Live mobile video streaming is in full swing in China, with Chinese video streaming apps achieving monetization with a proven business model.
PC-based live video streaming, which has been popular in China since the second half of the 2000s, offers a variety of real-time broadcaster-to-viewer interaction features, including virtual gift giving. There are a handful of live-streaming websites that are highly profitable, primarily through virtual gift sales.
Though all users own a small number of free virtual gifts when they register or can earn points through online activities, they have to spend real money to reward a broadcaster with more gifts. Platforms and content contributors share the revenue from gift sales. Some big platforms allow for the establishment of channels and share a portion of revenue with them.
The expansion to mobile is a no-brainer for established platforms such as YY Inc., as Chinese users consume an increasing amount of content through mobile channels. For example, YY started from a desktop platform with amateur singing streaming and now accommodates a wide range of broadcasters, from teachers and stock analysts to game players.
YY’s two major categories, amateur singing and gameplay broadcasting, saw a larger portion of both users and revenues from mobile than PC in the second quarter of this year, according to Seeking Alpha. Well-established mobile payment infrastructure and increasing adoption of mobile payment in China surely helped boost virtual gift sales.
The virtual gift-based mobile video streaming business has attracted a wave of startups and established Chinese internet services, which tend to add every popular service to their core products for fear of missing the next big thing.
The service is now available on many types of Chinese mobile apps, including on-demand video streaming, music streaming, social networking, photo sharing, news and e-commerce apps. In addition, many have seen immediate success in both popularity and revenue generation.
However, it has recently been found that the virtual gift-based model doesn’t fit in all content categories. Some have started to explore monetization opportunities in advertising and e-commerce.
Taobao, China’s largest online retail marketplace of e-commerce giant Alibaba, recently launched a live-streaming app that lets users purchase physical goods during streaming sessions. Some retailers and manufacturers have started training their own broadcasters to promote or even sell goods on Taobao’s platform or other apps.
Social app finds a gold mine in live streaming
Momo, the location-based social networking app that is especially popular among young Chinese users, launched a video streaming feature in late 2015. In the first quarter of 2016, virtual gift sales through the new feature surpassed premium subscription and mobile marketing to become the company’s largest source of revenue.
In the following quarter, Momo’s virtual gift revenue tripled, with 1.3 million paying users contributing $57.9 million in virtual gift revenue. The average revenue per paying user (ARPU) was about $45, which is much higher than the ARPU of many mobile games in China.
The company plans to roll out more virtual gift choices and video effect options later on. Momo management said during a recent earnings conference call that it believed it’s only “the beginning of a golden age where live video converges with social activities.”
China’s Twitter gets a boost with the addition of mobile video streaming
The live video streaming feature added earlier this year onto Weibo — the leading Twitter-like service in China — also found immediate popularity. Weibo saw 89 percent of its monthly active users accessed its service through mobile in the second quarter of this year.
Instead of developing the service in-house, Weibo’s live streaming feature was developed by a third-party mobile video app developer in which Weibo’s parent company, Sina, is an investor. This developer also built the official video-clip-sharing app and lip-sync app for Weibo, both of which are highly popular on the platform and on the Chinese web in general.
Weibo once again successfully leveraged its celebrity recourse to promote a new service. So far, the live stream views have been driven by celebrity users or other accounts with a large following. Weibo management said it also wanted a piece of the amateur broadcasting market where YY and a couple of other companies are dominating.
Weibo’s service allows for virtual gift-giving and purchasing, too. According to Seeking Alpha, the company said it would also explore monetization opportunities through e-commerce — Alibaba is one of the biggest advertisers and a shareholder in Weibo.
Dozens of mobile video streaming startups have emerged in China over the past few years. A few launched earlier this year are also gaining traction. A round of consolidation is expected to take place in the near future. The race for funding has begun, with one leading player, Douyu, announcing recently $227 million in Series C funding led by Tencent, the largest internet company in China.
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September 27, 2016 at 02:03AM