Soop Co., Ltd. (A067160) Earnings Call Transcript & Summary

Welcome to AfreecaTV Live Conference aka ALCON. I'm BJ [ Doyoo ] TV. Great to be back for the third time. For those who have joined us today, and I'm sure you have a lot of questions about this year's quarter. And can you see that we are in a new -- brand-new studio? So I think the performance and the earnings that we will report today will be as bright as this new studio. ALCON is open to anyone who is interested in AfreecaTV. However, please understand that since it's related to our earnings, only those preregistered with us can ask a question via chat window. Today, we are joined by Mr. Jung Chan-Yong, our CEO; Ms. Kim Jiyeon, Head of IR; and Ms. Chan Gyeong-Hui, IR Manager. First of all, can you say hello to those joined us?

Hello. I'm Jung Chan-Yong. We have passed the first half of this year, and I'm really happy to be back to communicate with you with our earnings highlights. I also feel like there's not much time left for this year, but we will do our best to come back with even better news.

Yes. I can definitely see that we have really great news today.

Hello. I'm Kim Jiyeon. I'm very happy to be with you today with good results also, and I will always do my best to give you good news also.

Good morning. I'm Chan Gyeong-Hui. It's my third time being here.

As soon as you start presenting your material, you are very charismatic, but I can say that you are not -- you're kind of camera shy, in general. But when you do your presentation, you look really good. Thank you. So what's the order of business this morning?

First, let me briefly go over the earnings highlights of Q2 2021, then take your questions.

Okay. Then now let us move on to the earnings report. [Operator Instructions] Take us away.

Here are the business performance and earnings highlights of the Q2. In the second quarter, we continued our efforts to provide a better service environment and diverse contents to our BJs and users. We upgraded our UI/UX to improve the access to not only live programs but also VOD and e-sports services and continued pouring efforts into diversifying content such as music and economy in addition to games. In parallel, we are making step-by-step preparations for new business such as live commerce so we can make our services more universal in the long term. It is worth noting of the outstanding performance of our advertisement business. Despite the difficulty of in-person marketing, we were able to secure more partners and direct advertisers through our in-house advertisement solution, AfreecaTV Ads Manager. Thanks to AAM, we now have a more diverse nongame advertiser portfolio such as F&B distribution, electronics and home appliances. Our branded contents also grew by a big margin, thanks to the eSports Leagues and new game title launches during the Q2. The effectiveness of branded content is now recognized by more advertisers than before. With this, AfreecaTV will continue advancing ourselves to live up to the advertisers' expectations by improving content production quality and expanding the efficiency of production studio. As the digital advertisement market is growing, the online privacy is taking more importance, which makes the targeting feature embedded in the platform will become more critical in the ad market. AfreecaTV will keep on making efforts to make ourselves a highly effective ad platform by diversifying our advertiser mix, making our data more systemic and inputting more fine-grade target elements. Now let me move on to the earnings highlights. The total revenue of Q2 was KRW 65 billion, recording 7% growth Q-o-Q and 44% Y-o-Y. Advertisement revenue drove this revenue growth. The platform revenue of Q2 recorded KRW 50.6 billion, which is almost the same as previous quarter, but declining slightly by 0.4% Q-o-Q and increasing by 30% Y-o-Y. This is a result of the plateauing number of paying users after a rapid growth for the last couple of quarters as well as the short-term pent-up demand on outdoor activity being expressed in the market after a long-term social distancing. The advertisement revenue recorded KRW 12.9 billion, which is a 54% increase Q-o-Q and a 200% growth Y-o-Y. As the AAM effect was applied to the entire quarter, the platform advertisement grew by 16% Q-o-Q and 121% Y-o-Y. After AAM was applied, thanks to the expanded partnership with advertisement agencies, both the game and nongame advertisement demand rose, pushing up the revenue growth in general. Branded content revenue also grew by 80% Q-o-Q and 363% Y-o-Y, driven by the league revenue growth since the Q2 and the increasing demand for game-related branded contents. Even with the COVID-19 effects accounted for, the growth rate is quite remarkable. Lastly, the multi-platform revenue reflects the revenues from the 15 Open Studios nationwide. Our off-line business, Open Studios, are taking the blow from social distancing. And we're doing our utmost to minimize the loss by selling some of the studios and limiting their operations. Now for the second quarter's operating income. It recorded KRW 21.5 billion, a 10% jump Q-o-Q and a 97% hike Y-o-Y. And the OPM or the operating profit margin recorded 33.1%. These numbers are influenced by the overall growth of revenue, in particular, that of the platform ads revenue. And the reduction in employment expense and other miscellaneous expenses also played a role in the OPM growth. For more details, please find the next slide. Now turning to the operating expense. Second quarter's operating expense posted KRW 43.4 billion, up by 5% Q-o-Q and 27% Y-o-Y. The growth in branded content and platform ads drove the production costs and the BJs' portion of profit up as well as commissions for ads, which posted KRW 6.2 billion, 68% increase Q-o-Q and 404% increase Y-o-Y. Also, growth in league content brought content production expense up to KRW 3.6 billion, which is a 70% hike Q-o-Q and 114% increase Y-o-Y. Meanwhile, KRW 12 billion employment expense for this quarter is a 6% drop Q-o-Q but a 11% jump Y-o-Y. It's because the allowances such as annual paid leave allowance were already recognized in the previous quarter. There are no other sections that sees an unusual increase in the operating expense. The last slide is yearly financial statements for your reference. Thank you very much.

