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Welcome to AfreecaTV Live Conference, a.k.a. ALCON. I'm BJ, host chair. This is my third time joining ALCON. Thank you for having me. Now this is the last day of July. Time does fly. ALCON is open to anyone who is interested in AfreecaTV. However, please understand that since it's related to our earnings, only those who signed up in advance can ask a question via chat window. Today, we're joined by Mr. Jung Chan Yong, our CEO alongside Ms. Kim Jiyeon, Head of IR; and Ms. Jun Kyunghee, IR Manager.
First up, could you say hello to those who joined us.
Good morning, I'm Chan-Yong Jung. So, we're going -- it's scorching hot here in Korea. So, I hope you are staying healthy and sound. And through the ALCON, we are going to present you what we have been preparing and also we can give you -- share some of our plans for the upcoming quarter and the rest of the year.
How about you, Jiyeon, could you say hello?
Hello, I'm Jiyeon. Yes, I feel like the heat is now kind of subsiding. And I'm really happy to be going to present good earnings today. So, I'm really happy. And we can also have an outlook on to our second half of this year.
Great. How about you, Kyunghee.
Hello. Thank you, and it's good to be back, and I look forward to further conversation with you, and I will support as much as I can.
You are in blue. And I hope that today's presentation will be as cool as your color of your shirt. So, what's the order of business this morning?
So first, let me briefly go over the earnings highlights of Q2 of year 2023 and then take the questions afterwards.
Okay. And now let us move on to the earnings report. It's all yours, Mr. Chan.
Here are the business performance and earnings highlights of the Q2, 2023. Despite many challenges, this is the second half of last year's such as Google's payment policy changes and economic downturn, AfreecaTV has been steadily growing and pursuing further changes in expansion based on its strong community and worked diligently to prevent core users from leaving. Even in the face of a difficult external environment, AfreecaTV has aggressively developed new forms of advertising products and revitalized leagues, introducing advertisers to a new advertising market that only AfreecaTV can pioneer and thrive in.
The second half of this year is highly anticipated for AfreecaTV that is -- that will move forward in terms of both business and finance. We've been executing our plan for platform one by one, including the personalized service, enhanced video quality and UI/UX and expansion of third-party plug-ins through open API and indicators of such results are becoming evident. Anticipating a robust financial performance, becoming visible starting from the second quarter, not only the structural growth of AfreecaTV's domestic business, but also the initiation of the global platform business will establish a strong identity as an eSports and gaming live community platform in Asia with a strong foothold in the Southeast Asian market.
Starting with the Q2, the economic impact of our -- on our advertising business turned out to be not as serious. Also, scale down of marketing budget of our clients was also not universally applicable with each client has difference in aggressiveness and marketing direction. The steady growth of platform also continued in the second quarter and there was rapid growth in branded contents with the increasing demand for eSports and gaming content production. Notably, the demand for BTL advertising from nongaming companies has been gradually rising and positive reference have been accumulating and made known advertisers, which will contribute to the growth of such adds in the future considering the fact that the H2 is a peak season for game marketing and return of offline events like G-Star. And our business in the second half of this year is expected to achieve the level of growth anticipated.
And moving -- and anticipating a robust financial performance becoming visible starting from the second quarter, not only the structural growth of AfreecaTV's domestic business, but also the initiation of the global platform business will establish a strong identity as an eSports and gaming live community platform in Asia with a strong foothold in the Southeast Asian market.
Moving to the financial performance of the Q2. The revenue for the Q2 recorded KRW 86.7 billion, showing a 19% growth Q-o-Q and 11% Y-o-Y. Platform revenue for the Q2 amounted to KRW 65.2 billion and the improved traffic indicators and ARPU resulted in a growth of 8% Q-o-Q and 12% Y-o-Y. Ad revenue for the Q2 was KRW 20 billion. Not only did the platform ad revenue grew, but also the demand for branded content increased due to the growth in leagues and game content production, leading to a 75% growth Q-o-Q in branded content revenue and 9% growth Y-o-Y.
