Still Growing Potential of 'AfricaTV'

Increase in Login Ratio and Expansion of Content from Game-Centered to Various Genres Expected

[Asia Economy Reporter Kum Boryeong] An analysis suggests that AfreecaTV still has growth potential.

According to Yuanta Securities on the 19th, AfreecaTV's fourth-quarter performance last year is estimated at 43.7 billion KRW in revenue and 8.2 billion KRW in operating profit. These figures represent a 17% and 10% increase year-over-year, respectively, but a 3% and 24% decrease compared to the previous quarter.

Lee Changyoung, a researcher at Yuanta Securities, explained, "The overall revenue declined compared to the previous quarter due to the first quarter-over-quarter decrease in donation economy futures sales, which had grown for 15 consecutive quarters, and the slowdown in fourth-quarter advertising revenue growth caused by a decrease in game advertising concentrated in the third quarter." He added, "Operating profit fell 24% quarter-over-quarter due to increased expenses such as participation in G-Star and year-end BJ awards ceremonies."

The shock from the first negative growth in the fourth quarter last year is expected to linger for some time. However, the researcher believes that investment points still remain. He said, "We anticipate loyalty to AfreecaTV's community-based video media consumption and the potential increase in monthly active users (MAU), as well as content expansion from game-focused to various genres." He continued, "With the company's efforts to increase login rates and encourage chat participation to raise the proportion of paid users (such as point rewards), the sustainability and high growth potential of the donation economy model, which is the core of the company's revenue, are expected to be high."

There is also an assessment that the growth potential of advertising revenue, which remains low relative to media power due to a reduction in negative images of the AfreecaTV platform among advertisers and advertising agencies, is still significant. The researcher emphasized, "The proportion of advertisers focused on games has decreased from 80% a year ago to 70% recently, indicating an expansion of the advertiser base, which is positive." He added, "Furthermore, new forms of content-type advertising are differentiated ads that only the company's platform can offer, and we believe their growth potential is high."

This content was produced with the assistance of AI translation services.