Thank you very much for your briefing. It's quite a long portion actually that you're taking care of, but thank you once again. All right. If anybody has any questions, please feel free to ask. And I don't believe there are any questions raised just yet. So I do have my questions that I've always been meaning to ask. So first is on the Tokyo Olympics. For the broadcasting rights, I think a lot of viewers are questioning about this rights. And I know that AfreecaTV has bought broadcasting rights for that. And so the question in relation to this is besides the Tokyo Olympics, is AfreecaTV slated to buy other broadcasting rights for other games and et cetera? Any other contents that you are looking in to add to your pipeline? And also for the broadcasting rights, do you see any impact to your top line or even bottom line? Anything?

Well, in general, we are a video or -- and viewing basically. That's our platform, right? So what we are looking at is I think there's more layers to it. What I mean is that the -- seems that the broadcasting takes a lot of portion. But in fact, in the new media platform, the Olympic broadcasting rights, if you look at the money that we invest in it, there's quite a big portion of the profit -- or not much profit, in fact. If you look at our announcement to BJ, a lot of BJs are very thankful that we have bought this rights. One of the BJs actually mentioned it to -- on the announcement board because, in fact, BJs have their content every day that needed to be uploaded and created. That's quite a lot of work, creating content every single day. But during this Olympic period, they have -- they're given this content where they can base their production onto. So for that, I think they are very grateful that we, AfreecaTV, has bought the broadcasting rights for the Olympics. So that's a great source that we're providing to them. And it's not -- we are not directly sending this content. BJs create their own content. So that's why it is very more -- a lot more meaningful to them. And I know there are some issues about exclusivity, nonexclusivity. And it wasn't just the AfreecaTV. There are many service platforms that are actually broadcasting at the same time. So it's hard to say we secured the broadcasting right because it's not exclusive. But still, it's an Olympics that garners global attention. And the fact that we are part of it, I think, has already a big meaning in and of itself. And our BJs can utilize and take advantage of this. And after the opening, the viewership actually number is quite good. That's because a lot of BJs are showing their viewers on the Olympic content. So I'm very happy with it.

Okay. So yes, as a BJ, where we have to make new content every time, that's a lot of work to do. So thank you very much for doing that. So I want to give you a big applause.

But you haven't used the Olympics.

That's right.

But I think it's a great starting point. Yes, there are many games and sports in the Olympics, and there could be at least one sports that you may personally be interested in. And users might find that interesting as well. So give it a try. That's my personal suggestion.

Yes. I'll take that into consideration. And now that you mentioned, I feel that this is something that I should definitely leverage. And during this Olympic period, I should make more content around that topic. Okay. So I have one question here. Thank you very much also for the Star Balloons. So the question is, "Hello. I'm from Samsung Securities, Oh Dong Hwan. The Star Balloon revenue was sluggish this quarter. How much impact did the pent-out demand have in this respect? And as the virus is picking up again, what's your outlook on the third and the fourth quarter?"

