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

Welcome to AfreecaTV Live Conference aka ALCON. I'm BJ Yoon Seo-ya. This is my second time meeting you since last February. My expertise is in mobile game. Very good to be here. ALCON is open to anyone who's interested in AfreecaTV. However, please understand that since it's related to our earnings, only those who have signed up in advance can ask a question via chat window. Today, we're joined by Mr. Jung Chan-Yong, our CEO; Ms. Kim Jiyeon, Head of IR; and Jun Kyunghee, IR Manager. First off, could you say hello to those who joined us?

Hello, hello. Good morning. I'm Jung Chan-Yong. So this is on our Q1 and everything that we planned yesterday -- last year. So this is going to be a good time for us to look back on the Q1. And many people have been looking forward to this, and we had some changes and great improvements on our business. So I'm happy to be here to share with what we have so far.

And Jiyeon?

Hello. Good morning. It's raining this morning. So it's good to see that the spring, because it's been a little bit hot. Anyway, so the spring is kind of going away. And I feel like we're already going towards the middle of the 2022. We did everything we could. We put a lot of efforts into it. So we'll be able to share some good news.

Hello. I'm Kyunghee Jun. Great to be here back after the first one. Please, I would like to ask for your support and love for AfreecaTV. So what's the order of business this morning? Let me briefly go over the earnings highlights of Q1 2022, then take your questions afterwards.

Okay. Then let us move on to the earnings report. It's all yours, Ms. Jun.

Here are the business performance and earnings highlights of the Q1 2022. With the recent lifting of social distancing measures, we are now facing a full-fledged phase of living with COVID. 2 years ago, in the midst of the sudden outbreak of the virus, we quickly overcame the crisis and showed the potential of our platform. Despite the changing environment, AfreecaTV is doing its best to ensure that both the company and stakeholders continue to grow together based on the expansion of existing and new businesses. As the restrictions on outdoor activities have been eased, BJs' range of content production has also been expanded, and users are showing higher participation. During the first quarter, various indicators such as the average viewing time, the number of visits, the number of concurrent viewers and log in rate, all rose, leading to an increase in the number of paying users. In addition, in order to maintain the active participation of users and ultimately convert them into paying users, we focused more on strengthening engagement of BJs and users and introduced a variety of services and features to this end. First example is the user participation service with which users can directly participate in the live show via video; guess the result, where users can post their guess on an esports league results and then earns points; and broadcasting station Ad Balloon events that give users a chance to win a giveaway when they send an Ad Balloon as a gift. There are some of the features and events that we recently launched to boost user engagement and content as well as the community. On top of these, we are going to reorganize and add various services within this year. Also, we are preparing for face-to-face events for BJs that we could not carry out because of the COVID-19. So we can restrengthen the communication and partnership with BJs, our major partner. Plans to further boost the growth of the advertising business were also carried out step by step. First of all, we opened Sangam [ FreeCat ] Colosseum, a new esports production studio in February to expand production capacity and lay foundation for advertising growth in the second half of the year by preparing new advertising products. Now let me walk you through the earnings highlights. The total revenue of Q1 was KRW 75.3 billion, recording 0.01 percent decrease Q-o-Q and 24% growth Y-o-Y. The platform revenue of Q1 recorded KRW 60 billion, increasing by 7% Q-o-Q and 18% Y-o-Y. In the first quarter, user engagement indicators such as user log-in rate, viewing time and number of concurrent viewers grew hand in hand. Paying users increased significantly, and ARPU continued to grow, which drove our revenue. The advertisement revenue recorded KRW 14.2 billion, which is a 20% decline Q-o-Q and 69% growth Y-o-Y. The low season dragged down the quarter-on-quarter revenue, but the growing demand for branded contents were sustained, which led to a remarkable growth compared to the same quarter last year. Lastly, the multi-platform revenue reflects the revenues from all 8 Open Studios nationwide. Open Studio is being reduced in size due to the social distancing measure, and we are limiting the operation to minimize the loss. The operating income of Q1 was -- can you change the slide? The operating income of Q1 was KRW 23.1 billion, which is a 6% decrease Q-o-Q and 18% growth Y-o-Y. The OP margin recorded 30.7%. The decrease in operating income is due to the rise in labor costs with the increase in personnel due to new recruitment and the investment in content, such as the Beijing Winter Olympics. Next up are the operating expenses. Now turning to the operating expenses. Q1 operating expense recorded KRW 52.2 billion, which is a 3% increase Q-o-Q and a 26% hike Y-o-Y. As for the variable cost, paying charge linked to the platform revenue posted KRW 7.6 billion, inching up by 7% Q-on-Q and 24% Y-o-Y. And the revenue branded content and the platform ads works usually in tandem with advertising commission. And as that revenue dropped, it also pushed down production costs and the BJ profit sharing. Therefore, the ads commission recorded KRW 7.8 billion, 24% down Q-o-Q, but a 109% up Y-o-Y. Employment cost, which is more like a fixed cost, posted KRW 16.1 billion, mostly attributable to a wage hike and the new hires, and it is a 21% increase Q-o-Q and 27% increase Y-o-Y. For other commissions for broadcasting rights and others, broadcasting rights purchased for the Beijing Winter Olympics took up a big part this quarter, hence, posting KRW 6 billion, up by 36% and up by 52% Y-o-Y. Last but not least, production expense for one-off events, such as BJ award ceremony and FreeCon, did not take place this quarter. So the event expense posted KRW 140 million, down by 88% and down by 10% Y-o-Y. No other section saw an unusual increase in operating expense. The last slide is yearly financial statements. So thank you very much, everyone.

