Across The Border
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China live streaming entrepreneur eyes Hong Kong hosts for global expansion

PUBLISHED : Tuesday, 28 March, 2017, 7:25pm
UPDATED : Tuesday, 28 March, 2017, 10:44pm

A Beijing-based entrepreneur wants to recruit 1,000 Hong Kong residents this year as hosts for its live-streaming video platform at a time when the city’s pay TV sector has hit hard times.

“I see great potential in Hong Kong to develop the live streaming business,” said Chinese American entrepreneur Andy Tian. “The city is definitely an excellent content provider for live streaming video thanks to its rich entertainment culture.”

“The city’s global influence on entertainment eclipses any region in Asia. That’s the main reason I chose Hong Kong as a major city to expand our business,” said Tian, co-founder and chief executive officer of Asia Innovations Group, a Beijing-based start-up focusing on developing mobile, social and

online entertainment products for global audiences. “But you cannot deny that the TV industry is now shrinking in the city.”

Opportunities for the live-streaming industry in Hong Kong have increased at a time when the TV industry outlook has become undeniably gloomy. Wharf (Holdings) said it would withdraw its financial backing for i-Cable, which reported a HK$313 million loss last year. Broadcaster TVB warned its full year 2016 earnings may shrink by as much as 65 per cent year on year.

Chinese authorities are on the right path to regulate the live-streaming industry
Chen Zhou, chief executive of YY Inc

Asia Innovations’ live streaming product UpLive, a smartphone-based application, has already attracted 300 hosts in Hong Kong since it launched in November 2016. And the best hosts – as video streamers are called – can earn up to HK$80,000 per month by live streaming for just one hour a day.

“The successful operation of a live-streaming business comes naturally from excellent content,” said Tian, who added that his goal is to hire 1,000 Hong Kong hosts who can help attract overseas users.

Tian acknowledged that the market in Hong Kong itself is not that big because the city only has a population of 7 million. Hong Kong users account for 5 per cent of UpLive’s total of 10 million users.

While live streaming hasn’t created much of a buzz in Hong Kong, the opposite is true on the Chinese mainland.

Brokerage firm China International Capital Corporation forecasts that the mainland streaming market will expand to 60 billion yuan (US$8.7 billion) by 2020. In 2015, China’s streaming industry was worth some 10 to 15 billion yuan, according to CICC estimates. China’s live broadcasting market grew to 344 million users by the end of last year, representing 47 per cent of the country’s internet population.

Its popularity has attracted 10 billion yuan in venture capital financing for the industry. However, the rapid growth caught the attention of central government officials who implemented censorship measures that apply to live streaming.

The Cyberspace Administration of China grouped a handful of earlier restrictions under a final 24-point regulation that came into effect on December 1. The rules require streaming services to log user data and content for 60 days, and work with regulators to provide information on users who stream content that the government deems a threat to national security or social order. Both users and providers are punishable under the regulations.

However, major mainland live-stream platform operators said their expansion plans aren’t being held back by the stricter rules.

China’s Yixia completes US$500m financing round amid boom in live streaming video

“The moves help weed out smaller players and the competitive landscape seems stable at the moment,” said Feng Yousheng, chief executive officer of China-based live-streaming app Inke. “I don’t expect more regulations to be introduced in 2017 for the live-streaming industry. How to fully implement the [already] introduced rules is the top priority.”

The restrictions have stabilised the competitive landscape and the “venture capital war” in live-streaming industry won’t be as fierce as that seen last year, said Feng. With a raft of new rules being announced in 2016 the regulation of China’s live-streaming industry has been standardised, he added.

“Chinese authorities are on the right path to regulate the live-streaming industry,” said Chen Zhou, chief executive of US listed live-streaming platform YY Inc. “The capital investment into the live-streaming sector has cooled down and venture capitalists are more picky and rational when thinking through an investment.”

YY reported its revenue rose 31 per cent to US$357.8 million in the fourth quarter of last year, beating market expectations of US$352 million. The company attributed the strong revenue growth primarily to the increase in number of paid users, which rose 92 per cent year over year to 5.2 million.

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