So for the second quarter, the Star Balloons wasn't necessarily sluggish. What I can tell you is in the first quarter and the fourth quarter -- the third quarter of last year, the number of paying user went up on and on. And in the first quarter, we did expect that to be good, but it was like beyond our expectation. It was a great result, great performance. So paying users, I think, became a bit tired, if you will, of this very long-term strong growth. So it's a bit of a slowdown time, I think. And the weather also played a role. But again, we had a very strong growth of the paying user for over a long period of time. So I think it's about time that we plateau and take a little break there. But despite that, the people with the high-paying users are still continuing their trend. And also for July, if you look at the trend of this month, which haven't ended up yet, and this is probably as good as one of the best month of last year. And for the second part of the question, the picking up of the COVID-19 virus, I think it's not necessarily the impact of the COVID. More of the weather is playing a role because people are going out and doing things outdoor. And also, yes, we are seeing a rebound. And I believe that there will be no problem going forward in the third and the fourth quarter.

Now the next question is from Kim Han Kyung from Kyobo Securities. "What is the portion of nongame advertisers in the ad revenue this quarter?"

Yes. So in terms of the ad revenue, the platform advertisement and branded content, these 2 grew rapidly very much. Still, the game advertisers, in terms of the amount, take up the biggest portion. But the portion itself decreased from 70% to slightly less this year. And in terms of the number of campaigns, the nongame advertisers campaigns have grown. So that's very encouraging. And after AAM has launched, as Ms. Gyeong said, the big-name cosmetics or home appliance brands, those conglomerates have participated in the campaign. So it seems that they now recognize the effectiveness and efficiency of our AfreecaTV platform advertisement. And once they experience that, they are going to even run more ads.

Yes. The next question is similar. The branded content performance is beating our expectation. This question is from Hong Sunyoung from Nomura. "Did AAM play a role in changing advertisers' mix?" Yes. And I think that's one of the reasons why we changed the studio, so after the AAM launch. I think you kind of touched upon it, right?

Yes. I did.

Well, thank you for the question. I'd like to add. I said there will be 3 phases in terms of our advertisement business. First of all, it's the quantity. So that means that we have to secure enough quantity, and then we have to have change in quality of the advertisers. And in the mix and, the third phase will be the cost, now -- the pricing. We launched AAM in early March. So within -- it's been 3 to 4 months. So in terms of the pricing, it grew by a couple -- triple -- a couple of times. So the advertisement solution itself is performing very well. For the second half of this year, we are going to upgrade it even further, and we're going to expand the inventories. So until the end of this year, I think the platform advertisement of AfreecaTV will experience -- will see some really good results.

Thank you very much for that. And also, thank you for sending an Ad Balloon from [ Sarang ]. Thank you again and also for the Star Balloons. Next question comes from Yu Incheol of Citi Securities. "Number one, please update on the PU and ARPU. A second question is that the low profitable advertising performance is better than the high-margin Star Balloon business. But what's the -- why is the hike of the OP margin? Second and third question is, why such a low tax rate for the second quarter?"

Well, that's a very detailed question. Now on the paying user, as mentioned previously, the second quarter Star Balloon was plateaued because of a lower paying user. Actually, paying user dropped by 2%, which is a slight drop. But it's a 5% growth while -- Q-o-Q. And for ARPU, we are seeing a growth there. Q-o-Q, it's a 3% growth. And also Y-o-Y, that's more than 24% growth. So I think the Star Balloons, when it comes to it, we are seeing a continued growth there. Also, for the OP margin, yes, it did grow. I think that's because if you look at the trend, employment cost was larger in the first quarter than the second quarter. And employment cost actually takes up the largest portion in the fixed expense, not that we've cut down the head count but mostly has to do with the allowances that were heavily concentrated in the first quarter. And that's -- and we don't have that in the second quarter. And that's why we're seeing a drop in the employment expense. Now for the advertising as well, the margin is lower, yes, you're right. But platform ads when it comes to a certain point, the margins of the branded content -- can offset the lower margin of the branded content. So I think that's why there is a high OP margin. As for the tax rate, that's a very detailed and specific question. Well, corporate tax rate is around 20% for the most part. But because of the stock option exercise that took place, I think that's why, Ms. Gyeong, do you want to add to it? Because tax rate is quite a detailed question. Maybe I want to check and get back to you.