In more detail, platform ads, including in-stream full banners and intro banners saw a rising demand from advertisers for new products, resulting in a 5% growth Q-o-Q and 14% growth Y-o-Y, driven by expanding campaigns with retail advertisers during the main league season and branded content revenue saw a significant growth of 118% Q-o-Q and 15% growth Y-o-Y.
Now, let me touch upon operating costs. The second quarter costs increased by 16% Q-o-Q and 15% Y-o-Y to KRW 63 billion. The increase in cost Q-o-Q is largely due to the increase in related variable costs due to the growth of platform and ad sales. The increase in costs compared to previous year was due to the increase in labor costs for manpower investment for business expansion and Internet circuit fees due to server investment as well as the increase in content investment costs. Categories by cost type commissions, which is a variable cost was KRW 7.6 billion, up 33% Q-o-Q and negative 23% Y-o-Y according to the sales of content advertisements.
Paying charges, another variable expense were KRW 9.6 billion, as the nation economy gift sales continued to grow. This is up 14% quarter-on-quarter and 28% year-on-year. As for expenses in the nature of fixed costs, labor costs increased by 8% Q-o-Q and 16% Y-o-Y to KRW 19.3 billion, which is due to the increase in staffing and employee benefits. Content production cost, which is related to content investment was KRW 6.8 billion, which increased by 130% Q-o-Q and 128% Y-o-Y due to the increase in production costs as large-scale eSports League started in mass in the second quarter.
Also, the increased production costs in the second quarter were related to content production costs linked to sales and the cost of producing signature content remained at a similar level to the first quarter. BJ subsidies will support BJ's active content production activities was executed in the second quarter of KRW 1.9 billion, which is an increase of 45% Q-on-Q and 103% Y-o-Y. And finally, the event cost was KRW 500 million, which is an increase of 83% Q-on-Q and 109% Y-o-Y. Operating profit for the second quarter was KRW 23.6 billion, up 29% Q-o-Q and 2% Y-o-Y due to the rapid growth of platform and advertising sales and the operating profit margin was 27.3%. Net income for the second quarter was KRW 22.7 billion, up 37% Q-o-Q and 15% Y-o-Y.
Finally, please refer to the annual financial statement. This concludes the report.
Thank you very much, Chan-Yong Jung for your report. As I was listening to the report, I think the word that captivated my mind was increase, increase, increase. It's really nice to hear that there is an up-trending results. And if you have any questions, please feel free to ask any. Let me ask the first question.
In the last earnings report, you said there was going to be an introduction of customized services.
Yes, we applied the customized services in April. And once you turn on the app, there is a default main page. And on that default main page, the hitting rate to the actual content is showing great result. So primarily, the personalization service is now achieving the expected performance. What we need to do is we need to refine further so that recommended live shows or recommend view, the show should come up. For example, we need to provide opportunities so that you get to experience something that you have never experienced and that recommendation accuracy should go up.
Thank you for that. I sometimes see a lot of baseball recommendations. And there's also shorts -- short video formats that are recommended for me as well. So sometimes, I would look at some BJs that I've never heard of and that's the change I noticed.
That's true. So, that's the [ catch ] service that we begin. Indicator for services, there is a significant growth trend. So, based on catch VOD service indicators are showing, I would say, for the 4 consecutive quarters, there is a significant growth. So, when it comes to extension of VOD services, it is definitely a meaningful number.
So, thank you. That's also increasing and growing. Let me now go to the first question.
Hello. I'm from Citi Securities. The first question is please update us on the PU trend in the second quarter and the key reasons for MOU turnaround. And the reasons why there was charging fees that decreased even though there was a revenue increase in ad. And will you maintain your guidance for the KRW 100 billion ad revenue annually? Okay.
So, why didn't you start Jiyeon.
