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Business

Investors seek out Japan's next hit app

TOKYO -- Japanese Internet startups are producing apps that have gained millions of users worldwide. Some of these venture companies are also attracting millions of dollars from investors hoping to get in early on the second coming of Line, whose online chat app has seen global success.

     TwitCasting is a smartphone app that lets users stream live video from their smartphones for free. "We wanted to create a video sharing service that everyone can use easily," Yosuke Akamatsu, founder &CEO of the app's developer, Moi, said.

The TwitCasting live video streaming app has grown in popularity.

     The app lets users post text comments while watching video, facilitating active communication between content providers and viewers. 

     Japanese teens and twenty-somethings were the first to start using the app regularly. Its user-friendly interface has facilitated its rise: People have posted videos of everything from make-up tips to snapshots of daily life. Outside Japan, TwitCasting has begun to grow in popularity, starting in Brazil. It now has 7 million users.

     Celebrities, including popular British boy band One Direction and Brazilian singer Ivete Sangalo, are using the app to communicate with their fans. Universal Music is gearing up to launch a TwitCasting page by the end of August for its artists. "It will enable us to deliver information effectively to young people who don't have PCs," a company official said.

     Spotting the sharp growth in the app's popularity, a consortium, including Indonesian conglomerate Sinar Mas Group, invested $5 million in Moi in June.

Cuteness overload

CocoPPa, another Japanese app, is growing in popularity. Developed by United, an Internet ad unit of the Hakuhodo DY Holdings Group, it enables users to make their smartphone screens that uniquely Japanese version of cute: kawaii.

     The app is particularly popular among women, and includes designs posted by female manga artists. CocoPPa's cumulative downloads exceed 25 million. More than 80% of those downloads were made overseas.

     Chinese users have been downloading the app since United began a tie-up with search engine Baidu last year. To bolster CocoPPa's popularity further, United aims to tie-up with more companies, including Chinese microblogging service provider Weibo.

Success formula

TwitCasting and CocoPPa are free to download and use. They generate revenue through advertising. TwitCasting, however, may explore subscriptions if its user base continues to expand. CocoPPa has already started selling some designs on its site to create a new revenue stream.

     These Japanese apps, like Line, have found success partly because they were developed domestically, where smartphone infrastructure is sophisticated. TwitCasting, for example, has developed video compression technology that works well with fourth generation long-term evolution networks ahead of the pack.

     CocoPPa, meanwhile, combined Japanese women's love of cute things and smartphones to develop an app that has, among a certain crowd, international appeal.

     The two apps also found success because they focused on making content produced on their platforms easy to share. This approach has allowed the apps to adapt flexibly to the needs and customs of different countries.

     TwitCasting and CocoPPa let users create and share their own content. Users are therefore doing the work for the apps at no cost. The wealth of content has, in turn, boosted the apps' popularity, creating a virtuous cycle.

     Line's success has led investors to look at other Japanese Internet startups. Their search for the next big app from Japan has made fundraising easier for venture companies. SmartNews, a company with a namesake app that searches social media and aggregates the stories people are talking about, recently announced that it had procured funds totaling 3.6 billion yen ($34.9 million) from investors. 

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