All right. Thank you very much. Let's now turn to the Q&A session. [Operator Instructions] Now let's wait for the question. While we do that let's get started with the first question. I was listening to that briefing. And I think you talked about the strengthening of the user engagement. What's that strategy? What does that look like?

Okay. So AfreecaTV is really focused on BJs and BJ engagement, therefore, had been our main priority. Now the -- I think there was a concern about the user engagement. So there are many ways for the users to be engaged with us, but we understood that, that had to be expanded. So for example, a user who's on a mobile phone and would like to participate, now they can do it in both video and audio as well. And secondly we have many events for the users to be engaged. So not only do they just simply watch what's provided by the BJs, but they can also participate in activities with us as part of the user engagement activities. And so we're going to have many events of different sizes. That will be some of the efforts for us to strengthen that.

Okay. I do have one question here. All right. From Samsung Securities, Oh Dong Hwan. Looking at the MUV, it seems to be on a downward. There are some concerns. What's your take on that? Any future outlooks on rebounding?

The MUV is, of course, a very important index for us as a platform. And to increase the MUV, we have to do either 1 of the 2: number one, we need to make sure that BJs are -- more BJs are created or more strong and influential contents are provided on a sustainable basis, so either 1 of the 2. Overall, BJ -- when it comes to BJ engagement, what is important, of course, is the relationship between BJs and the users. That's one thing that we need to work on. But not only that, we need to go a step further and focus on the content-focused BJ and the users' engagement. But when it comes to content, it usually takes longer than you would like. So actually broadcasting rights and buying all of that has to do with the content strengthening as well. Now second thing is that -- is on the BJs. This is something that -- what we can do with that is we can provide a conducive environment for them to flourish rather than doing something. I cannot make you, Isla, to like become a BJ and debut. That's not something we can do. There's always a high limitations for that. So what we can do as an AfreecaTV is that we have an environment making sure that we attract these people to become BJs on our platform. And when they do become a BJ, they can -- they find our services easy to use as a BJ. And what we can do is we can also support them once they become our BJs, take root and become comfortable when they grow here with us on the platform. Now that's something that we need to wait to see the visible results usually. For example, say we already have a few BJs. They might leave and choose another BJ. Some others may join us for the first time. There's a cycle that always happens and takes place. And as of now we don't have any concerns with the BJs leaving our platform. But what I can tell you is that we want to see more BJs coming in, but that has been rather slow, I think, new BJs coming in. So like I said, we want to provide an environment where the BJs find our services easy to use and very accessible for BJs. We want to provide as many opportunities as possible to aspiring BJs with different business models, with the services for the BJs. So that's what we're going to work on. And you talked about the downward trend. You're right on that. But the MUV -- the core MUVs are really -- they're very strong. So other than this big core ones, the other smaller secondary ones, we're not too concerned about it. I think we have enough time to work on it. And for the broadcasting rights as well, we have many strategies to strengthen our content. So stay with us and see what we can do.

