The Rise of Live-streaming in China

China’s live-streaming industry has more than doubled in size compared with previous year, with about $3bn revenues according to Credit Suisse. More than 100 companies offer the live-streaming service and provide the performers with a hefty cut of their earnings. One example is YY, which is publicly listed on NASDAQ with $269m in gross revenues from live-streaming in the third quarter of last year. It is a year-on-year growth of more than 50%.

In July 2016, 4,313 online show rooms were forced to shut down according to the announcement released by China's culture monitoring authority and more than 18,000 live performers were fired or punished. A total of twelve platforms were involved, including Panda TV, 6.CN and Douyu. These platforms were punished and ordered to make changes since they were believed to have spreading illicit content that “promotes obscenity, violence, abets crime and damages social morality”. Still, this action hasn’t impacted thousands of young Chinese who dream of becoming internet stars.

Live-streaming apps now are still very popular in China. As of December 2016, data showed 47 percent of Chinese Internet users watched live-streaming sites. Among nearly 150 live-streaming platforms in China, most of them produce entertainment shows. Nearly half of the 710m people with internet connections in China have used live-streaming apps.

What live-streamers broadcast online may include every aspect of their everyday lives, from playing games online to putting on makeup, singing and dancing, and many of them are full-time broadcasters. Live-streaming shows more influence in lower-tier cities than elsewhere in China. This is because these third-tier cities or remote rural areas have limited entertainment options for young people to enjoy. Hence the internet becomes the one and sometimes may be the only fun and cheap place to hang out. These personal broadcasts are not simply interesting videos, fans can also have interactive experience with broadcasters. They can make requests, chat with their idols and give them virtual gifts.

Many Chinese internet giants have started to follow this successful business model - live-streaming business. The rapid growth of live-streaming in China has attracted a rush of investment, led by China’s tech heavyweights, Tencent Holdings, Alibaba Group Holding and Baidu Inc. They hope they can boost their online business such as e-commerce, social networking and gaming by live-streaming. Tencent, China’s biggest online gaming and social networking company, is supporting some streaming and interactive entertainment firms, including gaming platform Douyu. Earlier last year, Alibaba's Taobao marketplace allowed sellers to promote products directly to online viewers in real time by launching a live-streaming platform. Under such circumstance, pioneers like YY and Six Rooms have to compete with such big and powerful social platforms like Tencent.