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Live-streaming platforms at risk as regulators tighten rules

Authorities’ restrictions could lead to consolidation in the industry, removing inferior operators, analysts say

PUBLISHED : Thursday, 15 December, 2016, 3:24pm
UPDATED : Thursday, 15 December, 2016, 10:09pm

More live streaming platforms could be forced to shut down as mainland authorities tighten control of the industry and frequently impose stricter rules, according to industry watchers.

“A succession of stricter rules and regulations certainly will strip some inferior operators off the market,” Zhong Tai Securities analyst Wang Xian said. “It will also add further concentration to the industry.”

Beijing tightens its grip on live streaming industry

The Ministry of Culture on Tuesday ordered that all online live-performance operators apply for a permit from the relevant provincial cultural affairs authority, with performers to register their real names and identity documents, with effect from January 1.

The new order follows a requirement issued last month by the Cyberspace Administration of China (CAC), which took effect on December 1, requiring content providers to obtain qualifications and set rules on monitoring user data.

CAC last week told Xinhua that more than 4,500 accounts on Beijing-based websites had shut down more than 3,100 live-streaming programmes when the rules against violent and obscene content came into effect at the beginning of this month.

Wang said: “For some rules in the document such as registering streamers’ real names and identity documents, industry participaters have already some expectations, and these rules will not deal a serious blow to the industry.

“But some details expect to come out later following the general introduction. The new-comers or small platforms will have more challenges, because strict tightening and detailed rules will lift the entrance level.”

Their contents or operations may not be in line with the rules, that is the major risk for their closure
China Merchants Securities internet and software analyst Richard Ko

China Merchants Securities internet and software analyst Richard Ko said the small platforms were usually more vulnerable to the stricter rules than big ones and they would bear the brunt of tighter regulations.

“I do not think the new rules will post great cost pressure for small players but their contents or operations may not be in line with the rules, that is the major risk for their closure, ” Ko said. In such a new industry regulations were always delayed, and it was no surprise to see rules emerging, he said.

The constant regulatory tightening has come as the blooming industry has been hit by serious scandals.

With a smartphone or computer, everyone can make money from showing their daily life, from eating to singing, or putting on makeup to playing mobile games, even just chatting or quarrelling.

For popular live-streamers, there are sometimes over 100,000 viewers for each show. Their fans will give them digital gifts like sunflowers worth 10 fen (HK$0.11) each, or a virtual Lamborghini that costs 100 yuan.

He Dongliang, a 27-year-old coach in Zhejiang who can earn 2,000 yuan a month from interaction with audiences on YingKe, one of China’s most popular live streaming platforms said: “ I can totally understand why there should be tightening rules, sometimes the contents cannot bearable for me.

“In leisure time, I play with my cat, and now I can make money from broadcasting it,” He said. “The money is easy to make. 2,000 is not that much but enough for me to pay my house renting every month.”

The Ministry of Education last year said fresh university graduates earned an average 3,773 yuan a month.

He said: “It is a little ridiculous when you notice some top streamers can make 10 times more than fresh graduates in China.

“I do believe the new rules will make streamers to have higher pressures but the easy money making will continue to attract more and more people to the industry especially to these youngsters who have no college degree and difficult to find a decent job.”

Ko said the industry was promising despite tighter rules, which in long run could benefit the whole industry.

Internet giants have joined the crowed market. The biggest e-commerce player Alibaba, owner of South China Morning Post, and its rival JD.com and as well as Baidu all have live-streaming platforms. In the world biggest shopping event, double 11, Alibaba live-streamed an eight-hour fashion show in Shanghai with 50 international brands.

China International Capital Corp figures indicate the Chinese live streaming market reached 15 billion yuan last year.

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