Thank you very much for that. Next question. Let's see.

The traffic...

So somebody -- yes, there's someone who registered with us, and now she's trying to participate using the user participation service.

Wow.

New technology, new feature.

Wow. Look, look at that. It kind of looks like TikTok.

Hello. Good morning.

Can you hear us? We can't hear you well.

Can you hear me?

Yes, we can hear you.

From DB Securities, I'm Shin Eun Jung. Claps, claps, yay.

So what is your question?

I have 3 questions. Can you update us on the traffic for April? And I see that the overhead costs went up. But is that going to be the same level as last year's? I mean in the future, too? And at last ALCON, you told us about the commerce business and you said you were going to be quite active in that end. So can you update us on that?

Okay. So about the MUV and the labor cost. Let me update you on that. MUV in April, well, April, in terms of annual, it had a lot of external and outdoor activities, so it's not as different as other months. But in May and in June, we have a lot of face-to-face events that are happening. And as Ms. Jun said and as our CEO said, we have some events with -- we're collaborating with the BJs with their outdoor activities. So we expect to see the turnaround in the traffic. In terms of the labor cost, well, each year in the first quarter, there is a salary increase and new recruits and these are all kind of all completed. So the first quarter level will be maintained throughout the year. So the portion of the labor cost in annual, I mean, it's going to be almost the same as last year so.

And what about -- usually, the labor cost, they don't really go up and down. But the first quarter is quite high, a little bit in relative to other.

Yes, it's a little bit under 5%. Yes, because most of the employees are recruited in the first quarter. So all the rewards and the benefits are distributed and that's reflected to our Q1.

Well, for commerce business, yes, we prepared quite thoroughly last year. So we think -- we thought that by this time -- by today, I would be able to give you some good news after launching it at full fledge, but we couldn't. It's a combination of advertisement and BJ. So the commerce page is kind of beta level right now. Around at the end of the Q2, I think it's going to be kind of up and running, servicing. The commerce -- the core of the commerce business, to be the matching platform. So there's the client that wants to sell products on our platform and the BJs who are willing to sell those products, they need to be matched. Sometimes in -- I mean in the beginning, it's going to be the commerce companies that will take the lead. But in the end, ultimately, since our -- we have the BJ pools, so the BJs and the celebrities will be matched, and the BJs will be the sellers. The Q1 advertisement revenue did not meet my expectation. So the commerce is the combination of the advertisement and the sales. So that is why we -- that's something that we had high hopes for. So by the end of Q2, you will be able to see what it's about.

Commerce business, I can't wait to see it. Did it help? Do you have any more questions?

No, that's it for me.

I think there is another question posted.

Or maybe somebody who's going to participate with a video. Okay. Let's see. I think we have Mr. Yu from Citi Securities, who would like to join.

Well, why don't we just read the question first anyways.

All right. While we get ready with the video, what's the recent trend for MUV and the outlook for the second half of the year? And also the questions about the BJ indexes. All right. Here he is. I can see him here on the video. Can you hear us?

Yes. All right. So recently, Facebook, and if you look at their IR reports, the current MUV is very much related with the stock price. And also Afreeca is not an exception there. So maybe I will ask another question again on the MUV. So AfreecaTV's MUV has gone down recently, especially this quarter. And maybe there were some -- we had actually expected the other way around because of the -- with more BJs joining us back after a leave absence. But what is it? Why is it that their joining us back, the BJs joining us back didn't reflect that in the upward trend of the MUV? Now another thing is that besides for the external factors, what are you doing within the AfreecaTV to bring about changes to the MUV? And end user, I think when it comes to user activities, I think it was pretty good looking at some of the indexes. And if you could elaborate on some of the numbers, that will be great, like the times of the broadcasting, what's the trend? How is it different this quarter? So that's my general question there.

