How BIGO LIVE makes $8 million per month

There’s drama, there are loners staring into the camera, and yes, there are women dancing. In fact -there is a lot of dancing and singing. This is BIGO LIVE, a top-10 grossing live-streaming app from China, that's HUGE in S.E. Asia. Its content is as mundane as everyday life. But much more addictive.

Contents

What is BIGO LIVE?

Bigo Live is a free livestreaming app. It doesn’t have advertisements. Logging into the app, you'll find an endless stream of broadcasters. Most of them aren't especially talented. Nor are they famous people (which is one of the reasons for the success of apps like Instagram or Musical.ly).

And yet, Bigo sits comfortably in the top-10 grossing lists in India and other countries (Singapore, Saudi Arabia, Indonesia). In March 2018 alone Bigo was downloaded over 4million times and grossed $8m worldwide.

If you want to understand how to turn ordinary day-to-day interactions into an addictive money-spinner, then read on!

BIGO is really a game

I've heard the word 'gamification' being thrown around for a long time for consumer apps. Gaming Product Managers like myself, usually disregard these implementations of game mechanics because they are seldom well executed.

It should deconstructed for what it really is - a game.

But Bigo live is an absolute standout. It has implemented game mechanics brilliantly. There are novelty items, a levelling system, live events, gacha boxes, engagement rewards, appointment mechanics and much more. (It's mind boggling). I've spent multiple hours with Bigo live, and it's clear to me that it should deconstructed for what it really is - a game.

Quick Intro to the UI

Splash screen

For a registered and logged-in user, ther app opens up into this screen. Here the user can check out the most popular ongoing broadcasts. This has a bunch of faces, which are essentially the profile pics of the broadcasters. This allows them to, for instance, put a highly clickworthy pic.
Note: The other design choice available here was to programatically select a screengrab from the live braodcast - which the app creators have not opted for

Broadcast Screen

Once tapping into a broadcast you'll see this screen. And maybe even this amazing man. This screen can get really busy (I'll give an example later on in this post).
This is where the action happens. Viewers and broadcasters interact here over chat / video / gifts and a bunch of other things!

The Core Loop

The core loop of Bigo is dead simple. Spend time in the app to get the soft currency ^[1] (coins). Use these coins to get (gifts). Use the gifts to get noticed in a broadcast.

It isn't too hard to earn soft currency - but it can get grindy. There are two ways, which give a pretty solid clue about how game inspired this app is:

• A 30 day login bonus calendar lifted straight from the playbook of a mid-core game (For instance, Heroes Charge or Deck Heroes)

• Coins for Time - the longer you spend on the app, progressive coin rewards open up for you
  Bigo also has a levelling curve. Get XP to level up. XP is obtained by either watching broadcasts. Or, by sending gifts (which of course, is a much faster way of levelling up)

Social Components

This is where the app truly shines. Games would rely on leagues and/or alliances ^[2] to optimize for long term user retention. Bigo Live doesn't have to do this. The broadcasters take care of that.
Note: Bigo has introduced a product called 'Family' which bears a lot of resemblance to alliances in mid-core games

For short-term retention there are plently of broadcasts to watch. Mostly it is an audience of men tuning in to watch women. There are dancers, singers, game-show hosts, drama queens and many many other personalities that make swiping through the app fun.

The app achieves long term retention by providing a set of tools that make person-to-person engagement highly rewarding

But looking at long-term retention, is when we find the real fun stuff. Broadcasters establish special relationships with their viewers. Most often, it'll be the higher level users in a broadcast that are on more familiar terms with the broadcasters. They frequently get recruited as Admins to moderate the chat - which can at times get toxic. They are familiar with the times when broadcasters come online and are often personally welcomed by them. They are proper superfans. The app has its own interesting social dynamics, feuds, affairs, in-app boyfriends, stalkers, fake profiles - and these superfans are in the thick of it all.

The app achieves long term retention by providing a set of tools that make person-to-person engagement highly rewarding. Here are a few:

• Top Fans: The app shows the top fans of a broadcaster. This is shown on a daily and an all-time basis. This is a great way to get noticed by some of the more popular broadcasters.
• Guest Live: A broadcaster can take one or two viewers on a live call. For this to happen viewers must add themselves to a queue indicating they want to interact with the broadcaster - who can then pick anyone from the queue. So really, it's a waiting list. However, one picked it can feel like a special experience to talk live with the broadcaster while everyone watches
• Chat: There is a constant chat stream running through every broadcast. The broadcaster will often call out the names of viewers who send premium gifts (which add to the total Beans tally). This too feels good as a viewer
• VIP status: For when the chat becomes too cluttered - a usual situation with the more popular broadcasters - there is a solution to break through the clutter. 3 level of VIP status, each of which cost progressively more. Once of the VIP status you'll get a slew of benefits.