So in terms of the PU trend, it decreased slightly comparing to the last quarter, about -- so, 4% decrease. However, ARPU has gone up. So Q-o-Q, 13% growth. So, the key reasons for MUV turnaround. The UV went up in the game traffic. FIFA Online 4 or LOL, so these leagues have been revitalized. So, in the second quarter, there were a lot of leagues that came back. So because of that, the EUV went up. And sports events, these are not really big one, but still U-20 World Cup and KBO, these sports also saw some increase in EUV.
So, everything kind of went up a little bit, but I could communicate with you on some of the things that we saw a spike in terms of the UV. So why the commission and charging fees when Y-o-Y went down. That's connected to the platform ads. And of course, the platform adds went up, but still -- and there are a lot of different types of ads in stream banners or full banners. And the RS rate can be slightly low. So in those areas, we saw some spikes.
Okay. So, what about the maintenance of the KRW 100 billion guidance for the ad revenue. I think we announced that last time she told me that I should not say that we can maintain that. But my willingness and my commitment to accomplish that is still there. So -- but -- so I ended up just telling you that my guidance is accomplishing KRW 100 billion. But there were some dip in the last quarters, but then it turned around.
And then the -- historically, the second half saw a better performance in the first half of year. So, I have high expectations for the coming quarters. And in the advertising agency that we acquired lately, I think in gross, that's KRW 30 billion. But I think in terms of net, I think annually, it will be KRW 50 billion. But in consolidation, we will be able to recognize the revenue starting in the third quarter. So if that's included in that guidance, I think we are in the visible realm. We can achieve that.
Thank you very much for sending us the ad balloon. Master of investment. Thank you once again. Okay. Let's move on to the second question. My name is Eun Jung Shin from DB Financial Investment. I would like to understand the ratio of non-game advertisers and also your plan for staffing and new recruits in the second half and business in Vietnam?
Let me deal with the second and third part. Well, when it comes to non-advertiser ratio, there's not much change. However, the overall ad growth was recorded. However, in the second quarter, I saw some of the meaningful inflow of non-advertisers coming into our client pool, especially for the BTL pool. This is something that we're making from scratch from a vacuum. New advertisers and new ad models are what we're targeting and this is definitely going to help us in growing ad sales. For example, from Hyundai Motors, they are launching a new brand called N brand, and they're targeting MZ generations.
And those brand content's ads are being shown on our platform and also eSport League creation with Galaxy that focuses on the functionality of Galaxy products, off-line events were carried out in collaboration with the brand. And for Apple, I know it's scaled. However, in the middle of eSports broadcasting, there was interim ads that were rolled out. They were small but meaningful collaborations with large advertisers. I think these large-scale advertisers are growing their interest in collaboration with Africa, which is quite meaningful.
Yes. And when it comes to hiring new recruits and staffing in the second half, I would say there's not much impact to our earnings. So, staffing has been stabilized to a certain extent. If you look at the scale of our company, we hire about 800 to 900 employees and I do the final approval for every new recruit. And when a company hires new people, it tends to grow and stop and grow and stop instead of showing a linear graph. So for example, up until last year, we had recruited a new staff and we did this year's round of recruit as well. So, I believe in the second half, there is not going to be a notable change or increase when it comes to hiring new recruits, this will continue to probably early next year.
When it comes to business in Vietnam, the name of the service is called online -- [ On-Live ], and we opened it and launched it. And in Vietnam, currently, the service-related investment is being carried out in Vietnam, for example, buying copyrights, IPs and securing relevant content. And we should be doing our roles in supporting that businesses in Vietnam. I believe by year-end, we are going to focus on obtaining more users in our Vietnam business. So, practical business results would probably come to us next year. When it comes to service, sophistication, we will make sure that we grow that area by the end of this year.
So, mobile, iOS, every approvals were garnered and we successfully launched those services. And because the Vietnamese business is somewhat publishing businesses, there is a limit when it comes to how much involvement we can get. But when it comes to content, we are in close collaboration. So for sure, we will look at service indicators, attract them and share them to you. Thank you.