All right. So let's get to the first question, which is the recent MUV trend and the outlook for the second half of the year.

Sure. So yes, the MUV has gone down slightly, but Q-o-Q is only 1% drop. Of course, the fourth quarter last year was already dropping, so that didn't quite rebound yet. So I'm sure -- I think that's what you're talking about. But if you look at it in a broader sense, just as Mr. Jung mentioned about the user engagement, we saw growth in the paying user. Q-o-Q is 5.3% growth. And of those in the past 3 months, there are people who never paid for the past 3 months, but we saw these people paying for the first time. That's very meaningful to us. Because these new paying users has to do with -- in a way, linked to the BJ activities. Because some BJs had took an absence leave in the past quarter, not just the famous ones, but also the regular ones. There were people who were gone for the few months there but now they're back. And of the new users saw a -- showed all these Star Balloons to those coming back, to the come back BJ. So that is very meaningful to us. And so what I mean is that the existing users started to pay -- become pay users, which will then bring the traffic up, I hope. And in that regard, I briefly touched upon BJ collaboration and some content production, and we're working very much on that now. And I'm sure you can elaborate, right?

Yes. Yes, Mr. Yu Incheol, like you mentioned, if you look at our MUV, we didn't have a dramatic rebound. There is a reason for it. And that is -- that's because everything is status quo. What I mean is that unless we see content diversification, MUV isn't going to dramatically increase. And as Ellen just mentioned, there are some BJs stop working or taking a break. Those are some things that we can't really control. So for us, we need to -- yes, you're right, we need to diversify and make changes for contents. For example, in esports, we're doing a lot of leagues, but there are some areas where we can develop further and leverage. So the question is, what are we going to do with that? Either alliance, partnerships or we can produce ourselves or we can pay for the third party to make contents for us. So these are some of the things that we can definitely leverage because I know we're not doing much there. So if you think of AfreecaTV, there are certain content genres that people think of. And we actually think that we need to get a step away from it and expand and diversify.

And to add to it, you asked about the BJ activity indexes. Yes, we looked at the number of the active BJs, and that was 1.5% increase Q-o-Q. So that's an encouraging sign. We're seeing -- we're almost at the end of the COVID-19 pandemic, and we look at and talk to the investors and the market. We did have -- we were a beneficiary in a way thanks to the COVID-19. But not only that, actually, we did -- not only did we benefit, but we also suffer some losses because we weren't able to meet the BJs, have events with a lot of people off-line. So we're seeing great encouraging signs with the BJ activities. For example, another very good news is we're seeing the tourism, the travel shows coming up again, so that's good. Now the number -- not only the number of the BJ -- active BJs. But not only that, we look at the current concurrent shows. So how many shows are being broadcasted at the same time. We saw 4.2% increase Q-o-Q. What that means is that more people are joining and more BJs have been very active on our platform. So more shows means we're giving users more opportunity, more time to be engaged. And it was usually per person about 2 hours or so. But this quarter, we saw that number go up to 3 hours. This is a demonstration, a testament to how actively, how more engaged they are between the BJs and the users. So for the traffic, I think it will go up as we get more diversified contents. I hope that answered your question. Mr. Yu.

Do you have further questions?

No, I think that's all that I had to ask.

That was amazing. Wow, that's really cool. Okay. Next question. I'm Lee Chang-Young from Yuanta Securities. First one is about -- I see that the personnel increase in the Q1. Who are these people? And how much increase do you expect that to happen? And the second one is about, can you update us on the commerce business?

Well, for our employees, out of the recruits for the Q1, nondevelopers and the developers. For nondevelopers takes up about 40% of the nondevelopers. And then if we recruit more people, I think it's going to be the same trend.

