Helen Roxburgh
Sep 26, 2016

Live-streaming invades China

A string of popular apps launched by cashed-up startups are creating an army of content-creating internet celebrities, but concerns over censorship and engagement levels present a challenge for brands trying to get in on the action.

Live-streaming invades China

Live-streaming has exploded in China. This trend has been rapidly gathering speed in the last 18 months, and now has millions of fans in China’s mobile-video market, many of whom stream edgy, sexy content from online stars, or broadcast their everyday life to online masses. Around 50 million people have already downloaded one of the nation’s most popular live-streaming apps, Ingkee, while there are hundreds of live-stream apps competing in the market.

Most feature people doing a range of mundane, everyday activities and attracting real-time comments from live viewers. These live-stream apps cash in by selling virtual gifts: viewers pay real money for digital trinkets to send in the hope of a ‘shout-out’ from the channel host — who then receives around 50 percent of the revenue. 

Tech giants have been keen to cash in on this trend; reportedly 200 live-streaming startups have attracted an estimated US$750 million in venture capital between them so far. Douyu, one of Ingkee’s biggest rivals, raised US$100 million in funding this year from the likes of Tencent Holdings and Sequoia Capital China, valuing the company at more than US$1 billion. It claims to have 120 million active monthly users and 600,000 users who have streamed at least once. Ingkee, by contrast, doesn’t share details on user numbers. 

The most popular streams attract hundreds of thousands of people at a time, and a few famous faces. Wang Jianlin, China’s richest man, streamed a video of himself playing poker on a private jet that was watched by more than 300,000 people.

“Our position is that anything that gets more individuals creating content is great for us and our clients,” says Scott Pollack, managing director, China, at Thoughtful Media. “China today has a dearth of popular independent video creators by global standards. China, the worlds largest online video market, has thousands of independent video content creators who are making money making videos, versus hundreds of thousands in the US and millions globally on YouTube. We love that live-streaming is helping to accelerate the growth of China’s creator population.”

(story continues below)

Future of live-streaming in China lies in specialism, not sex

Benjamin Noyes, senior content strategist, Labbrand

Live-streaming (LS) is exploding in markets all around the world but nowhere more so than in China, where everyday people have skyrocketed to internet celebrity status on the wave of specific cultural tendencies. A mobile-first mindset, massive gender imbalance and an innate inclination to be part of a collective create a torrent of positive reinforcement for young influencers. 

LS in China differs from its counterparts in the West. For one thing, the interfaces are very different — Western LS apps are integrated into Facebook and Twitter, warping the original interfaces. In comparison, Douyu is backed by Tencent, and viewers can log in using their WeChat accounts, but the app runs entirely independently.

How is the actual content different? To put it frankly: a lot of pretty girls. A crackdown recently banned “seductively eating bananas” and other immoral behaviour, prompting Ingkee to more than quadruple its workforce for monitoring. It’s safe to say the future of Chinese LS is not in sex. Instead, it will become more topic-based: think YouTube stars, which cater to a specific audience of gamers, beauty pageant winners, chefs and more. 

But the interaction on LS is the biggest differentiator. Viewers can send gifts — digital emojis and stickers that cost real money — to encourage an action or to get a shout-out, for all 20,000 live viewers to see. There’s an incredible variety: you can gift an ice cube (‘cool’) for 1 gem, a ring for 199, all the way up to a private island for 33,440 gems (10 gems equals 1 RMB). Transactions pull right from WeChat wallet or Alipay, making such micro-monetisation simple.

Where do brands fit in?

Traditional KOL usage naturally fits the LS environment in China, offering added financial incentives for top influencers who can reach hundreds of thousands of people. Brands can also create their own ‘brand mascot’ channel — imagine a McDonald’s LS that features the Hamburgler causing ruckus around Shanghai. Lastly, brands can insert themselves directly into the micro-monetisation process, creating branded emoji’s and stickers that viewers can gift.

Online appetite: Trend is towards niche audiences.

Perhaps inevitably, though, many channels feature attractive women in revealing outfits doing pretty much anything that can be imagined — shopping, playing video games, or seductively eating fruit. 

Cao Xi, of investor Sequoia Capital China, told The Wall Street Journal that part of the success of China’s live-streaming apps is more freedom in a country where content is tightly controlled. “In a country where porn isn’t available, this market is pretty good,” he claimed.

Live-streaming everyday lives seems to tap into a sense of isolation brought about for many from isolating mass migration, or the one-child policy.

“I think they just want company,” says Rebecca Yang, CEO of entertainment business IPCN. “They want interactivity, instant satisfaction, and they also want to feel they have the power to interfere. If you look beyond Shanghai and Beijing, many people might not be able to go to an expensive place to feel good about themselves, but online they are spending a yuan or two, and tens of thousands of people will see your achievements in a virtual world.”