Thank you. 300 star balloons. Okay. So speaking of which, On-Live. So, our platform became globalized and what makes us stand out from the crowd.
I would say stability and efficiency will make us differentiated because in terms of stability, the streaming is the key. So, it has to be transmitted with no glitch. So we got that down. And efficiency, so in terms of P2P, you have to be able to pull that off efficiently and efficiency needs to be accomplished. So, we got the know-how, too. Our P2P technology is optimized for a Korean situation. So for global, it's something that we have to test ourselves, test the waters too. So, the efficiency right now is not as amazing as Korean efficiency. But -- and we're going to have to make use of our learnings for our next year's global platform. So, still, these 2 are some of the competitive edges.
So when -- yes...
It's already launched.
It's already launched. I'm sorry, I wasn't updated. Okay. Moving on to the next question. Well, we talked about this slightly. There are so many different leagues. Yesterday, we had a league and there's a fishing league in GE. In September, in Hangzhou, there's an Asian games happening and eSports has become one of their 8 -- one of the sports. And out of the 8, 4 sports, Korean team will go.
So of course, it kind of depends on how well Korean players play. Yes, of course, in terms of the international competition, the player -- when the players are playing well, then the viewership will go up accordingly, of course. And when we do these sports broadcasting, depending on the performance of the player, the indicators also change. In the Hangzhou games, I look forward to and I anticipate that we'll be able to get the broadcasting rights. And we'll make sure that we prep ourselves well so that we can create a momentum for traffic influx. Thank you for that.
Hello. My name is Dong Hwan Oh from Samsung Securities. Thank you for showing your growing performance in a difficult market condition. I see there is a significant reduction in terms of the number of users at Twitch. What is your streamer and viewer absorption obtaining strategies?
Thank you for your question. I believe that you might be a little bit frustrated in the market. I feel the same as well. The reason why I say this is because when our users were going and flying to Twitch, why are they not flocking back to us all of sudden or quite quickly. So, we have to check the service indicators and there's definitely a trend and movement between platforms. But why is it not as fast as I would want to see. So to look back, if you look at the market and the industrial changes, those are different from the past. So currently, there are multiple platforms available and live streaming services are provided by those platforms. So from influencer's perspective, there are more options to go to and use compared to the past. And also, they are becoming more cautious about choosing a platform too instead of making their mind all of a sudden all at once.
So our strategy, what is that? It's the same for a user perspective, we will make sure that our services should look and feel familiar so that other platform users feel comfortable with our services. And moreover, going forward, we are using our software called [ Prepshop ] and usually other broadcasts are based on OBS. When it comes to service features that's suitable and idealized on Prepshop, but we would like to extend it to OBS. Currently, we are focusing and maybe being too fixated on using Prepshop. But if you're thinking about our global strategies going forward, I believe we should make sure that we could also use functionalities suitable for OBS and maybe develop relevant features usable on OBS2 so that we can host more diverse pool of streamers and viewers and there's no discrepancy and gap that they feel while using our services.
When it comes to streaming, of course, even though it's the same streamer, there are different rankings among them. There's different reputation, there's different image or power. And for those who have so-called less reputation, there are movements, more people move around in the bottom rank. However, if it's top class streamers, we are thinking of, probably because their movements are rather slow, you might feel frustrated too, but I think this is the matter of time. Eventually and ultimately paying a lump sum for them so that they can come to us. I'm not thinking of that direction at the moment.
If it's an adequate level so that we can support the creation of content, it actually costs a lot of money. So, we can provide them with some support annually so that they can create quality content. That way is open, but maybe paying like KRW 5 million or KRW 10 million per month, that type of support program is not planned at the moment. So, we would need some time. We have to make sure that they want to come. We just have to make and build an environment and foundation and they feel enticed to come because it's going to be fun here.
Okay. Thank you for the question. Hello, I'm Hyok Joong from Daiwa Securities. First of all, could you tell us about how you feel about the ad market situation in the second half? And the LOL popularity seems to be declining. What are the key games or eSports categories you are eyeing on?
