By Miguel Hanz L. Antivola

THE post-lockdown landscape has resulted in limited time for livestreaming engagement, as people now give more importance to using their resources for expenses like transportation and outdoor activities, according to social entertainment and local livestreaming platform kumu.

This has led to a shift in the strategies of the platform, Rexy Josh L. Dorado, co-founder and president of kumu, said in an interview with BusinessWorld.

The company shifted its focus towards sustainability in 2022, moving away from the growth mindset it had previously embraced.

By reassessing its strategies, kumu aimed to optimize its operations and ensure that it remained relevant in the face of shifting demands, Mr. Dorado said.

“We had to adjust our growth expectations and ambitions to a timeline of three to five years instead of 12 to 18 months,” he said.

“This required focusing on cost optimization, scaling back infrastructure, and finding a pathway to profitability for the company.”

In addition, kumu has begun exploring and investing in offline or in-person events and other aspects of the entertainment ecosystem, considering the gradual reopening of the metropolitan area.

“This leads us to view kumu not only as a livestreaming app but also as a creator and community hub,” Mr. Dorado said. “How can we serve them in the best possible way?”

Despite the challenges, kumu has strived to provide a leaner and more sustainable foundation, accomplishing more with fewer resources, for the country’s top creators, according to Mr. Dorado.

“For example, the things we did on TV drove a lot of traction for kumu, but they were big investments for us,” he said.

“The alternative to that, post-COVID, is how do we build more upstream, early-stage partnerships, instead of having to come in as a sponsor?”

“It’s really holding onto what’s necessary for us. And how do you do it in a way that’s most efficient but still brings value to our creators?”

HOW IT STARTED
Livestreaming platforms have sparked a major shift in the way content creators generate income, offering them a game-changing alternative to relying solely on advertising revenue or sponsorships, according to Mr. Dorado.

“There’s this potential — if you can really put the right resources behind Filipino creators, you can get the same wave that the Korean culture had,” he said.

“Becoming the best partner for Filipino creators who can power the next wave of Filipino film, TV, and other emerging mediums is really exciting for us,” he added.

In October 2018, kumu introduced virtual gifting, enabling streamers to earn money by showcasing their stories and talents during live broadcasts.

“I think the goal was always to create something that would provide income and livelihood to Filipinos,” Mr. Dorado said.

The Philippine Statistics Authority recorded an unemployment rate of 5.3% in 2018, which corresponded to 2.3 million unemployed individuals in the Filipino labor force.

The underemployment rate stood at 16.4%, affecting 6.7 million people. Underemployment refers to employed Filipinos who desire to have additional jobs or work hours.

However, in April 2020, the unemployment rate reached a record high of 17.6%, while the underemployment rate reached 18.9%. These figures starkly showcased the severe impact of the coronavirus pandemic’s economic shutdown on the labor market in the Philippines.

The lockdown also led to increased patronage of community livestreaming, which had become an avenue driving further growth for kumu and its creators.

“With livestreaming, there was a way to generate alternative income for people without needing millions of daily active users,” Mr. Dorado said.

“You could be a creator and have just ten hardcore fans or one loyal gifter,” he noted. “And that supporter can cover all your expenses and enable you to live as a full-time creator.”

The creator economy of kumu has provided approximately 1,700 individuals with an income of about P20,000 per month, with some earning up to P175,000 per month, according to James H. Rumohr, co-founder and chief of staff at kumu, speaking at the Internet and Mobile Marketing Association of the Philippines’  Digicon Valley 2022.

In addition to brand, TV network, and other partnerships, kumu said it remains committed to exploring the entertainment ecosystem to expand its reach and offer opportunities for entertainment creators to make their mark in the industry, both locally and globally.

Despite sharing similarities with social media platforms like Facebook and TikTok, kumu said it aims to differentiate itself by championing Filipino talent and reaching a larger audience.

Founded by Filipino diasporic entrepreneurs with experience in technology and humanitarian startups, kumu was created with the goal of building a scalable business through a messenger app that specifically caters to the Filipino population.

“We realized that with a messenger app, we could empower people to create their own media brands, apps, services, and products,” Mr. Dorado said, citing examples like WeChat (China) and Kakao (South Korea).

“However, we quickly discovered that this wasn’t what people wanted,” he added.

As a result of its growing traction, kumu’s founding team pivoted towards livestreaming, dedicating efforts to developing additional features and unique characteristics within the platform.

GROWTH AND INVESTMENT
Part of the platform’s expansion involves providing opportunities and making investments to accelerate the careers of its creators.

Currently, kumu has reached approximately ten million app downloads globally, with communities encompassing various interests such as musicians, sports enthusiasts, comic lovers, and mental health advocates, among others.

“In 2019, we experienced a fifty-fold increase in the volume of transactions on the platform,” Mr. Dorado said. “When the lockdown began in 2020, we grew by around ten times.”

Mr. Dorado attributed this growth to people coming online and creator-artists adapting their previously in-person gigs to the kumu platform.

“They could simply stay at home, engage with their top fans, and have complete independence in creating the kind of content they desire,” he said.

“And they could actually earn more compared to spending the entire day traveling to the studio and engaging in all of those activities,” he added.

kumu has made investments that include music recording contract contests, billboard opportunities, and partnerships with TV shows.

“That was the paradigm shift that occurred in 2020… Investing in these initiatives to help accelerate the careers of our streamers and expedite the organic trend we were witnessing, which involved creators turning to kumu as a replacement for their existing income.”

STRATEGIZING PRINCIPLES
As a startup that has encountered several detours in its journey over the past five years, the platform said it acknowledges the significance of striking a balance between consensus and non-consensus approaches in its strategies.

“We greatly benefit from involving external investors and advisors,” Mr. Dorado said. “It has always been a significant aspect of our culture.”

“However, what we are working on is quite distinctive. This implies that in certain cases, you have to rely on your intuition regarding matters that differ from the common consensus,” he added.

“kumu operates on a fundamentally different scale of business compared to perceived competitors like TikTok and Instagram, which operate in various contexts,” Mr. Dorado said.

Milage from applying ‘plug and play’ business principles and insights will vary, he noted.

“Some of the costs and mistakes we ended up making — we maybe took some of those lessons too much to heart.”

“And then we realized that actually doesn’t fit at all with our personal context, and we had to do things very differently because of this particular market we’re in and particular community we’re engaging.”

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