Getting noticed in Bigo live: Using the app becomes a lot more fun if the broadcaster talks to you, the viewer. It is hard though, to get the attention of a broadcaster - especially the popular ones. One way is to shower the broadcaster with lots of gifts. This gets noticed in the chat stream and you could potentially secure a spot in the Top Fans list.

Monetization

Finally, the fun stuff. How does the app make money? Obviously through gifting and microtranscations - but there is a massive hidden layer of incentives and rewards and drives monetization that keeps Bigo in the top-10 grossing lists while other apps like MeMe Live, StarMaker and Azar follow about 10 spaces down.

Monetization is Bigo live is driven by the purchase of Diamonds, its Hard Currency. The store looks like this: (I have a balance of 254 diamonds).

Diamonds enable viewers to buy gifts for broadcasters. Say a gift worth 100 diamonds is given to a broadcaster, he/she would receive 100 beans. It is a 1 for 1 transaction and the diamonds are turned into Beans. The 100 Beans can be withdrawn into USD

Some quick math:

• Lets assume I spent $100 in the app
• This got me about 3402 diamonds
• I gave gifts and all my 3402 diamonds turned into 3402 Beans
• The broadcaster withdrew this and got $16 (210 beans = $1)
• So from the $100, the broadcaster made 16%, the platform took its 30% cut and Bigo nets 54%

Now it gets even better. Bigo has figured out how to increase this 54% figure. The next screen should give you a clue

So broadcasters can convert their beans into diamonds! Why does this feature exist?

The answer is, so that they can re-spend it within the app - for instance, subscribing to VIP status offers some serious value at the highest levels.

VIP Status

VIP status comes in 3 tiers, each giving a higher value than the former. VIP status is a sureshot way to get noticed within the complicated, crowded world of Bigo. There are cosmetic effects (screenshot below) and there are also other benefits. VIP's gets gifts on renewals and are able to send a standout chat messages.

These screengrabs show the lowest of the three tiers and the ways it lets the VIP stand out

While I won't go into all the details here, the most interesting thing for me was the pricing for the top VIP tier. It is 49,000 Diamonds per month ($1440!). That's quite an amount. The people buying it would mostly be Beans-rich broadcasters. The other clever trick here is that the renewal amount.

You can renew your VIP tier for 40% of the cost of purchase. This is a great way to get VIP's to not cancel their subscription unless they've decided to really be done with it!

Events and PVP

Probably the biggest money spinner in Bigo is their PvP (Player versus Player) feature that they call PK. Two broadcasters go head to head vying for points. They command and plead their followers to make it rain gifts on them, which is directly proportional to the points they get. At the end of a countdown one person wins and the AR tech in the app paints a crying face on the loser.

After converting the value of gifts received for this particular PK, The broadcaster on the left has won ~$280. (Bigo made ~$1250 there)

Bigo has weekly events, PK's, Multi-guests and even a P2P marketplace. I'm not going to explain all over here - but they all definitely drive monetization on the app by amping up the social factor.

Final notes and comments

I haven't covered a bunch of things ^[3] in this app. This is intentional. I've prioritized the main features of the app. That out of the way, I'd like to make a few comments.

The best broadcasters connect with their audiences well beyond the moment when their broadcast ends

1. BIGO and sleaze: Bigo Live has plenty of sleazy bits, yes. I've heard it often compared to a dance bar. But I'd like to differ. While there are sleazy elements, Bigo works because it nails social. People like to communicate in meaningful ways, and the app lets them do just that. The best earners on the app aren't the women running dance bars from their bedrooms - rather it is those women (or men) who bring fun, excitement and drama to the screens. They connect with their audiences well beyond the moment when their broadcast ends.
2. Bigo's Tech: Swiping between broadcasts is super-fast. There is never any lag and the transitions are seamless. They are clearly managing this extremely well - accounting for the different streaming speeds on the side of the broadcaster and the viewer. The app size is 36MB on the Google play store - well below the OTA download limit
3. Where does it go from here: There is plenty that can be written about the history of Bigo and its connections to the Chinese company YY and to it sleasy beginnings. But what is more interested to see is that Bigo is fast adding livestreaming of games (think Twitch/Youtube), Live talent shows and also live trivia (like HQ Trivia). It is definitely trying to expand beyond the section of the market it commands

Here are a couple of future posts planned on the topic of Bigo and livestreaming apps:

1. Recommendations for Bigo: There are several ways to improve the monetization of the app, including some fairly easy to implement ideas
2. Competing in the space: What should your strategy be if you're looking to complete with Bigo

Footnotes and References