By Siyi Chen
When my dad, a small businessman from Southeast China, asked me, his social media-savvy daughter, how to utilize the internet to help sell his agricultural products, the first thing that came to mind was live streaming.
“It’s kind of like the TV shopping channels you watch,” I tried to explain to him, “Except you access it on your phone. For example, on Taobao (China’s biggest online shopping website), you’ll find a section dedicated to live streams. There you’ll see tons of videos in which hosts display products or try them in real-time. As they display, a link to that particular product will pop up on your screen.”
An example of Taobao live streams:
“I still don’t get how it’s different from TV shopping,” my dad said, looking unconvinced. I continued: “Well, you can engage with the host in real-time and make a request or comment like, ‘I want to see if that earring matches that dress,’ or ‘I’m 5’3 and weigh 105 pounds, would I look good in that skirt?’”
One thing that ultimately convinced my dad, or rather, shocked him, was the fact that the number one live streamer on Taobao, Viya, made over $4.2 million dollars in 2017. She’s only 32. As a matter of fact, none of the top 10 live streamers on Taobao is over 32 and they made an average of close to $2 million dollars per person in 2017, according to a ranking released by the website. These Taobao live streamers are kind of like Instagram influencers. They help businesses promote and sell products and get paid in commissions.
Viya, the so-called Taobao blogger who “earn a house in one night”, broke her own record in this year’s Tmall Double 11 with over US$43.47M in sales. Her followers will buy whatever she recommends without even reading the product. https://t.co/vxRtefsuDn pic.twitter.com/ap4q93Apxx
— China Internet Watch (@ChinaInternet) December 20, 2018
The marriage between live streaming and e-commerce is the newest development of China’s ongoing live streaming craze. As a young industry in China, live streaming sprouted in the early 2000s, exploded in 2015 and 2016, got heavily regulated in the following two years, and is now taking on new shapes and even making its way to countries outside China.
The live streaming industry offers us a great lens through which we can understand modern China: an emerging tech giant desperate to cash in on the future of the internet; a country with a nationwide thirst for material success but also a deepening class divide.
The Rise of Live Streams in China
It started with gaming. Think Twitch in the US, the live streaming platform mostly focused around video gaming. Some gamers enjoy watching others play. They also want to talk with the player or discuss the player’s performance with other viewers.
Then, people started talking about something other than games. Platforms like YY, featured in People’s Republic of Desire, started to have live streamers chat with viewers, or sing.
One of the earliest successful live streamers, MC Tianyou (later named Li Tianyou), revealed on a TV show in 2017, that he makes $11 million dollars a year. Before Tianyou started live streaming, he was a street vendor.
What does he do on his show? Mostly chatting. Sometimes he raps, about life, love, men and women, in very down-to-earth lyrics. More on Tianyou in this segment below:
You may wonder how anyone can make money from live streams. A simplified explanation is that live streamers make money from “tips.” Viewers buy virtual gifts with real money and “tip” live streamers with these gifts. Live streamers then redeem the gifts for money.
Sometimes tipping or gifting becomes a competition to flaunt wealth, to fight for attention and induce envy from other viewers. Some big patrons tip in thousands or hundreds of thousands. Such competition helps live streamers get more money. (People’s Republic of Desire does a nice job explaining the whole economy and ecosystem behind all this.)
But before it became a game of flaunting wealth, live streaming started as something very grassroots.
A popular kind of live streamers are hosts like Tianyou or Big Li, one of the main characters in People’s Republic of Desire. They don’t look like big-shot celebrities. They dress like common folks, talk like your neighbors and call themselves “Diaosi,” a self-deprecating term that basically means “loser.” These live streamers are essentially a mirror image of their viewers, a big percentage of which are working class.
The difference between the two is that the live streamers have “made it”: they reached a level of material success that’s unimaginable to the real working class. But the important thing for the viewers is that they are or at least used to be part of the working class.
The very beginning of the live streaming craze almost felt like a party for the working class. Except it’s just a fantasy that’s sold to the viewers, to make them believe that they brought one of them up the social ladder, against all odds, with their collective power.
This is probably the ultimate reason why factory workers spend a big portion or even all of their salary on tipping their favorite live streamer. Their goal? To help the live streamer win the “most popular host or hostess” competition, as featured in the film. They want to win in the virtual world because they hardly can in real life.
In 2015 and 2016, live streaming exploded in China. At its height, there were more than 700 live streaming platforms. Some live streamers made more than A-list TV or movie stars. A Deloitte Consulting report estimated the Chinese live streaming market would reach $4.4 billion in 2018.
To become popular, live streamers rely heavily on rich patrons who can tip more than just a few dollars here and there. Smart investors even found a business model. They “tip” in big amounts to help a little-known live streamer become popular. Once that live streamer gets popular and receives more tips, the investors cash in.
Diaosi ultimately become an observer in this game of capital. They’re being used to fulfill the business model, yet with zero benefits in the process, and end up losing money. People’s Republic of Desire captures this cruel and crucial truth about the live streaming industry by beautifully portraying not only the live streamers but also the viewers, the anonymous faces behind this craze.
The Future of Live Streaming in China and Beyond
Starting in 2017, the Chinese government strengthened regulations on live streaming, mostly because they wanted to control what’s being said or shown. New policies were released. Platforms that violated the policies were shut down. As a result, at the end of 2017, the number of live streaming platforms went down from 700 to around 200, according to a Chinese live streaming industry report from a Beijing think tank that researches the online entertainment industry in China.
Live streamers who violated rules were also shunned. Tianyou appeared on a Chinese TV program in early 2018, confessing that he mentioned drugs on his show. Soon after, Tianyou disappeared from the limelight.
However, that doesn’t mean live streaming has seen its days in China. It’s just becoming a more regulated industry instead of a wild market. The capital also centralized: China’s tech giant, Tencent, purchased or bought shares in a lot of major live streaming platforms, paving the way towards industry monopoly. Live streaming companies are also exploring new business models. Marrying live streaming to e-commerce is one of the new experiments. Some companies are organizing more offline events, managing live streamers as a talent agency.
Interestingly, the industry is also making its way to countries outside China.
Two years ago when I was working for a website called Quartz, on a video about live streaming [see below], I came across LiveMe, a Chinese live streaming company developed in Beijing but targeting markets outside China. According to a more recent Quartz video, LiveMe made $100 million dollars in revenue in its first year, mostly from US viewers watching US live streamers, though they’re present in countries other than the US, like Russia.
Even though no other place has been as passionate about live streaming as China, its rise tells us a bigger story about the time we live in, one I believe everyone can find something they relate to. Maybe it’s the anxiety over your identity, about your place in the society, what it means to be successful and how to get there; or simply the longing to be connected to someone–even if they’re complete strangers.
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Siyi Chen is a documentary filmmaker and freelance journalist. Born and raised in Zhejiang, China, educated in New York City, Siyi currently splits her time between both places. She worked for the video team at Quartz (qz.com) for two years after graduating from NYU with an MA in News and Documentary. Her documentary projects are supported by IDFA Bertha Fund, Chicken and Egg Pictures, and SFFILM. When she’s not making documentaries, Siyi writes in both English and Chinese about tech, media and documentaries in a cross-cultural context. Her writings have appeared on Quartz, Financial Times Chinese, and Tencent.