You mean the -- there are 40% more developers?

No, less. So the first quarter has less developers than nondevelopers. If you look at the subsidiaries, they recruited more developers.

How about the second question? I think it overlaps with the previous one, right?

Yes, we kind of touched upon that, but I will add to what I said. Before we focus on our relationship building with BJs and help them be more active in their shows and take care of them like that. And the next strategy was engaging BJs in terms of the content production. And another pillar was treating them well as our partner so that -- and that means that we added another profit-making model. And so here, what I'm saying is that the core is BJs. So as long as the core is strong, even for the commerce, then the sellers group will be over here, and the BJ group will be over here and the matching will be happening on our platform. That's the picture I have in my mind, and we are preparing step-by-step very thoroughly. I know it's being delayed a little bit, but we are on track to be able to show you the details on the next outcome.

How about the annual...

In terms of the annual increase in employees, it's going to be about -- our target is up to 20% increase. But as we said at the last ALCON, but -- there are some challenges for us to accomplish the targets, so please be considerate of that.

I think you are asking this question about the overhead question, overhead cost. Of the target, 20% of the recruit, we kind of accomplished that during the Q1. And it's a trend for the Q1 to experience a high labor cost in comparison to actual number of the employees.

We got the Star Balloon. 11 Star Balloons. Thank you. Thank you very much for that. Oh, there is more. Thank you for all these Star Balloons. And also, he sent out an emoji, which says 100 out of 100. That's great. Thank you, all. There's another one who's joining us as a user participation.

I think he or she is being connected right now.

These new emojis, I can see that money has gone in there. It's a very nice emoji now.

Can you hear me?

Yes, perfectly fine.

I am from Kyobo Research. My name is Kim Han Kyung. So my question is on the original contents. I think some of you -- one of you have briefly mentioned, but I would like to hear more details about your plans for the original content production. And if you look at other platforms, so streamers led contents are being developed and shared and it's quite popular. Now on the AfreecaTV, I know your focus is on the live content. And also, there's like the ecosystem where the insiders really enjoy the content there, not much of the outsider. So my question is, do you plan to make any -- the content, original content where you can appeal to non-AfreecaTV people? And which -- this also means like do you have anything to attract people who are never on the AfreecaTV ecosystem? And if you have a plan like that, would that be AfreecaTV initiative or would that be supporting the BJs to take that initiative? Now also question is on your plans for the VOD production.

Thank you for that question. When it comes to original contents, I think it is highly correlated with our VOD content as well. And in fact, we have not been aggressive for original content, to be honest with you. But about 4 or 5 years back, we established a subsidiary named FreeCon where the development and the planning of the original contents are being done. So basically, we have that as a way to support us and have that basis because they will play a pivotal role as we further expand with the original contents business. And I saw the need to expand and strengthen our VOD. And we have the Ad Balloon, the User Clip. You can see these are helping the VOD business to take off. And like, Mr. Kim Han Kyung, you just mentioned, AfreecaTV's VOD, if you look at it, it's never going to be enough if it's only for the insiders. Having said that, we cannot create the VODs and start the strategies to focus on outside people because we want to make sure that we keep those inside people on and staying with us. Because 30% to 40% of the AfreecaTV people, they watch VOD, but I think that number needs to go over 50%. And that's what we're doing right now, making sure that number goes up. But we cannot just wait and not do anything. And so we want to make sure that in line with that, we're going to really focus on the original content as well, mostly from the second half of this year. I'm sure you remember, but either live or VOD streaming or OTT, whatever it is, the services on our platform, it all comes down to the contents. And it has to do with the MUV as well. People have -- like, for example, I have only 3 hours to spare, and I could choose either Netflix or YouTube or OTA TV or AfreecaTV. So in a limited time, we need to expand our contents to attract people and become the choice of the people who have the spare time. So that's what we're going to work on. As for the original contents, again, we -- what we did was to support the BJs to create the original contents. Now that does come with some limitations for sure. My plan, therefore, for the original contents will be focused on our initiatives, our platform's own initiatives. And that's where the FreeCon, the production and planning subsidiary comes in. So they're going to be playing a pretty important role there. Now it's going to be in the format of the VOD. And the traditional or the legacy media have, for a long time, used a format, which some part of it is going to be taken by us as well. But when it comes to what goes inside that VOD, we can be very creative and innovative because we're the new media, not the legacy media. So we'll have both the balance between the legacy format and the new format. So for example, we have some famous BJs on AfreecaTV. We're going to work with them. I don't think we can do the same thing as we did. Original contents has to be different. We have to have a medium, which can be not our BJs, but it can also be somebody not our BJs. BJs will be in, but we can also have people from different platforms, could be the influencers or it could be somebody from like celebrities from the legacy media. But our BJs will definitely be in and be at the very center of it. Another thing is because we -- the platform will be the -- we're taking the helm. It's not going to be a onetime off event. We're going to make sure that there's a sustainability, and we're going to continue on with some long-term perspective. Our BJs have certain fandom for sure. And what we are asking for is that -- we're going to have that fandom of our own BJs as the basis of it. And not just the BJ specific, but we, as a platform, could be on IP with the -- from the contents. Meaning that later on, those people who is not a particular fan of a BJ could also join us because it's not fandom-specific, it's not BJ-specific. It's more for the overall content that will attract people from outside the AfreecaTV ecosystem. I hope that answered the question.