I know the guy is kind of young, so he's very sensitive. So, to tell you about the ad market situation according to our assessment for the second half, well, it's quite rosy. We have high hopes in the second half. We talked about this in the first half, how the clients are tightening their belts. But usually, the budget, ad budget is allocated per year. So in the end, so in final, they will come back for the second half. And the ad market would be definitely better than the first half. But will it be better than the previous years? Then I'm not so sure about that, because the ad market situation is kind of going through a chaotic time right now because in many layers. So, looking at overseas companies or domestically also other platforms will also see increase in the ad revenue in the second half.
But then if you compare this year to previous years, then I'm not so sure. I'm kind of worried about that, too, LOL. I know the popularity is not as big as before. Globally, North America is not as good. Domestically, LCK, our viewing indicators. We see them every day. We're tracking them every day and we can see that the popularity is not as good. Riot is also as a key partner, so we're in talks with them. But if you see the gaming trend, it's really the user-driven market and -- but then -- so there could be some turnaround.
The gamers have been kind of distributed among different categories. So, for FIFA has gone up quite much. Within our platform, there are a lot of casual games, too, and that they're showing some good results. But I would say VALORANT, globally speaking, you can see that it's growing steadily. But within Korea and if you just see a AfreecaTV -- AfreecaTV's VALORANT category, the performance is not as good. So, it's something that concerns us. Since our business is going global also, VALORANT viewership, global viewership can be translated to Korea. So that's our take on this phenomenon. FIFA and VALORANT, those games will be played by many different people. So, the diversity will be there.
Well, let me add. Previously, eSports means LOL. That was the most representative one and that was only leader. However, it's different now. The eSports market itself is banding, but the users have been distributed to among many different categories and segmented differently. So, you can see that the number of users have gone up compared to previous years. So, the growth will be there. And MMORPG or the other categories can become eSports category. So, this diversity of the games and the user demographics and users are good news for us.
Yes, speaking of Hangzhou games, when the Korean national team plays well, then, of course, there will be a halo effect, too.
Nexon games are some of the games that catch my eyes. Their new games are being played by many BJs and a lot of users follow that too. So, in the second half of this year, I look forward to seeing good Nexon games.
So how about you? Are you gamers?
I do. I do play games.
What kind of games?
FPS is not a not a game for me because it's dizzy. LOL and FIFA.
How about you?
I used to. I'm kind of an older generation.
How about you Ms. Jun?
I play mobile games.
Okay. So yes, mobile, that's MZ, totally MZ. Okay. Next question.
Hello, my name is Yong Hyun Choi from KB Securities. If you look at the financial statement, there is inventory asset and there's also one-off profit that is not nonoperating profit. And also what about CTT third quarter revenues and operating profit contribution and long-term synergy effect?
So Isla, why don't you take care of 1 to 3? Yes, all of them, I guess.
Yes, when it comes to inventory asset, our affiliate 5 and 6 is the main reason, but the impact is not going to be too big. There's not going to be much change going forward. When it comes to one-off profit and nonoperating income, we had financial capital that we have been holding, for example, [ classes ], as you know, and Samsung ELS financial products, we are going -- we sold them. That is why the profit was recognized. In the case of CTTD, as our CEO has mentioned, for revenues, it was KRW 15 billion per year. But when it comes to operating profit-wise, it will be 20% contribution. So, you can divide it by 4 and then you'll see quarterly contribution levels.
In the case of long-term synergetic effect because digital marketing and designer creativity emphasis is what we have, AfreecaTV's UI/UX development and commerce development and global business is going to benefit by the acquisition. And also major game publisher connection is what we can expect from the acquisition as well. I think we are going to have great synergetic effects.
