Line's advertising revenue jumps as content shrinks

Line’s advertising and content revenue increased by around 20% year-on-year to 121.2 billion yen (US$1 billion) according to its nine-month financial results.

The company splits its advertising revenue between Line advertising and Portal advertising. Its core Line advertising business rose by 48% to 46.6 billion yen (US$412 million). Last year, revenue on the platform stood at 31.4 billion yen ($278 million) for the same period.

Portal advertising totaled 7.8 billion yen ($69 million), a modest increase on last year. Total communication and content revenue rose to 66.7 billion yen ($590 million) from 64.2 billion yen ($568 million). However, content revenue fell from 34 billion yen ($300 million) to 30 billion yen ($266 million).

Line attributed the revenue increase in Line advertising mostly to the growth of ‘messenger ads’ and performance advertising on Timeline and Line News. It blamed the fall in content revenue on a slowdown in its gaming business, where it released fewer new titles than in 2016.

At the same time, Line said it is promoting other content services such as Line Manga, Line Fortune and Line Music. Other areas that have driven increased revenue include Line Mobile, which launched last September, and the Line Friends merchandising business, which has expanded internationally.

Line’s key markets outside Japan include Indonesia, Taiwan and Thailand. Taking its lead from Tencent’s WeChat, Line continues to experiment with diversified commerce services, including food delivery. The company has also developed an AI assistant, Clova, which powers a series of smart speakers that it introduced to the Japanese market in June.