Date
15 November 2018

Tencent moves to monetize WeChat

Chinese actor Chen Kun is said to have made 7 million yuan (US$1.15 million) through his WeChat account in just one day.

Chen did it by adding a member’s fee function to his WeChat pubic platform, becoming the first celebrity to cash in on the social media phenomenon.

Fans and followers can choose from a menu of premium and value-added services for 18 yuan a month. For example, fans can listen to music in Chen’s playlists and browse his latest snapshots. Some premium features include access to Chen’s audio messages saying “good morning” and “good night”.

While Chen makes money, Tencent (00700.HK) has not received a dime, but that maybe about to change.

Last week, it was reported that WeChat will start collecting annual fees from corporate account holders. Service accounts on the WeChat public platform will be charged an annual fee of 3,000 yuan. WeChat will tailor the fees according to the number of followers and account usage.

If that is true, it would be a major step since an upgrade in August put Tencent in a position to monetize WeChat. Tencent has not commented on the report.

In fact, before Chen’s success on WeChat, Tencent has been working toward monetization.
Since WeChat upgraded to version 5.0, WeChat has split the instant messaging platform into subscription accounts and service accounts.

Service accounts allow chat messages to be sent to users by push notification but are limited to one message a month. The message limit encourages account holders to be more creative and to think carefully before posting random information to their followers.

Account holders can interact with users through their own chat window to promote or add value to their product or service.

On the other hand, subscription accounts allow account holders to communicate through mass messages but they have no interaction with their followers. WeChat allows subscription accounts to send out messages once a day but users have the option to “unfollow” the account as often happens when they get inundated with spam.

Rival NHN’s LINE offers some useful lessons to Tencent in how to turn instant messaging into a money spinner.

LINE provides corporate accounts. The one-off upfront fee for a one-year corporate account is US$6,690, excluding tax.

On top of that, LINE charges a fee for sending and receiving texts. For example, companies that send up to 30 messages a month would have to pay US$6,688 to US$16,719 according to the number of fans.

Character icons are among the most popular LINE features widely used for spicing up text messages. LINE charges a fee for downloading these characters and offers paid icon customization for free downloads.

Such services will cost a corporate account holder US$33,438, media reports said. Standard Chartered Bank and Ocean Park have launched such services as part of their marketing campaigns.

LINE posted US$132.3 million in revenue in the second quarter, up more than three times year on year and 45 percent more than the previous quarter. The company cited “healthy growth” in its advertising business for the strong numbers.

Tencent needs to move fast if it wants to catch up with LINE.

– Contact the writer at [email protected]

 

EJI Weekly Newsletter

Please click here to unsubscribe