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The Rise of Livestreaming in China

In a few months since the first launch, video livestreaming has grabbed the attention of millions of bored Chinese netizens. Not only is this new medium of entertainment fresh and innovative, it is now a lucrative business for popular broadcasters and a powerful marketing tool for big brands.

In a few months since the first launch, video livestreaming has grabbed the attention of millions of bored Chinese netizens. Not only is this new medium of entertainment fresh and innovative, it is now a lucrative business for popular broadcasters and a powerful marketing tool for big brands.

Video streaming channels can have anywhere from a few hundred thousand to a few million watchers, creating a powerful way to reach and interact with people.  Advertisers have jumped on board the viral trend and we are now seeing the lines blurred between advertising and reality television; a kind of hybrid media channel that we have not experienced before.

When you open a livestreaming app, it looks a little strange; almost like a dating app.  You are presented with a catalog of young and attractive men and women, many of whom are showcasing some sort of “talent” like playing an instrument or dancing.  The pictures on the homepage of the app are to entice you to click on their ‘portal’, get access into their world, and become one of their followers.

The number of video streaming apps available to download continues to rise as the livestreaming phenomenon grows more widespread.  Many apps enable users to send virtual gifts or other tokens of praise (a similar idea to a Facebook or Instagram ‘like’) that they have purchased for real money. The person who has received the gifts (virtual diamonds, cars etc.) can convert these ‘gifts’ back into real money, with a percentage of the money paid to the video sharing platform.

How much can broadcasters earn? Many broadcasters claim they can earn about 20,000 yuan a month (approximately USD3,000) with some of the more popular broadcasters earning as much as 1 million yuan ($152,000) a year. To maintain this kind of income they typically have to broadcast around 100 hours a week.

Why are people so interested in livestreaming?

One of the reasons could be that it is new, exciting and unpredictable.  In a world where many things are censored, staged and curated, it is novel to be watching someone’s daily life in real time; to see how other people live behind closed doors and to interact with someone hundreds of miles away.  The second reason is that it is a free and easy way to pass time if you are bored and cure loneliness.  Watching livestreaming is cheaper than a gym membership, cinema ticket or dinner out with friends, and is more exciting than just video surfing on Youku (China’s equivalent of YouTube).  It also gives you the experience (or illusion) of a shared experience and interaction with someone.

Right now we are seeing the video streaming market shift closer towards advertising.  More and more livestreaming apps are integrating shopping capability, and shopping apps are adding a video stream option for their vendors to use.  Tmall and JD are two online shopping giants that have updated their platforms to integrate livestreaming capabilities, enabling vendors to have instantaneous interaction with their customers/audience to promote products.  This creates a stronger brand connection and boosts brand loyalty; in this way we are seeing video livestreaming change the landscape of the advertising industry.

Some of the most popular live streaming platforms in China currently are:

  • Xiandanjia
  • Yingke
  • Yizhibo
  • Momo
  • Miaopai; and
  • Panda TV

Momo, a social dating or ‘hook up’ app for meeting people, reported that since adding livestreaming in late 2015, its revenue increased by 15.6 million yuan ($2.35 million) in just the first quarter of 2016.  Livestreaming quickly became the company’s largest revenue stream.

Facts and Figures 

The livestreaming industry boom continues to provide huge business and investment opportunities.  According to CNBC, livestreaming revenues in China between June and August 2016 reached 1.7 billion yuan ($246 million).  The boom is attracting many tech entrepreneurs keen to cash in on the trend, with new apps such as Panda TV, Douyu TV, YY, Inke and Momo seeking a foothold in the increasingly crowded livestream app space.  Portal and micro blogging giant Sina, instant messaging and gaming company Tencent, and video streaming sites Youku, Tudou, LeTV and iQiyi are also reacting quickly to stay up to date with the trend.

Hua Chuang Securities claims that the livestream market will grow to 106 billion yuan ($16 billion) by 2020 as brands begin to advertise on the apps and users pay to watch their favorite personal reality shows.  Chinese e-commerce giant Alibaba hired actress Liu Yan to broadcast her shopping trip on the company’s group-buying site Juhuasuan, luring millions of viewers who were then showed purchasing links of the items Liu was trying on, stated Forbes.

Livestreaming is creating its own ecosystem of “celebrities”, gaming, and advertising, with no signs the trend is set to slow down.  It is an unprecedented communication medium, challenging the “old fashioned” texting and voice messaging, and brings with it unprecedented security issues for officials in Beijing.  CNBC reports that as of 1 December, content providers need to obtain qualifications and identification information from their broadcasters, and closely monitor user data.

The close watch of Beijing, however, does not seem to put off the millions of viewers and thousands of broadcasters who are only too eager to participate in this ‘new world’ of entertainment.  Here at HI-COM we will continue to watch this streaming trend with interest.

Have you caught the livestreaming wave?  What are your thoughts on this new trend?  Do you see any potential risks or issues? Shoot us an email!  We would love to hear from you.

Kate CHERNAVINAThe Rise of Livestreaming in China

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