Your answers were great. But just to reemphasize what kind of synergy we are expecting, eventually, CTTD's acquisition, the biggest purpose is to expand our ad business. We started it as a web agency business, but currently, digital marketing share is quite large. And as you know, digital marketing, we have a subsidiary called [indiscernible]. We started it from last year and we're expanding the business. In the area of digital marketing, I see -- even though the scale itself is small, the growth rate is phenomenal. And digital marketing's foundation is going to also help us increase our ad businesses. That's the meaning we're expecting. And also moreover, web designers and UX designers, we have more than 100 of them.
So service, UI and design, I believe AfreecaTV, were not quite trendy. Those were the feedback that I got so far. So one great example I would like to share with you is that personally, I would like to take out the word TV and the logo as well. We have the TV symbol and I would like to change that too. Because the TV itself, the concept is quite old-fashioned. And I would like to change that concept. But if you change it wrong, then it's better not to change it. And because we have long-term relationship and synergetic effects, I believe we can create something that's trendy and also that is relevant to our service features and characteristics, service and UI design features could benefit for the collaboration too.
One thing I would like to mention is that our service has a very strong flavor. If you think about regular or general shopping websites or platforms, the flavor of the service is quite different from the generic or general ones. So, we would focus -- I think we shouldn't just focus on the look or the outside. If you want to do it properly, then they have to understand us better, experience our services. So, we're going to have long-term collaboration.
Another question I have. Hello, I'm Kang Seoko from Shinhan Investment. After March, I see that there are many branded contents carried out by Chinese games. And so what was the advertisers -- overseas advertisers' reaction to that and the efficiency of the performance of the ad? And how much portion of the overseas advertisers in the growth trend?
Yes, the overseas advertisers have not taken any big portion in the mix -- but just like how we started collaborating with Korean conglomerates, this is something that we can push forward to and that will definitely make a significant contribution. We cannot disclose in details the efficiency or the performance of the ad. But comparing to the banners, the branded content is more efficient and performs better and it has been proved many times before. And of course, overseas advertisers know about this and they're very happy about that. So, this is something that we're going to push forward with. And we will try our best so that we can diversify our advertisers' mix, including the overseas ones. And the portion of the overseas advisers, I would say we're in the beginning phase, so we can't really say.
Well, you say beginning of the phase -- beginning phase, it's quite fancy, so I look forward to that. Yes, I know that the ad revenue has gone up. But is there anything else you'd like to add in terms of that?
Well, the platform ad league ad and branded content's ad, everything in the second quarter grew. In the branded content, there was some loss in the first quarter. But -- so the first half was not as satisfactory, but we can definitely make up for them in the coming quarters.
And as Isla said during the briefing each advertiser -- so the game advertisers who are very active in the ad market or nonactive advertisers, but we have a lot of game-related advertisers. But looking at the second quarter, we can see that those game companies, depending on what kind of company that is, there are some game companies who are very active in spending money. But then their perspective on the situation in the ad market is different and the execution timing are different. Previously, there was a trend, like a big trend, but nowadays, it's different.
Sometimes, company A can be a little bit shy in executing and the other will be very active. So -- but then overall, our advertisers agree on our high efficiency in our ad. And in eSports, there is quite -- there is a slight decrease in LOL, but still there is a consensus among the advertisers and the efficiency and the performance of our ads.
Thank you for that. My name is Incheol Yu from Citi Securities. On Android, is the auto top of ratio getting better in ONE store and Galaxy store?
Yes. We are still at 64% on Google. We went down to 64% on Google market, and there's not much change from that.
For auto top-up, it's actually increasing continuously. Yes. So Q1 and probably second half of last year, we have loyal, high-ARPU users and they tend to bypass and they do not use Google and they're very used to topping up without going through Google and topping up habits, I would say, patterns are quite stable at the moment. However, for new paying users or light paying users, we have to increase them and that is going to actually take some time. But as we expand our content and as -- I think what's most important is content, to be honest. And users' payment convenience, engagement increase, we're coming up with different services to increase those areas and enhance those areas. Once we get the enhancement done, I believe we're going to have more number of paying users. More than anything, yes, auto top up is really convenient. I really, really like auto load up.
