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Musical.ly May Be the Spoiler in Livestream Race with Launch of Live.ly

The momentum already propelling the livestreaming category from Twitter’s Periscope and Facebook Live accelerated even further this week as two other major platforms, Tumblr and YouTube, unveiled their own competitive offerings.

And yet don’t be surprised if a third, less-ballyhooed launch emerges as the sleeper that gives them all a run for their money.

Musical.ly, a Shanghai-based social network that has astonished the industry by amassing a global audience approaching 100 million mostly teenage users in less than one year, is spinning off a second app, Live.ly, that will also focus on livestreaming. After a soft launch in May, Live.ly went live in the iTunes app store Friday, and began trending instantly despite zero promotion because of the word of mouth from Musical.ly’s rabid user base.

Make that “muser” base: that’s what Musical.ly calls the predominantly young, female-skewing creators who once only shared video clips of themselves lip-synching to popular songs on the platform. But now a broader range of entertainment options is finding traction on Musical.ly, which decided to open Live.ly to give those musers a broader canvas on which they could express themselves.

Both apps will be integrated with each other; once Musical.ly starts to formally introduce Live.ly to its users, a livestreaming category that has plenty of big entrants but no clear winner yet will get a new player capable of scaling as quickly and massively as the others.

Musical.ly has already started to spread the word here about Live.ly here at VidCon, the annual conference dedicated to digital creators in Anaheim, Calif. The company brought together dozens of its biggest musers on a stage on the exhibition floor, which it livestreamed to 130,000 users.

While VidCon is dominated by YouTube and inroads are being made by the growing presences of players like Instagram and Twitter, Musical.ly is drawing plenty of buzz here among fans and industryites for its seemingly overnight success.

Musical.ly was forced to shutter a performance Thursday by one of its most popular users, Jacob Sartorius, because an estimated 1,500 showed up at a venue too small to accommodate them, forcing them to reschedule to a bigger stage later in the day.

Fitting for an event that hosts a new breed of digital-native celebrities popping up everywhere from YouTube to Vine, Musical.ly is building a roster of its own talent. But while the first generation of musers came to prominence on the platform by mouthing the words to other people’s songs, Musical.ly is seeing more of its homegrown stars attract audiences with comedy, fashion, dancing, and other forms of entertainment that may find more of a home on Live.ly, too.

Sartorius, for instance, now has an original song, “Sweatshirt,” climbing the charts just behind real performers like Drake and Beyonce.

“The amount of lip-synching is decreasing,” said Alex Hofmann, president of Musical.ly’s North America division, in an interview. “We’re now seeing huge growth with other kinds of videos.”

The diversification of content types could mean Musical.ly starts to be mentioned in the same breath as other juggernauts like Snapchat. Hofmann said 50% of U.S. teenagers have the app, and the next phase of growth is likelier to be fueled overseas, where Musical.ly is starting to take root everywhere from Germany to the Philippines.

Hollywood has taken note of Musical.ly as well. Chart-toppers like Ariana Grande and Demi Lovato have graced the platform, and TV shows like “Good Morning America” have played around with the app on air.

Musical.ly has taken note of the entertainment industry’s interest, having just opened an office in Los Angeles focused on striking partnerships (the company also has offices in San Francisco).

One difference Live.ly boasts compared with other livestreamers that is sure to interest content creators: Musers can make money through direct payments from users via virtual gifts, a system similar to another livestreaming app that has made significant headway with young consumers, YouNow.

That’s the only way musers can monetize on either Musical.ly or Live.ly, where Hofmann says he has managed to keep top talent around because of the amazing engagement that helps them earn on other platforms. That means a lot to top musers like Ariana Trejos, a 15-year-old Florida native known on the platform as @theylovearii. “Money is not what matters to me,” she said. “The rate of engagement when people see my videos is what matters.”

But the company is exploring other monetization options. “We are looking at ways to make money so we are in the process of experimenting,” said Hofmann.

Of course, Musical.ly is not the first app to come along and experience growth thanks to lip-synching; Dubsmash is another brand that shot out of nowhere, though hasn’t hit as stratospheric a height as Musical.ly. And there are no guarantees that either of these brands can continue their growth curve given the notoriously fickle nature of young consumers or expand into other content areas. But where Musical.ly is right now couldn’t provide a better head start for Live.ly as the livestream market continues to take shape.

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