Yes. To make your answer more accurate, let's take some time.

Yes. Because each quarter, we do have some exemptions and tax benefits. But usually, the corporate tax rate stays around 22%. But I think when we have a stock option, then it changes a little bit.

Wow, we got 200 Star Balloons. Wow, did he -- is he part of our fan? Thank you so much. Is he a feverish fan? Oh, yes, that's good. Wow. Well, we have to have some reaction. You guys don't do reactions, how unfortunate. You guys can do better than that.

You are the expert in doing the reaction.

This is my reaction. Thank you for the 100 and 200 Star Balloons. Is there any more question? And another Ad Balloon from [indiscernible]. Thank you so much. And [indiscernible] you also joined our fan club. Okay. The question from Kyobo Research. The Olympics seem to not gain so much interest from the public. How much is the traffic trend for the third quarter?

Well, no, I feel like within AfreecaTV's platform, I feel that there is big interest still for the Olympics. But we will have to get down to the numbers. But just from my point of view, I feel that there are a lot of activities going on. And I know that there are some negative views over the Tokyo Olympics. And in the beginning, Korean team, Korean national team is not doing so well in the beginning. But still -- but in terms of the broadcasting -- number of broadcasting and channels and our activities of the BJs, it looks good. But we're going to have to sit and wait on how it's going to unfold. For the third quarter, is there any special issue?

No. No, not really.

It's like when you -- kind of depending on who your friends do and which platform you're in, in terms of the Olympics. Well, I have a question because there's one thing that I really wanted to find out. It's about live commerce. And recently, some live commerce content driven by the famous BJs, these are doing really well. How are you going to do that?

Well, the live commerce is something that we have been preparing thoroughly. But it's going to -- we're going to have to take time until we fully launch it and really launch it at earnest. And we have to cooperate with BJs, and they're the really high -- very important stakeholder so that we can make live commerce something permanent. And it's something we will -- that we will see happening everywhere. And it's going to take time. That means we have to prepare so that we can launch it as a category, and we will do more of that preparation during the third quarter. And of course, like yourself, there are more BJs who are interested in doing the live commerce. So we will communicate with them.

Yes. So once the structure is there, then there are so many BJs and creators out there, and the synergy will be just tremendous.

Yes. I agree. So from the advertisement to live commerce, these should be connected, which means selling and advertising these 2 are not separate things. Just how the branded content -- how the advertisers are spending money in our branded content, that can be connected, flow into the live commerce. So that means the open market or hot deals and other platforms, these are quite something different from what we do. We do something a little bit different.

Oh, that means we're going to have a better studio?

Yes.

No, I love it. It's really beautiful. This is such an attractive place. If you come here in person, you will love it as much as I do. Another question from [indiscernible]. "When do we get to see the full swing deployment of the real-time mid-roll ads? Also, what's the target for the revenue of the platform ads?"

Well, I think it's September that we're looking to see a full swing mid-roll ads adoption, yes. So that's our target in September. If nothing strange happens, that's going to be the case. So from now on, we are talking with the BJs. We already had a similar product before, but it's quite different in nature. So it's like a break time. That's the concept of the mid-roll ads that we're deploying. So during the time the BJs have their show, they are going to take a little break, during which the mid-roll ads will be incorporated. And the inventory, the pricing, we're looking to see a very bright and positive results. So I don't think it's going to have any negative impact to the overall inventory or the overall price of the other ads. The inventories are up to 80% or 90%. So we're going to see how that unfolds, and we will open this real-time mid-roll September and then have a really full time during the high season of December. The end of the year is always a high season. So let's see how that works out. And for our outlook for the platform ads revenue, the overall, as is, we're looking at Y-o-Y, 50%. But to be more specific on the platform, I don't think we have a number for that. We just have an overall target for the ads, and we've had a very good performance so far. So going forward, I have no doubt it's going to continue. But again, I don't think I can give you a specific number for just what the platform ads.