Jia Wei, who runs the live-streaming division for social media app Momo, told Bloomberg earlier this year that the success of streaming was down to China’s wide adoption of mobile phones and “the loneliness brought on by a fast-paced migrating society means people”. Momo generated US$15.6m in gift commissions in its first quarter.

China is by no means the only country in Asia to embrace homemade online stars. In Japan, otaku is the title for sub-culture trends, and online live-streaming channel hosts have become celebrities in their own right — such as Yuka Kinoshita, who gained online fame for being a “gluttonous beautiful woman” (oogui bijyo), with a YouTube channel featuring videos of her eating mind-boggling amounts of food, such as 100 Chicken McNuggets. Brands also have more experience of tapping into these sub-cultures.

In China, brands are only just beginning to dip their toes into this type of project, and for live-streaming in its current form, they might already have missed their chance. Social media is already suggesting fans are getting bored watching people doing everyday things, and channel stars are being pushed to be more edgy to win viewers. These have included pole dancing, bungee jumping, and eating live maggots, while the most explosive content has included a couple having sex on camera and a few women going topless. 

Chinese censors are becoming more wary of live-streaming content. Eating bananas ‘seductively’ online has already been banned, and official scrutiny has forced companies to hire teams of censors. At Ingkee there are reportedly 1,000 people screening every channel for content that crosses the line — almost all apps have been fined at least once.

“I have serious doubts that the live-streaming platforms can continue in the way that they are 

now,” says Pollack. “In order for the audience to care about live-streaming, they need to feel that they can comment in real time, so delaying the content is not a good option, and the question becomes, how can you effectively regulate it.” 

Some brands who have begun to experiment include Durex, which conducted a three-hour live-stream, featuring 50 Chinese couples all in white bathrobes and slippers playing with condom boxes. L’Oréal, Xiaomi and online shopping platform Jumei have also held branded live-streams.

For now, brands are mostly using live-streaming apps in China as a tool to amplify their messages, or to generate sales leads as most of the platforms allow shared links to commerce sites. Data miners can assess the online commentary for celebrity names, product-placement or branded content, but the value of this remains questionable.

Office jinx: IPCN boasts that its “prank-sitcom” trailing the
real-time travails of a group of unsuspecting interns offers
the “spiciest” live-streaming viewing available.

“After filtering out the nonsense, you don’t end up with much in the end,” says Sam Fleming, founder and chairman of Kantar Media CIC. “At best, the danmaku [on-screen] commentary will highlight a popular KOL’s association with a certain brand. There may be some awareness, but it moves so fast, it may be missed. Therefore, if it is not making a real revelation of consumer insight, then brands won’t invest in it. It may be a ‘nice to have’ but not a ‘must have’ at this moment.”

Experts suggest live-streaming will morph into a channel in the hands of professionals, rather than amateurs detailing their everyday happenings.

“I think all different live applications are trying to break through into new ways of making content,” says IPCN’s Yang. “Technology and platforms like this enable diversity and variety. Some people do just want to look at a pretty girl eating noodles, but there is definitely a need for more content for live-streaming.”

Earlier this year, IPCN filmed its first in a new format of streaming in China, which it calls a live “prank-sitcom”. The three week-series featured the IPCN office and real staff for eight hours a day, supposedly launching a new division with new staff brought in and two interns. In fact, the whole department and new staff was a set-up; only the hapless interns didn’t know what was going on.

The series achieved 1.1 million views at its highest point, clocking a total of over 10 million viewerships, and even engaged brand partners.

“We want to push the boundaries of doing business, that’s in the essence of our company. And we had several commercial brands involved in it and they all paid for the content, which was fantastic,” says Yang. “They all participated in their own different ways, but we heavily embedded them into our storyline. The major ones put quite a significant amount of money for a live-stream, considering that no advertising agencies know even how to evaluate it. We sold the content ourselves, and it’s a very young team that sold this story to the brands and convinced them this works.”

Live format ideal for Intel launch

Practical demonstration helped brand reach out to target gamers

To launch its new top processor in May, Intel held a live-streaming event where the host assembled a high-performance computer and tested it with gaming and software. Intel chose to host the live-stream on Douyu app, as this is popular with gamers, the target audience. 

“The Intel case is a great example of ‘technology serving the idea or message’,” says Jeremy Webb, vice-president, head of [email protected] at Ogilvy & Mather China. “We had very specific needs: to demonstrate specific features of a product, in very specific detail, to a very specific audience. This audience, gamers, were heavily involved in a certain [streaming] platform; the execution idea was also perfectly suited to what we needed to convey — performance and components of
a product.”

After two hours, the live broadcast had gained 683,000 views, and garnered 8.26 million impression. It also boosted the brand’s official WeChat account, signing up 2,000 new followers.

“Live broadcasting also worked well for this niche audience — a group of people that highly anticipate new releases from Intel and other tech players,” adds Webb. “These people want to be the first to know the product inside and out. Being able to show the assembly of a product on the day of launch was a great opportunity that live broadcasting was able to facilitate.”

First to know: Intel launched its processor on Douyu.


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