And also at Afreeca, we launched a luxury avenue too. I think diversity is coming in and kicking off. Yes. For commerce, I think it is not as good as I would like to see, to be honest, in the relevant department, they are checking different elements. Because if you think about commerce, it's not like their profitability is quite great or lucrative, so our department head would like to check and tick all the boxes and be cautious, whereas I want to differentiate ourselves and be bold, that's my direction.
When it comes to opening a luxury avenue, I don't think that was such a big deal because if you look at online mobile services, there are many, many different locations or websites where you can see or purchase luxury items. I don't know why he did PR to write articles. But my point is that for commerce, we have to come up with our own identity as luxury avenue. And I would like to see that early.
Virtual BJs are on the rise. But I know [indiscernible] virtual BJ, I know that it's going to be revealed today. Also I look forward to that.
I think virtual BJs will not only increase, but also their scope of activity will also expand. So, how are we going to support them and really -- so that they can expand their arena. That's where -- what we are trying to do.
So our chat room is still open. What else should we talk about?
Well, there are 2 things I'd like to add. Are there any more questions? Can you scroll down. Oh, that's it. So first of all, advertisement and global platform. These were the 2 topics I wanted to address. Yes, these are quite -- have been very important for many years, but I want to make some clear statement. In terms of advertisement, the usual pattern for branded content is that the advertiser says, Oh, this BJ. I like her content. She is very popular. Can I do the branded contents with BJ? That is the normal approach. But as you know, for game advertisers, the users' reaction to how the advertisers will approach the BJs, it's not as positive. So, this usual pattern has been broken.
So, one thing I'd like to say is that the advertisers and the influencer, which was BJs and users. These 3 have to be combined together and create a balance and make -- we need a product that won't make everybody happy. So, we used to use the influencer so that we can carry out advertisement. But there is a community of users that follow the BJ. So, we have to be able to give some kind of benefit to this community of users and the ad product, you should be able to do that. So that means the product will not only leverage the BJ but also the BJ's influence, the BJ's community of users. And that's the idea that we're having right now. And that's something that I gave a directive to our ad department.
And in terms of global platform, we talked about -- briefly about Vietnamese business. It's a bit publishing format. In terms -- so for global, it's a one build format. And we already have that one build among many different countries. So, the skeleton itself, AfreecaTV Korea, so there's a distance between the global standard. So, it's the same thing for [indiscernible]. So, we want to come up with something to develop a platform that can be up to the global standard. Our target is the first quarter of next year, but it could go to the second quarter.
In terms of the service, I could describe that. But in terms of business, this platform will be driven by eSports category. It will be specialized in eSports. And we are going to partner with global partners. And we're going to push forward with those leagues, but go global. Our key basis will be Thailand, Indonesia and Japan, yes, these 3 countries. And in fact, even today, there is no renewal version for the platform. But here, what I feel a little bit unsatisfied is that when we do a lot of contents that bring in users and new BJs, but there is no good foundation, a service foundation for them to keep going or expand their basis. So sometimes they leave. So, we have to be able to accommodate that. And for that, we have to come up with this platform. So, within the first half of next year, we are going to put a lot of efforts to make this into a reality. And the Korean platform and the global platform synergy, synergy can be something that we can definitely leverage. So, we look forward to expanding globally.
Okay. So, it's going to be launched first half of next year?
Yes. And let me add. We have been preparing quite a lot since last year. So global platform also came up with the personalized service and the open API that will launch this coming quarter. So of course, these changes can be big, but it's carried out with great care. So structurally, the domestic platform is changing. And last year, we were worried about the Google in-app purchase policy change. That risk has been eliminated. And of course, the ad market was impacted by economy a little bit, but still, our ad revenue has been growing steadily. And there are some companies who don't do the -- run the branded contents and leagues. But still, the financially and service-wise, definitely, I feel that AfreecaTV is moving forward step-by-step based on our structural change and we look forward to even further development going into the second half.