Yes. You're doing such a good job over such a long period of time. This must be a burden to keep up with an increasing level of expectations of your advertising investors.

That's right.

And especially for the game users, you are seeing such a sharp growth there. And it feels as though that the plateau or slight drop is a bad performance, which really isn't. So that must be quite a burden on your part. What do you think?

Yes. It's a bit of a burden, but it's not too much. It's not overwhelming because the businesses that we're doing is something that I'm very confident. And I'm confident that we're doing a good job and will do so in the future. And sometimes, there is a different timing. There is a little bit of a gap or discrepancy. But if you look at the long term, then I have no doubt that we will meet the expectations of our investors. So I don't think we can call it a burden. It's more of a stimulus for us to do even better.

"I'm [indiscernible] from CLSA Securities. First question, when will the mid-roll ads start? And second question was advertisement is growing fast. So do you have any updates to make in terms of the second half and yearly guidance?"

Yes. So it's a question about the mid-roll ad. Well, I kind of also answer this question. So yes, like I said before, the Y-o-Y was 50%. But it's safe to say that we will be able to exceed that target. But that doesn't mean that we can actually make an official guidance and change the guidance. But I can say with confidence that we will be able to exceed that guidance.

"I'm Lee Chang-Young from Yuanta Securities. After the AAM adoption, can you tell us the changes to the number of advertisers and the active BJs for the second quarter?"

So it's another question about AAM. Yes, it's a hot topic, AAM, because of the good performance in advertisement. So the number of campaigns that I was talking, but that is the number of advertisers before. And of course, our loyal game advertisers are with us. And also, we have new titles being launched, and the game is doing really well these days. So those new nongame advertisers have come on board, adding the number like home appliances and cosmetics. We do have those big conglomerates. But also, SMEs are running their ads on our platform, which is very encouraging. We can't really disclose the number itself, but what I can say with confidence is that nongame advertisers have grown in number. And in terms of the active BJs, their number decreased slightly for the second quarter, Q-o-Q, 5% decrease. This is because of the number of outdoor activities expanding, and I'm sure you kind of took a toll.

Yes. I have to admit. But then I take a break in the middle. And then also, I kind of stopped broadcasting my content for a little bit.

Well, in terms of the number of active BJs, there's a criteria in terms of counting, which means that within 3 months, you have to fulfill a minimum number of airing time. And we -- and they are slightly different from those BJs who are active, literally active in -- on our platform. So there are some groups that broadcast on our platform like, for example, like meetings or religious services. But then that number has decreased for the second quarter. So that was an impact. So that number of "active" BJs is different from those BJs who are doing their broadcasting as an income, as a source of income.

Also, you mean like there was changes in the number because of that, because there were some other people who have come on board.

And there are some channels with a PIN number to put in. So they are not like part of our system, part of our ecosystem per se. But they kind of organize themselves for -- temporarily.

Another question, this time from Yu Incheol from Citi Securities. "You had the live commerce Ali and Coupang and some other major platforms in the second quarter. What's the result? And how is the feedback from your own company?"

I think it was received very well, especially for Ali and Coupang. They loved it, the partnership with us. And I think because we have a strong BJ fandom here on the AfreecaTV, anything related to the commerce and the partnerships with the third party, they are very pleasantly surprised. But I think that if it's a one-off event, then you see an explosive popularity. But if we go for a long period of time, I don't know if we're going to receive the same kind of exclusivity in terms of the popularity. So I think our community service is rather different from the commerce service. Therefore, we need to make sure they incorporate and blend in very well with one another. For example, in the second quarter, we had certain famous BJs who did that. But if they were -- they cannot do it every day or even every week. So it should be like a one-off thing, but at least having a live commerce category on our platform is important. So we need to find ways to do that.

Yes. Before we started this, I actually made a suggestion. We have the tech BJs and others, but we should have a live commerce BJs who are specifically dedicated to the live commerce. We should give all this content and these resources to them.

