Nasdaq-listed Chinese news aggregator app Qutoutiao has been developing two short-video apps since July, in a bid to diversify its revenue sources and compete with larger rivals Douyin and Kuaishuo, local media TechPlanet reported on Monday.
The two initiatives will apply the “cash reward model,” meaning that users can get cash credits by consuming contents on the platform or referring their friends to the apps. Although burning cash, such a scheme has helped bolster Qutoutiao’s frantic growth after its debut in 2016, especially among users in lower-tier cities.
The two apps are set to launch before the end of this year and could be merged in the future, the same report added, citing people with knowledge of the matter. They are led by Li Jing, the head of popular free-to-read mobile literature app Midu Novel, and an unnamed executive poached from ByteDance’s Douyin.
It’s not the first time that Qutoutiao has dabbled in the country’s competitive short-video sector, where Douyin and Kuaishou are the top players with more than 200 million monthly active users (MAUs) in 2018, according to Chinese business data provider iiMedia.
Previously, Qutoutiao released two video-sharing apps–Quduopai and Qiuqiu Video, but both proved to be unsuccessful partly due to a lack of fresh features, industry watchers said. The latter is currently unavailable from both Apple and Android app stores for unclear reasons.
Qutoutiao’s push for short-video business is part of a wider effort to diversify its business operations, as its user growth has been slowing down and once-promising Midu Novel remains offline since being taken down in July for not complying with regulators’ content guidelines.
The company, which has both Tencent and Alibaba as its backers, booked a net loss of USD 81.8 million in the second quarter of 2019, representing a year-on-year increase of 165%, its latest quarterly financial report shows.
It claimed to have 119.3 million MAUs in the same period, a 7.1% quarter-on-quarter increase, while the average daily time spent per active user was down to 60 minutes from 62.1 minutes in the previous quarter.
In September, 36Kr reported a leadership shakeup following the less-than-expected performance, in which at least five middle-level managers left.