-with-businesses/#.scn55r:Timt

The surprising business model of OTT2 messaging apps - VisionMobile (VisionMobile)
http://www.visionmobile.com/blog/2014/04/the-surprising-business-model-of-ott2-messaging-apps/

How Messaging Apps Make Money (Digits RSS)
http://blogs.wsj.com/digits/2014/03/03/how-messaging-apps-make-money/

This blog is dedicated to the tracking of instant messaging app companies. The three companies that this blog will wrap itself around and focus on will be Facebook Messenger / WhatsApp (America), Line (Japan), and Kakaotalk (South Korea). Messenger apps have been rising and dominating lately, spreading throughout the world and interconnecting everyone from different places. The value proposition that these apps are delivering to their customers is what ultimately drives them. By meeting and understanding the needs of their customers they are offering something very valuable and setting their mark in the industry and acquiring delivering efficiently to their target market. These businesses have all similar business models. These companies structure themselves as a free service that provides limitless utility, but generates more than enough revenue to sustain itself and ultimately spend more money to expand. Most of their money comes from their transactions, purchasing things within the confines of the app that are optional as well as advertising.

These companies have great customer acquisition, they are constantly attracting more and more customers. Their apps are free and provide a very useful service that does not require having a phone provider, only internet connectivity. They also keep providing free upgrades and in-store content such as stickers, wallpapers, emojis, and other sorts of goodies for one to browse and buy.

These apps have a daily mission to have customers convert over to their app as opposed to another. These companies' vision  / mission statement, in essence, is the goal of acquiring complete customer satisfaction and ultimately give an enjoyable experience with their service. These apps engage well with users and provide many notifications to let the user know the app is "engaging" and "interested" in you.

The way they could improve their current strategies is to offer more services like they have been doing. Adding more dynamics to the apps and more features and possibly find ways to enter in partnership with other famous apps to seamlessly link more and facilitate communication between other apps (such as twitter or instagram). In the case of Facebook Messenger, who just bought out WhatsApp, they are reaching the most demographics not only in America but in many other countries. Line and KakaoTalk are mainly big only in Korea and Japan which could use more improvement, but have been slowly began to reach more and more customers outside their countries as they expand and integrate themselves.

Sources:

How Japan's Line App Became A Culture-Changing, Revenue-Generating Phenomenon (Fast Company)

http://www.fastcompany.com/3041578/most-innovative-companies-2015/how-japans-line-app-became-a-culture-changing-revenue-generat

Mark Zuckerberg Reveals Why You Were Forced To Download Facebook's Separate Messenger App (Business Insider)

By: Tweedie, Steven.

http://www.businessinsider.com/why-is-facebook-messenger-a-separate-app-2014-11