That's a good suggestion. We actually asked our team that we have 100 partner BJs, and we have about 2,500 best BJs. And in that group, we should at least have a commerce-specific BJs so that we can make a proper partnerships with them. Right now, what we are doing is just giving the live commerce events to the very well-known BJs. But if we want to have that on a very firm basis on an over and -- over time, then we need to have certain people, pool of BJs, like you're saying, the BJs who are dedicating to the live commerce to do this.

Yes. I can do that. I'm very good at all these, especially the live commerce. So here, I'm a good candidate, right?

Yes. I hope that worked.

I think you will do a good job as a live commerce BJ.

I'm actually doing something related outside of AfreecaTV. Maybe also to add, I do want to air, let's say. But live commerce nowadays sometimes are not -- are too much for a shy BJ. But if you were to outsource it to the third party, then it's very much of a high cost. So I do have a studio in my own house. And I said, I actually could hire a manager who would take up a certain portion and then have that person to do the live commerce with me as a partnership.

Yes. Well, he's -- you're right.

Live commerce, I think, is something that, at least for the top ads, at least 10,000 people watch. But a regular, not-so-popular live commerce, at least you have 5 people viewing it. But in AfreecaTV, if you were to attract 500 viewers, then you must have BJs who've been successful over the past 5 years. So I think you should have a very stable Afreeca shop where people do shop and buy things. And I think there are quite a bit of people -- but if we have a very strong base there, we can expand our live commerce business. And my fans always say, let's say, I have the live commerce, then they say, [ Doyoo ], on AfreecaTV, it's only 25 people watching it. But in other platform, 4,000 people are watching this. But there's a cumulative data, right?

Yes. But I think, the Naver live commerce is something that we study all the time. And we've tried it with another partner. And there's also a live commerce agency role. And looking at several examples and cases, results aren't too good.

What do you mean? The sales?

That's right. The sales results aren't always good. So I think the problem lies in the commerce market itself. Is that a red ocean or a blue ocean? Everybody is going to say it's red ocean. But when it comes to live commerce, which is a new format of selling products, it could be a momentum to the commerce business that had been sluggish. Well, home shopping, they are sometimes big success, but only certain products, not all of it. So in the same line, the live commerce market could provide a great opportunity, a window of opportunity. [ Doyoo ] TV, you know this, and we internally also have -- no, because having played an agency role for the Naver's live commerce, I can say it's not hugely profitable. But at least, this kind of structure is something we can look into to see what we can do in the future.

So I see 10% is called the conversion rate, and that's like a mid-success. 10% is the number there for the regular live commerce. That's what I heard.

Well, that's something that our analysts don't have any access to. That's a very precious information.

Yes. That is very correct. About 5 years ago, we had a shopfreeca project, which has been halted for a long time. But I've been very much interested in it personally. And I am cautious, but I'm very serious about it. I know it's not going to give you a rosy picture, but I think it's a -- there is a small market that we can tap into. And AfreecaTV has its unique commerce strategy. And because of their conviction, I'm telling you all this, but Naver Shopping or Coupang, there's all these open markets that are already very strong there. And I'm not going to compete against them. I'm very realistic. So [ Doyoo ] TV's experience and her story, I think that could be very insightful to me as well.

Yes. So I have high hopes and high expectation on that as BJ. That will be a great news for me. Thank you so much.

Well, I'd like to add 2 more things. See, there are so many products out there that are not much exclusivity out there. So in this situation, say, you have to have some incentive to buy that product in our platform, not anywhere else. And some of the discount or the price competition itself by $1 or $2, I think that is not a big merit to our users anymore. So for example, there are 4 exactly the same product being sold on platform, and you have to incentivize the users to come into our platform to buy that product. And secondly, there will be some -- you have to have some products that are sold on the platform specifically. It could have your signature on it or something special, something special that are offered on AfreecaTV only. These 2 are the core part of what we do.

So you said the incentive. Do you have a strategy or -- you do have it.

But I can't really disclose that. It's not the timing.

I want to know. I really want to know. So it's a spoiler, so we can't tell.

Well, the Ad Balloon -- the purchase happening in the Coupang is the same as buying it on our platform, and Ad Balloon is the same thing.