While listening to you, I -- it really resonated with me because right now, within AfreecaTV, I am doing the Korea's first mobile talk show for mobile game. And I think that is in line with the original contents that you're talking about. Is there any other question? Ad Balloon, yay, thank you. [ Dida ], thank you, [ Dida ]. From Samsung Securities. I have additional question. At last ALCON, the OP margin guidance and the revenue guidance, are you going to change that?

Well, I think if I calculated all the numbers, I feel like, oh, we have to adjust it. But I don't want to take that kind of approach because it's only one -- it's only the first quarter, 1 quarter out of a year. I mean it's quite significant, but still, our guidance is based -- is not based on our previous effort. The guidance is only possible to meet when we put additional effort and something special to what we have been doing so far. So if we adjust the guidance, then my pride will be hurt, I don't want to do that. But looking at the trend, if I were to judge if we're at the point where we have to make the guidance change, I feel like perhaps all the plans were delayed by 1 quarter. The commerce platform is supposed to be opened by now. But this is something that I'm directly involved in, and I thought we were not ready. There were some things that we need to improve. So that is the reason. And for our other services also, there are some of the things that we feel as though we have to take more time. So yes, it's true that the -- my first plan didn't meet the time line that we were expecting. But please stay with us and stay tuned on what is coming next because we will make sure that we're going to show you something fantastic, and we can talk more about that after the Q2.

One more Ad Balloon. Yay, thank you. Okay. Thank you for that additional Ad Balloons. There is more Ad Balloons and Star Balloons. Thank you very much. Great. Moving on to the next question. If we don't have anything yet, let me ask a question. Recently, there is that guess the result service. What do you think of that?

I think we are seeing great responses. And LCK is, of course, with the greatest number of users. Now this user participation is very important and the guess the result service is one of that. So betting is always very fun and people love it regardless of your age, who you are. So we want to make sure that our viewers aren't just a passive spectator. Rather, they participate as they participate, as they guess the result and get the feedback and et cetera. It's not really about money as part of that betting but more of an engagement. I looked at the reviews and feedback of the users. And it's actually in terms of the gem. And they said, oh, I lost all of my gems accumulated because of the wrong betting. But again, this is all about a fun element. And I think that service is pretty successful already. And with that as a starting point, we would like to have users, the esports users to be more active participants rather than passive spectators.

Thank you. Okay. Do we have another question? Or if not I don't think we have any other questions just yet. How about -- never mind. Thank you very much for the 2 Star Balloons. I know that BJ personally first. Next question is up there. From [ Aiwa Securities ], my name is [ Euk Jun ]. There is a story about the platform, and I believe the concurrent broadcasting would be allowed. What do you -- what is -- could you elaborate on that?

