Live-Streaming Apps Flourish in China - ARGE.TV
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Live-Streaming Apps Flourish in China

Live-Streaming Apps Flourish in China

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A young woman with bleached, short hair eats a plate of fried rice, swings her hips and sings along with music. A young man in a red, flowery shirt, painted red lips and a pair of pearl earrings screams through a megaphone—about basically nothing. A girl complains about how a man pretended to be her friend, then stole 100,000 yuan ($15,000) and a Vertu luxury phone from her. She shows photos of the bank transaction and the phone.

Welcome to China's flourishing, new reality-show industry, where regular people use smartphones to live stream whatever suits their whims. User-generated video streams like the ones above helped drive Ingkee, a one-year-old live-streaming mobile app, to the No. 1 spot on Apple's China app store multiple times in the past few months.

As in many parts of the technology world, while China didn't invent live-video streaming, it has played catch-up with a vengeance. Ingkee is one of dozens of live streaming apps that started in the past year or so to emulate Meerkat and Twitter's Periscope. The Chinese companies are tapping into a growing mobile-video market that's hungry for sexy, edgy content reflecting young people's tastes and lifestyle.

Images from Ingkee, a live-streaming mobile app that the Chinese company says has been downloaded by more than 50 million users.ENLARGE
Images from Ingkee, a live-streaming mobile app that the Chinese company says has been downloaded by more than 50 million users. PHOTO: INGKEE

But being in the online content business in China means they also have to balance edginess with the government's strict content restrictions—something that can be challenging with live video, given its inherent spontaneity. Already, regulators have accused some streaming services of distributing pornography, and sites are trying to rein in what users post.

Ingkee says over 50 million users have downloaded its app and activated accounts, but declines to share the exact number of users who stream. Douyu, which is operated by Wuhan Douyu Internet Technology and counts Tencent Holdings and Sequoia Capital China as main investors, is the biggest competitor in the crowded field, claiming 600,000 users who have streamed at least once and 120 million active monthly users. Douyu started as a live video website for gamers in 2014 but moved to add lifestyle-type live streaming and focused more on mobile last year.

As in the U.S., better smartphones, faster connectivity and a willingness among many young people to share personal lives online are helping drive the live-video craze. Anyone can sign up for the Chinese services and start live-streaming whatever they're doing from anywhere. Viewers can interact with streamers via pop-up texts.

But many Chinese live-streaming apps have integrated a feature that motivates people to stream more and generate profit for the apps. If viewers like what they see, they can tip the streamers with virtual presents they buy from the apps. The streamers can trade the token value of the presents for cash.

On Ingkee, one yuan buys 10 tokens, which users can in turn employ to purchase virtual presents such as a bunch of cherry flowers (one token), a hug (five tokens) or a yacht (13,140 tokens). Streamers and Ingkee split the income from token sales. Ingkee declines to say how, though one streamer says the company gets 70%.

Gu Huimin, a 22-year-old college senior from Shenzhen, says she has made about 20,000 yuan a month on Ingkee in the past few months. She streams two to three hours a day, mostly chatting, singing and flirting—and cajoling regulars into giving big tips, such as a fleet of virtual Ferraris (3,000 tokens each). Ms. Gu says she likes live streaming partly because it gets her noticed: She's been approached for acting roles in TV series and commercials.

Douyu says it splits token income with streamers 50/50. Both companies say the majority of their streamers are doing it for fun, not for money.

Cao Xi, the Sequoia Capital China venture capitalist who invested in Douyu in 2014, says part of the success of China's live-streaming apps is that some streams border on soft porn in a society where such content is tightly controlled. "Americans don't need Periscope to watch pretty young women," he says. "In a country where porn isn't available, this market is pretty good."

Earlier this year, some of the most explosive content on these apps included a couple having sex on camera and a few women going topless. Those streams were deleted quickly, but they attracted the attention of regulators that already were tightening the state's hold on the media in line with the Communist Party's calls for more "positive" and "moral" content.

In the past few months, the Ministry of Culture, the national anti-pornography office and other regulators have carried out crackdowns on over 50 live-streaming sites for "pornographic, low-taste and other inappropriate information," according to state media reports. Almost all bigger Chinese streaming apps were named or fined, including Ingkee and Douyu.

Founders of several apps say they understand this is a serious matter because they could lose their business and Internet-operation licenses if they are penalized again for another violation. As a result, they are implementing strict content rules. Some, including Douyu, made rules as specific as one that bans the suggestive use of bananas. Douyu employs 300 people to run its business and an additional 300 to monitor content, sending warnings and shutting down accounts that violate rules. Ingkee has hired 500 people to monitor streaming sessions on its platform, compared with 150 for operating its business.

While trying to comply with China's rules, streaming apps also need to try to make their permissible content less boring. Viewers will likely only keep coming back so often to see typical live-stream content, such as people eating dinner. "Even watching pretty women doing mundane stuff can get tiring quickly," says Weng Jingyu, a 26-year-old graduate student in the western city of Xian, who regularly watches Douyu.

 

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