SHANGHAI :
Growth Gap in China's Live-Streaming Sector Hits Firms Without Social Media Backing Most
He Tianjiao
DATE:  Jul 31 2017
/ SOURCE:  Yicai
Growth Gap in China's Live-Streaming Sector Hits Firms Without Social Media Backing Most Growth Gap in China's Live-Streaming Sector Hits Firms Without Social Media Backing Most

(Yicai Global) July 31 -- Many live-streaming platforms have run into trouble since the turn of the year, and many have filed for bankruptcy. 

Others, however, have posted strong earnings growth. 

Online video broadcasters who are not backed by social or media platforms will take the worst hit, a market insider told Yicai Global, adding that outperforming live-streaming businesses are typically those supported by social media network organizations. 

"Live-streaming companies must take good care of [either of] two businesses. One is social networking, and Yy.com and Immomo.com are widely noted as leading social networking platforms. The other business is media -- live-streaming is also a media service," Xu Weifeng, co-president at iQiyi, told Yicai Global. "Qixiu, a live-streaming site iQiyi operates, is a typical example of the latter. Live-streaming firms will not run into any serious troubles as long as they're affiliated to either business. Otherwise, their live-streaming operations will be unsustainable due to high user acquisition costs."   

Live-streaming platforms that have been performing relatively well can be generally divided into two categories, said Zhang Juyuan, chief operations officer at Panda.tv. The first group is represented by Inke.cn, Huajiao.com and Immomo.com, all of which are social networking services featuring good-looking hostesses. The other category is comprised of online broadcasters of high-quality 'pan-entertainment' content like Panda.tv. 

Most outperforming platforms greatly emphasize social networking and media content creation, the market insider noted. In fact, apart from leading social networking sites such as Yy.com and Immomo.tv, all other live-streaming platforms lack distinct social properties. Instead, they position themselves as media content publishers. 

"Creating high-quality content is very important for live-streaming platforms," Zhang told Yicai Global. "The competition used to focus on popular hostesses, but now the companies have shifted their resources and attention to creating professionally-generated content with the support of technical teams, prompting them to attract and train fully qualified professionals, as well as innovating their business philosophies and business models. Furthermore, high-quality content allows them to integrate various upstream and downstream resources such as investment, content production, sponsors and distributors into the live-streaming ecosystem."

YY Inc., owner of two popular live-streaming sites -- Yy.com and Huya.com, logged CNY2.27 billion in operating income in the first quarter, up 37 percent over the same period of last year, per the company's recently-released quarterly financial statement. Its net profit attributable to shareholders rose 161 percent to CNY540 million. 

Momo Inc. [NASDAQ:MOMO], owner of Immomo.com, reported that its net operating income grew 524 percent to USD246.1 million in last year's fourth quarter. Specifically, revenues generated by live-streaming services rose to USD195 million, driven by an increase of 3.5 million in the number of the company's paying live-stream users.

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Keywords:   Webcast,Social Media,Financial Performance,Content