Driven by live streams, consumer spending in social apps to hit $17.2B

The live streaming boom is driving a significant growth in the maker economy, as a new forecast estimates consumers will spend $6.78 billion in social apps in 2021, according to data from mobile data firm App Annie. This figure will rise to $17.2 billion annually by 2025. , which notes an upward trend, represents a five-year compound annual growth rate (CAGR) of 29%. By that time, total lifetime spending in social apps will reach $78 billion, according to the firm’s report.

image credit: App Annie

Initially, most of the livestream economy was based on one-time purchases like sticker packs, but today, consumers are gifting directly to the content creator during their live stream. Some of these donations can be incredibly high at times. Twitch streamer ExoticChaotic was gifted $75,000 during a live session on Fortnite, one of the largest donations ever made on the game streaming social network. Meanwhile, App Annie notes another platform, Bigo Live, enables broadcasters to earn up to $24,000 per month through their live streams.

The report says that apps that offer live streaming as a key feature are also driving the majority of today’s social app spend. For example, in the first half of this year, $3 of every $4 spent in the top 25 social apps came from apps that offered live streams.

image credit: App Annie

During the first half of 2021, the US became the top market for consumer spending within social apps, accounting for 1.7 times the spending of Japan, the next largest market, and representing 30% of the market by spending. China, Saudi Arabia and South Korea round out the top 5.

image credit: App Annie

While both creators and platforms are benefiting financially from the live streaming economy, platforms are benefiting in other ways beyond their commissions on in-app purchases. Live streams are helping to drive demand for these social apps and they help fuel other key engagement metrics, such as time spent in the app.

One of the top apps that is gaining significant traction here is TikTok.

Last year, TikTok surpassed YouTube in the US and UK in terms of average monthly time per user. It often continues to lead in the former market, and moves more decisively in the latter.

image credit: App Annie

image credit: App Annie

In other markets such as South Korea and Japan, TikTok is making progress, but YouTube is still ahead by a wide margin. (In South Korea, YouTube is actually ahead by 2.5x.)

image credit: App Annie

Beyond just TikTok, consumers spent 740 billion hours on the social app in the first half of the year, which is equivalent to 44% of the time spent on mobile globally. Time spent in these apps has been on an upward trend over the years, with growth increasing by 30% in the first half of 2021 compared to the same period in 2018.

Today, apps that enable live streaming are leaving those focused on chat, photos or videos. Which is why companies like Instagram are now announcing a dramatic change in focus, as if they’re “no longer a photo sharing app.” They know they need to completely shift in the video or they will be left behind.

The total time spent in the top five social apps with an emphasis on live streaming is now set to cross half a trillion hours on Android phones this year alone, which does not include China. App Annie notes that this is a three-year CAGR of 25% versus just 15% for apps in the chat and photo and video categories.

image credit: App Annie

Thanks to growth in India, the Asia-Pacific region now accounts for 60% of the time spent in social apps. As India grew in this sector over the past 3.5 years, it narrowed the gap between itself and China from 115% in 2018 to just 7% in the first half of this year.

Social app downloads are also increasing steadily due to the increase in live streaming.

To date, consumers have downloaded social apps 74 billion times and that demand remains strong, with 4.7 billion downloads in the first half of 2021 alone – up 50% year-on-year. In the first half of the year, Asia was the largest region for social app downloads, accounting for 60% of the market.

This is largely due to India, which is the top market by a factor of 5x, overtaking the US in 2018. India is followed by the US, Indonesia, Brazil and China in terms of downloads.

image credit: App Annie

The shift towards live streaming and video has also affected the kind of apps consumers are interested in downloading, not just the number of downloads.

A chart showing the top global apps from 2012 to the present highlights Facebook’s slipping hold. While its apps (Facebook, Messenger, Instagram, and Facebook) have dominated the top spots for various years, TikTok dropped to the number one spot last year, and will continue to maintain that ranking in 2021.

Further down the charts, other apps that aided in video editing have also been overtaken by other apps that were focusing more on photos or chat.

image credit: App Annie

Video apps like YouTube (#1), TikTok (#2), Tencent Video (#4), Bigo Live (#5), Twitch (#6) and others now top the global charts in terms of consumer spend. First half of 2021.

But YouTube (#1) still dominates in time spent compared to others on TikTok (#5), and Facebook – the company holds the next three spots for Facebook, WhatsApp, and Instagram, respectively.

This may explain why TikTok is now exploring the idea of ​​allowing users to upload even longer videos by increasing the limit from 3 minutes to 5 minutes.

In addition, due to the ability of live streaming to drive growth in terms of time lapse, it is also the reason TikTok is investing heavily in new features for its TikTok Live platform, including support for events, co-hosts, and more. , Q&A and things like that. more, and why it made the “Live” button a more prominent feature in its app and user experience.

The App Annie report also digs into the impact of live streaming on specific platforms such as Twitch and Bigo Live, the former which doubled its monthly active user base from the pre-pandemic era, and the latter during H1. $314.2 million was seen in spending. 2021.

“The ability of social media users to communicate with each other using live video – or watch the live broadcasts of others – has not only sustained the growth of the social media app market, but has increased its growth in engagement metrics such as time spent. has contributed to exponential growth. What otherwise could have saturated some time ago,” wrote App Annie’s head of insights, Lexi Sydow, when announcing the new report.

The full report is available here.

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