Well, that's related to the next question. So the question is, if you launch the live commerce category after the Q3, will you have a 2-track approach with external link via Ad Balloon and AfreecaTV in a mall?

Yes. The 2-track approach that you're talking about, well, we -- the first part is the -- heavily happening. But we're going to put more effort on the second part, which is making the 2-track approach.

So it's nice to have several functions and some attractive features to garner more attention from a wider range of viewers, right?

Yes, I've got -- I've had a person asking me the question. While AfreecaTV does not have any G&A for the e-commerce, why even get into this market? And what do you I think answered? How do you think I answered? Well, I said, well, some people do ask why is AfreecaTV is even making a foray into live commerce? Profitability? Not really. Do you know the number for the profitability of live commerce and compare that with the AfreecaTV's profitability? Well, the only reason is that we want to expand the business model for our BJs on our platform. You look at our BJs here. Profits come from the Star Balloons, the share, commissions from the ads revenue. And we need to give them more ways to make them become more profitable. So live commerce is another thing that we're providing you, and I think we can do well. If we -- our platform was to make money, we wouldn't have done it.

Well, that's amazing. That's something really to applaud. Other platforms aren't doing anything at all to the BJs. They're not providing any support, but AfreecaTV is completely different. They are taking a good care of BJs.

Yes. One of them said the low profit for the branded contents. That's right because a lot of costs could get involved, and there's a lot of money to go to the BJs and the events expenses. So branded content may not be so high for our platform. But if you look at the BJs who are part of the branded contents, they receive the high profits. That's why we're doing it, not for our profit.

Another question. MUV is on decline. And what efforts will you put in to attract more users? And what's the long-term trend for MUV? What's your prospect?

Yes. You forgot to mention his name and affiliation. Well -- but what you just mentioned about the live commerce, that kind of universalized the content with no hurdle. I think that's shopping. So starting with that category, we -- that will be the basis of us to -- for us to expand our user base. That means even if you are not so keen on checking out other contents in AfreecaTV, but for the live commerce, shopping is something that everybody does. So just how you flip the channels, you come into the AfreecaTV to shop around. So that's another way to attract different users. And at sports, not just the professional, like a professional baseball or anything like that, but 3x3 basket -- straight basketball or leisure, sports, these are the categories through which we can attract more.

Yes. These contents are quite popular because in the other program, when I was covering the leisure sports, I got even more viewership, up to like 100,000, because I heard that there are so many people who join those communities and clubs.

Yes. And there are not many platforms who cover those contents. So if we can attract those people who are keen on the content, we can definitely expand the bases.

Now I know who asked the question. It's [indiscernible] from CLSA.

Let me add to this on the MUV trend. I do see that there could be some concerns around the MUV. Well, for live streaming MUV, like Ms. Kim said, we will expand. But eventually, on the MUV of our overall platform, to do well -- better on it, the VOD service will have to improve. The VOD service that we have has to be more accessible and more easy to use for our users to different channels. So going -- looking back at the first half of the year, the MUVs on the web-based users grew very much. But how do we interpret this? And I think that means we have strength in the content, but the users' accessibility and their awareness or perception of our platform is a bit different or not on our -- on par with our expectation. Last year and onwards, I talked about the ads and the VOD. I'm putting all out there. So I think that is strongly related to the -- that should be related to the MUV. So I'm going to put all our efforts on that.

So you talked about the VOD. So in relation to that topic, you know the [ 2P plus ], right? Ad Balloons is going to go through a revamp. So there must be new products like the quick view plus. Could you maybe share a few thoughts on that?

Yes. So the -- for the Quick View Plus, it's a new item that has a very unique functionality. And we used to have a quick view, but we are upgrading to Quick View Plus with higher price tag. And of course, we're going to continue to use the quick view. At the same time, I think the market is very positive on it. Why is that? Well, that's because our quick view, we've used it for 10 years for the same price. But we're now adding stronger features, which is why the higher price tag that's demanded. So the users can't skip the ads or they can also enjoy the multiview, so 2 split views at the same time on a mobile. So these are the new additions to the quick view plus. So next week, I think we're going to launch this new item, and I think we're already seeing a very positive responses from our users. And also, the profit-sharing scheme with the BJs is going to be also introduced. So about -- so there will be some commissions going out to the BJs, about KRW 1,200 to the BJs.