This question, which has to do with simultaneous broadcasting, is a very tricky question. What I would like to say is that simultaneous broadcasting on our platform and another platform is not allowed, at least in AfreecaTV. What that would mean or result in is that influencers will have to make a choice, either AfreecaTV or some other platforms. And yes, I understand the competitors are also changing their policies when it comes to that. Or actually, I'm not very much aware of the details, and I will look into it later. So when it comes to simulcast or a simultaneous broadcasting, right now, we're not going to allow it. And let me look into it further, and then I would like to provide an answer. For the streamer and attracting new streamers, I cannot do it on a personal basis. And whether we want it or not, different platforms have different genre in a way. So like in a particular genre, the AfreecaTV is stronger. For the other genres, the other platforms are stronger, but that is evolving always. So I know there are some other people that are working, active in other platforms for us to attract people and bring it into AfreecaTV. We need to convince them that they can enjoy better opportunities here in AfreecaTV. So as for the League of Legend, LoL, I think we have a great opportunity with that. And we're already working on it. And another is making sure that our BJs don't go somewhere else. That will have to do with strong platform. And what that means is that better services to them, better support to our BJs, and I think that's the only way forward.

Next question. I'm Kim Dohyoung. There's the Qatar World Cup and Asian Games. And as we saw in 2018, there will be new users who are coming in. What is your strategy to retain them and also transfer them to core users?

Yes, looking at our previous years, the retention rate was lower than we expected whenever this type of mega events happened. And this is something that we were thinking about how to boost that. I think that has to be linked to the content strategy. As I said, the format or the form of these are quite -- if the format looks too different from the existing media, then it's going to be a little bit jarring for the viewers. But then the content itself should be unique. But those people who want to watch the World Cup match, and they will come into the AfreecaTV because it's convenient. And then even if it's by the content provided by great BJ, but if you're not interested in that, then it's useless. So how are we going to tackle this? Content is the key. Content is the power. Content is the energy. So we really have to make sure that our contents can be -- can have popular appeal, more universally appealing and that's the strategy. So this is something that we're pursuing right now. Oh, another Star Balloons. Yay.

They gave us 100 score -- 100, so A+. Yay. Thank you.

Oh, many questions.

CLSA added a question. [ PU ], the active BJ and users staying time, how is it for the April?

Yes, April [ PU ], those indicators are available, but we cannot disclose them. But the April is going to be the same as the first quarter. Yes, we'll be able to communicate this with you at our next ALCON.

Additional question, branded contents. You said there is an increase in demand. My question is, could you be more particular -- detailed on it as to what genres are seeing greater demand?

As for the first quarter, the game advertisers were really strong. They had bigger demand than nongame advertisers. So -- but that's not the end of it. Hold on a second.

I also have won ads on the games. And we're actually the best and most optimized platform for the game ads.

Okay. So as for the branded contents, the game advertisers took up 90%, but the platform ads, 65%. Like I said, third and fourth quarters are usually the very high time and peak season for the advertising market. First and second quarters are a little slower. Usually are the ones who have been with us for a long time or those who are in a fierce competition like to have stronger ads running on the first and second quarter. But anyways, if you look at the second quarter and the trend, the non -- the reopening markets, those who are opening up again after the COVID -- post-COVID are really strong with the ad demand, especially the film industry and also the travel industry. Those companies are knocking on our door to have more ads running up. Now we're going to be very keen and working very closely with them to make sure they become our advertisers.

I hope that answered the question, Mr. Kim Dohyoung. Yes, the -- even though we had the Beijing Olympics, the MUV decreased. What is the impact of the broadcasting rights on the sports games? And do you plan on to secure those rights in the future?

