LINE™ Creators: “No Free Samples” says 108 Billion JPY (Yen) company

As you may know, in 2016 LINE opened on the New York Stock Exchange (NYSE) with outstanding results. According to some internet reports they expected to price out in the mid-to-high $35 range but went up around $45 and settled to low $40s by the end of the day. Even the big players were impressed – check out CNBC Kate Rooney’s piece from 14 Jul 2016 on that.

News feeds buzzed about the success and it was touted as the highest Tech IPO (somebody said “ever”).

Well, I think that is great, it sure helped me to jump into the LINE Creators pool. I looked a little deeper. What I found was probably what you have found and is the reason you are reading this. LINE opened up to individual Sticker Creators, and some stories of earnings for Creators were just astounding; there are stories of tens or even hundreds of thousands of dollars.

No more hesitating, I signed up and started a new character, “Jup Jup”.

Jup Jup Intro

A real cutie and you can find her in the sticker shop. I won’t talk about her here, I don’t want to get distracted from the focus of this article.

So I did my thing, and submitted the sticker set, and to my amazement weeks later I got an email saying “Approved”. Wow that was easy, first shot and no problems it went right through.

Like anything, promotion is the key. I had set up her web page and started a LINE group (originally called Jup-Jup but is now called “Aajaanron Stickers” because everyone knows me as aajaanron 🙂 ) and sent invitations to my students.

Next step, obvious… send a few gift sets to some of my high-use sticker-crazed friends and watch the cash roll in from the spin-off sales.

Jup Jup Good IdeaJak Yes

Hmmm…! I searched over and over but could not find that link to download some copies or send some freebies. Finally I realised I had to use the “Send as Gift” link in the Sticker Shop; surely it would recognise me as the owner and let me have some freebies to help promote the set. After all, promoting the stickers is what drives sales, and LINE makes money…?

Well LINE Marketing and Accounting departments are brighter bulbs than I and I’m guessing they figured out that having Creators pay for our own product is guaranteed sales, whereas on the other hand there is no guarantee the sticker set will sell any copies otherwise. In fact I bet Creator by Creator, the majority of us are one of our own few customers. There may be info for that.

So if you are like me, I bought 10 sets and sent them to friends, not really all high users of stickers but people with lots of friends were also included. The results were unbelievable, as far as I can tell, relying on friend connections to help drive sales both instantly, and consistently over time has resulted in … zero … additional sales. More below on the mathematics behind that.

Jup Jup Really?Jup Jup OMGJak Sorry
So what happened to Jup Jup? Well, there were a few things that affected the launch.

  • Unique Cultural Events
  • Lack of Community
  • Niche Market limitations

I am in Thailand and in a most unfortunate turn of events His Royal Highness Prince Bhumibol Adulyadej passed away a few days before my stickers were released. This started a period of public mourning for His Majesty during which, among other things, release of new stickers was respectfully delayed by 30 days. This had the effect of burying the stickers under a long list of new releases during that period – essentially the stickers never got the “new release” exposure they otherwise would have. His Highness is deeply loved by the Thai people and mourning continues, many feel as if they have lost their Father. So this turned out to be a coincidence of timing and completely understandable.

It doesn’t help that I am a complete newbie and have zero following from the artsy segment of netizens. Being a no-name with a fresh start website doesn’t bring a lot of attention. Sales seem to appear in a somewhat dotted fashion though and I assume you’ve noticed I have since added “Jak”, a male sticker set to the collection.

My stickers do have a ‘cute character’ appeal to them, and are a bit amusing. But they are also ESL geared; many have English text of common idioms or terms in different scenarios with the characters. You can see what I mean here or here.

Tales from the Dark Side… Getting a little deeper into a ‘grey area’ of influence by looking at LINE’s structuring of the sticker segment reveals significant benefit to the corporation by their practice. For example, limiting Creator stickers to ‘stills’ or ‘animated’ while up against “free” commercial stickers with animation and sound and also the newer “pop-out” stickers leaves us independent Creators somewhat crippled in a competitive sense. I would argue that the Corporate freebies and the audio stickers literally trample us Creators. Hardly seems fair to me.

This takes us into a darker area of the whole business, which begs the question – how much could LINE potentially profit by setting these constraining “No free promo sets for Creators” parameters. I keep hearing from friends “are they free?” when I tell them about my new stickers, the underlying message being “there are so many free stickers, why pay?” Additionally friends keep sending me samples of cutesy animated stickers with audio, basically telling me that producing ‘stills’ and silent ‘animations’ is outdated and almost pointless.

The math. So what do I mean by profits?

update: I decided to show the older 2014 numbers first directly from TECHINASIA (Author: J T Quigley) since the author reports them as a quote from Line CEO Akira Morikawa

  • Stat Period: April 17 to November 17, 2014.
  • Creators: 270,000
  • Gross: US$30.5 million
  • Sticker Sets Sold: 30,000
WoWsers in just 6-7 months! But the point really is that, if we’re all at least a bit like me and buy 10 sets to gift, at US$1 each, with those stats that’s $300,000 dollars right there, and double everything for animated stickers we might guess numbers over the $1 Million mark.So anyway, $600k+ in the first 6 months from LINE Creators buying their own stickers to use for promotion, that’s nothing really is it? I mean a drop of water in the sea. So why doesn’t a 690+ million US$ a year company (9 months actually) loosen up a bit and give us some freebies?

Well, one of the basic rules of business is: “never neglect the importance of ‘bread and butter’ sources”; and at those rates, minimum $100,000 a month pays for a lot of bread and butter, or IT staff etc. Remember those are older 2014 numbers.Trust me the numbers have jumped in those 2 years. Or, don’t trust me and see this 2015 report that includes figures from the overall first year income for LINE App It’s a great article to help understand the enormity of this organization.

The fact then, from our (Creators) perspective, is that we actually lose 65% of every sticker set price of our own that we buy – before we add 10-20% or more tax deduction… so let’s make that a about 70% loss to buy our own sticker set to give free as a promo item. Actually that’s not a problem if the set catches on and sells some volume … if…

Some will argue about operating costs and overhead etc., and for that I would point to the adjustment LINE made in 2015 which reduced the Creator share of income from 50% to 35% (pretax and fees) which they justified as allocation to enhancing the Creators Market “experience.”

But if that doesn’t amaze us enough, we can allow ourselves to be dazzled by the more recent mind-numbing numbers from January 15, 2017 1:36 AM ET at Snapshot which are in billions of Yen.

In the same Bloomberg article we read the final closing line: “At the same time, the group expects to generate a stable level of revenues in communication, not only from existing products but also by expanding the variety of the products such as Stickers or Themes on LINE Creators Market.

Do you think they’ll say “Hey, those poor Creators put in hours, days, weeks, and (with review-approval periods) even months of work; let’s give them a boost”?

As a Creator honestly I think LINE does pay some attention to its relationship with us, and (if LINE doesn’t drop the Creators section) there will be positive evolution over time – for example kind of like Amazon has evolved its relationship with affiliates.

Yes but I know a couple of characters that aren’t so confident.

But we will see.

Well, thanks for sticking with me to the end here. It may have been a long story, but I’m sure it gives you a much more complete picture of [our] role as Creators in the LINE family.

Please share your experience or point out anything I can change that might help other readers.

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