Many have realized that live-streaming is not just a hot business for the year, but also a portal to bring in traffic in future
When Wang Sicong, the son of China’s richest man Wang Jianlin, promoted a live-streaming app known as “17” on his personal Sina Weibo account, the app skyrocketed to the first place on the app store within days.
It was a startling demonstration of how popular live-streaming apps have become in China. Despite the fact they have existed in some form or another for over a decade, their explosive growth has come recently, with growth in users jumping by 61.66% between 2015 and 2016.
Amid this growth has come new regulations, particularly with regard to pornography, but even restrictions breed opportunities.
“Americans don’t need Periscope to watch pretty young women,” Cao Xi, a Sequoia Capital China venture capitalist told the Wall Street Journal. “In a country where porn isn’t available, this market is pretty good.”
For individuals and apps, optimizing content to attract traffic is certainly important, but things can easily go wrong if not handled carefully. 17 is an example. Shortly after the number of downloads surged, 17 was removed from Apple app store as too much pornographic content was being generated. Later, similar issues occurred on other apps and the Cyberspace Administration of China further tightened regulations on live-streaming, requiring each platform to get an operation license and log user data and content for 60 days.
Bigger Players Climb Aboard
Though 17 had fallen by the wayside, demand for live-streaming apps remained strong.
Ingkee was there to fill the void.
Designed with social networking goals in mind, this live-streaming app is now a leader among its competitors. CEO Feng Yousheng, who is also a CKGSB Chuang Community student, credits Wang Sicong with drawing attention to these apps. A former civil servant, Feng says he “knows the policy and the bottom line” and has 800 staff members watching and managing content around the clock and suspending any inappropriate streams.
Wang Sicong has also dipped his toes in the live-streaming waters. After investing in 17, he launched his own live-streaming platform based around online gaming. Titled Panda TV, Wang says that gaming has a lot of potential for generating fan bases among Chinese youth. In a BBC interview he said, “Everyone has their own ideas, so what they do is they put on a mask and they go through life with a mask. Why is online gaming so popular in China? Because once you go online you can take off that mask and say what you really think.”
There are certainly good reasons to get on board with gaming live-streaming. A report by iResearch shows that the number of people watching gaming-focused streams increased 97.8% from 2015 to 2016, and user numbers will reach 150 million by 2017.
China’s internet giant companies have long recognized live streaming is a big source of traffic. So just like their competition on other battlefields, Baidu Tencent and Alibaba have spread their tentacles to live-streaming and mapped out respective businesses.
See the infographic below and find out how they back up different live-streaming platforms.
According to TalkingData, 65.4% of China’s live-streaming apps are related to “lifestyle” which is a broad category that excludes sports and online gaming. Live-streaming celebrities make up a big part of its content.
Plenty of users are making a living this way, often via virtual “gifts” which viewers can buy and send to a celebrity, who can then trade it in for real cash. IMc Tianyou, a grassroots celebrity, earns RMB 2 million a month by live streaming on YY; Fu Yuanhui, the Chinese swimming bronze medal winner, interacted with fans on Ingkee for one hour and received RMB 3 million worth of virtual gifts (although she kept telling fans not to spend money for her on live-streaming apps).
23 year old Harrison lives in Shanghai, watching live-streaming celebrities closely, he once tried streaming himself.
“As a new live stream performer, not as many people notice you” he said, “and the worst thing is when no one interacts with you, no one sends you any messages, and you still need to say something or do something, which is a bit awkward”.
Astrologer Fanfan doesn’t have many fans either, but she is using live-streaming to help her Tarot business. “Being a live streamer, even being a regular one on a platform (this means they are contracted to be available for requests at certain hours each week) doesn’t bring you cash straight away, but it can give you a high rank on the homepage, that’s how you get more exposure. And the rest lies in how you attract fans and what you do to keep them stay.”
Once, during a live stream on Douyu by a famous League of Legends commentator, the number showed 1.3 billion people were watching at that time—1.3 billion is China’s entire population. The fact data is exaggerated is an open secret in the live-streaming business, streamers know it very well that the actual user number might just be 1/10 of what was shown on the screen.
So regardless of what mirage platforms are offering to make investors happy, the live streamers are very aware of the state of the industry.
“This is not very stable, and can only be a side business” said Thor, a notable live streamer on Panda TV, “No matter how much I earn now, it’s not sustainable. What happens if they terminate the contract? Or the platform itself is gone one day?”
There are other grassroots celebrities who have the same concerns. Although IMC Tianyou makes RMB 2 million every month on YY, he is seeking opportunities offline as well. He recently performed at a concert and played a role in a new movie.
For these internet celebrities, there’s only one way out, says Thor. They need to figure out how to turn their brand into cash. But how do so many similar live-streaming platforms stand out from their counterparts?
Wang Chuanzhen, an analyst from market research company Analysys says content and social networking functions will be the key terms in the next round of competition. In the future there will be only one or two big live platforms, which will integrate lifestyle, entertainment, sports and gaming.