Yes, the broadcasting rights definitely is translated to the traffic. But we have to kind of calculate wisely. Beijing Olympics case, according to our internal review, the traffic did not meet our expectation. I don't think that's just us. I think the Beijing Olympic games itself, compared to other Olympics, did not meet the expected effects in other industries, too. So broadcasting rights is quite important. It's still important. And if you see the Premier League, the British Premier League, we have been broadcasting that for a while, but we stopped it because we thought that we didn't reap the enough profit out of that comparing to how much we invested. So we have to make sure that we get the right amount of profit. So we have to choose wisely, pick and choose and be selective about that.

Next question. I believe that was the last question.

Well, let me add to broadcasting rights. I think this Asian Game is very meaningful to us, in particular, because this is the one that will have the esports as the official game for the first time. So this esports game, if say -- the Korean team goes to the final rounds or if not, well, there are many really well-known players, and they will be broadcasted out to the world. So usually, when you say Asian Games, we don't have high access expectations. But given that there's esports to be added as an official game, I think this could be a very strong appeal point to our users. As for the World Cup, our users love it every year, and we're going to continue with that investment, of course.

Asian Game with esports as an official game, okay, that must be very meaningful to AfreecaTV and to the industry. I do believe that I can ask one last question. Now COVID-19 seems to be over, and there's no social distancing measures anymore. Would that mean AfreecaTV will host more off-line events?

Yes, we had a -- we will have a town hall meeting in [ Kapyong ], I believe, in May 18. So that's going to be the starting point of the off-line events again, come back basically. During the COVID-19 pandemic, BJ engagement was not as strong as we would like because of the physical limitations we had to confront. So what off-line event means is that stronger engagement, and it means a lot to us especially with no longer social distancing measures. I think off-line events will be very active, not just in our industry but in different industries as well. For example, in the midnight, everybody is out and drinking and dancing in the clubs and et cetera. So not only for these industries, but to the advertisers, I think it's a great opportunity. And for the BJs to go out to the off-line and have a really in-person relationship with our users and with us as well, this makes our platform a lot more attractive and a great way to communicate with one another as we can exchange feedback. So yes, we're going to focus very much on the off-line events as well this year. You have -- have you been with us on the off-line event?

No, not yet. Well, I've only been a BJ for a year, and this has all been during the COVID-19.

We have like the town hall meetings, the sports events with the BJs. And now that you are with us here you can join us. Usually, you have to go through the registration process. And we always give priorities to people who have not been with us many times. We give priority to the new BJs. Now you can be on that priority list.

You talked about the sports game. That could be on original contents already by itself.

Yes. Sure.

I don't think we will take any more questions. All right. So how about the last words before we close.

Yes. The first quarter always comes with a big expectation, high expectation. But honestly speaking, it didn't quite meet and fell short of it slightly. But that does not mean though that we're not doing anything. And in fact, you should think of it as just time that we wait. We are doing everything on the basics. And from second quarter, I think we'll bring speed to this. We have a lot of plans. We're going to make sure that we deliver on time and great uses will be shared with you in the second quarter. So thank you very much.

All right. Ellen?

Yes. This was a new format with the user participation. And because we did it, it's something the BJs, a lot of BJs are using, and the quiz shows are already being utilized quite well. And as a platform, we're always thinking about how to make contents fun, engaging and interesting. So also users, as they participate, I think they will become more attached to our platform. So that's why we're going to take full advantage of this. And that's why we made this great attempt. I know it wasn't like as smooth as we want to, but I hope you understand and it will get better with time. And again, like guess the result game, the user participation, all of that, whenever new ones come out like that, I hope you stay tuned and stay -- really enjoy what we have.

I mean these 2 people, they speak so well. I don't think I can ever follow their footstep. Anyway, thank you very much for your active participation and especially who used the new feature of user participation. And we look forward to coming back with good news next time.

Thank you very much, everybody, for joining us today. How was the ALCON? Was it fun for you? Was it fruitful? And I hope we answered all your questions fatefully. If you have any suggestions on ALCON, then feel free to leave that on our chatroom or you can send us the e-mail to our IR room. I will be back with more good news next time. Thank you very much. Bye-bye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]