And I can say, definitely, they will be able to give you some good news in the second half. And recently, eSports, game content and the game community have been driving our business. But recently, if you see globally, the K content is gaining traction and it's very popular. But of course, that doesn't mean that we're going to produce some idle groups. But still, the K culture itself, it has a huge following all around the world. So, the shows by creators will definitely leverage the K culture's popularity.
So Twitch, our biggest competition, if you see how Twitch is doing, not only in the U.S. but also in Asia, I believe that this is a good timing for us to step up and really be competitive. So this year, our structural growth will be there domestically. But next year, there will be a big leap forward that you can expect. Yes, that makes me feel that I'm determined to renew myself in Korea and also go global.
We have a question, let me read it off for you. Hello. My name is Han Jin Kim from DAOL Investment. In order to lower the entry barrier for streamers and viewers from other platforms to move to Afreeca, would you have a plan to operate lighter page/platforms that have lighter Afreeca policies? And also moving on from the previous question, I would like to give you an example of Netflix or YouTube Kids page with more flexible policies.
Well, I'm not so sure whether I understood your question correctly. But if I'm short, please let me know further. I think I understand your intent of asking the question. But in the case of actual execution, as you said, the operation of light pages, I'm not so sure whether it's practical or effective. So, if you look at YouTube's or Netflix's kids page, it's a separate target group, whereas for us, the target is not totally different. It's the same target group, but has an experience at other platforms. So, I think you're talking about a lighter version of the same target group.
For those who are inflowing to us, I think in the recent 5 to 6 months, those are the -- I mean, Twitch users, former Twitch users requested the most amount of service improvement. They wanted the same service available on Afreeca that they used to use in Twitch. So, when it comes to entry barrier, I'm not so sure whether it's the right approach to tackle the entry barrier. If you think about lighter platform or lighter page, I'm not so sure if that's the right answer. But I think I would like to maybe focus more on the entry barrier.
I know that, that exists, but however, when it comes to how to solve it, we have to make sure our main page is simpler and also more personalized and the UI and design should change. I think that is the approach we should take. And that's the direction we're thinking of. But maybe separating a different page, that's not what we're considering at the moment. But I'm not so sure whether I got you correctly. So, if I'm wrong, please -- and let me reiterate it. So 100 million star balloons from happiness friend. Thank you very much.
Okay. So the person who asked the question says his or her answer has been -- question has been answered. Well, before we started on ALCON, we talked about how the situation is getting better and the business is getting better. And I can definitely see that we are performing really well. And then we were really up for a very -- we were all excited about the ALOCN. But you guys seem really calm. I mean is there anything else right to say with excitement.
Well, I think I addressed everything that I wanted to say. How about you, Ellen?
Yes, me, too.
Well, what I wanted to address is that starting the Q2, there are some signals to many changes and financially and in terms of business, there's a structural change happening and the growth is being visible. So, I'm sure that the message has been conveyed really well. And I know that the question has also translated our message.
If you have any further question, you can leave in our chat room. How about you Isla? Is there anything else you'd like to say?
Yes. I mean I totally agree with this too and listening to you, I look forward to seeing the low first but high second half trend. So, I think it's time that we wrap up. Is there anything you'd like to add?
Well, we have one more half to go. And last year, the second half of last year was a big time for us. So, we are striving so that we can accomplish even better results for this second half. But I would like to emphasize, ad business, I'm committed to that. So, there are so many things happening and we're thinking about many strategies. And of course, all the things that I think about are not realized but it will take time. But if we can do it this year, we're going to accomplish next year. If we can't do it next year, then we're going to do it a year after. So, we want to make a significant growth of valuable growth as a platform. So for that, we have to be competitive in ad market. So, we will see a good performance in the [indiscernible]. Thank you.
Yes, the weather is getting hotter and hotter, and I know it's going to be very frustrating for you, but I hope that AfreecaTV will be hotter in the coming quarters. So, stay healthy. Thank you very much for tuning in for the Q2 of 2022 ALCON. It has been hosted by BJ Cherry. Thank you very much.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]