Well, that's amazing. That's very great to hear. You should definitely come to -- everybody should come to the AfreecaTV and enjoy not having to be interrupted by the ads, even for the VOD.

Yes. For the log-in users, when they get the points accumulated on their account for using the Ad Balloon, they can send out these Ad Balloons to the favorite BJs. So we've created this new way to do it, and I think that can also help enhance the VOD viewership.

Thank you very much for that. Great answer. Chris said he kind of stopped asking the question. Now I see it. "Even though you put in continuous effort, some of the BJs are involved in some accidents and incidents and scandals. I'm sure this is a very difficult topic to handle. But is there any set of schemes that you're preparing to prevent these?"

Yes. It is a challenge, big challenge on our side. Well, whenever we have those scandals, I kind of let it go, kind of -- I can't be angry every time, and it involves our BJs. So in our opinion, we have to have some kind of contact point with the BJs. But that's kind of loosened up because of the COVID-19. And that's perhaps one of the reasons why, what's happening these days. And set of preventive measures, say, there could be 2 things. So BJ engagement is a key, and that needs to be strengthened. And we have to communicate with the BJs on a constant level. And we have to be more communicative with them. And BJs are all alone during their broadcasting. And they could be kind of emotional because they're human beings. So perhaps in a regular basis, we can keep talking to them and educate them.

Yes. I mean, there's another thing. There can be some really big accidents, but AfreecaTV is a quite famous platform.

That is why one small mistake can be blown up. We, as an Internet streaming service provider, and those creators become majority these days, mainstream these days. So that is why we have to have a sense of responsibility, and we have to be able to engage with our BJs on that.

I note that we talked about how in some channels that you intervened.

No. External -- other platforms don't really intervene. They can't because their policy is not like that. I mean, I can only say in general, but there are people who are banned from Korean platforms go outside to foreign platforms, and they do their thing. And I can only comment up to this far. But that is why the platforms themselves need to feel more responsible, and we have to be able to support them from the back. And we should be able to intervene and take more -- a strong stance on that.

Yes. I can tell that you will feel burdened by that. Okay. No other questions from our investors. I think we are nearing the end of our session today. Maybe that's why. Okay. So it's about time that we wrap up. Maybe last words, closing words from the three of you? Mr. Jung, you want to start?

Yes. Second half of the year is also packed with many plans that we have now. So of course, the performance of the first year is important. But also, what I want to focus on is what we do in the future, especially 2022. Next year, we'll see a great change of growth, and all that base work, the groundwork will be done in the second half of this year. So we will do our best. We are already doing it and all the strategies and the plans that we have. I want you to really watch out and -- watch and see what we're doing.

All that I had planned to say are already mentioned by Mr. Jung. So...

Yes. You might want to go first next time.

Let me then add more specificity to it. The Ad Balloon revamp and also the Quick View Plus and AAM's upgrade and the commerce preparations and also the mid-roll, these are some of the plans that we have for the second half of the year. And even despite this COVID-19 pandemic, we are putting all our efforts this. So from the IR department, we are very grateful that all the teams are on board with it. And all these preparations will start to unfold in more visible results from the next quarter and onwards.

And Ms. Chan, do you want to add anything before we wrap up the session?

Well, the 2 of you did a great job. And I'm -- this is a learning experience every time, and we will come back next quarter with even better results.

Well, I actually had a very good time, especially in this amazing studio that's completely new. But thank you once again. And since my participation to in this IR call, I think we're seeing great improvements. Maybe I have a role there as well. But I'm also getting all this great energy from this. Don't you think? I mean, the performance have always been great. And so it's amazing that I could be part of this. Thank you very much for all the users and all the viewers for our conference call. And I hope that we were able to satiate some of your questions and the curiosities, and you found this to be insightful. If you have any further questions or even suggestions, please contact the IR team of the AfreecaTV. We will get back to you and incorporate all your feedback. So this is the end of the second quarter's earnings call. Thank you very much. My name is TV -- [ Doyoo ] TV. See you again next quarter. Thank you, everyone.