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This post is translated by ChatGPT and originally written in Mandarin, so there may be some inaccuracies or mistakes.
Introduction
I am primarily a software engineer. Although I don't often watch live streams, my previous work in a related industry has given me some insight into the ecosystem surrounding it. While the first draft was written around 2018, I believe it remains relevant in 2020. Here, I'd like to share my thoughts.
What Makes Live Streaming Popular?
Many people have a limited understanding of the live streaming industry, often perceiving it as a profession mostly for those with lower educational backgrounds or for presenters. In reality, the live streaming industry has evolved into a unique ecosystem, significantly different from the chaotic beginnings. Not only have regulations become stricter, but the variety of live streaming formats has also expanded tremendously.
Characteristics of Live Streaming
So why is live streaming so popular, and why do so many people send gifts? The simplest reason is that streamers create "value." Viewers gain entertainment from the streams, and as they enjoy themselves, they send gifts and tip the streamers.
Another reason is authenticity and interactivity. In gaming streams, it's common to see viewers donate, perhaps because the streamer is entertaining, plays well, or provides humorous commentary. The format may have shifted from gaming streams to live streaming, but the essence remains largely unchanged.
Many live streaming apps do not require payment to watch (except for adult content), and most chat functions are open to everyone.
In real life, being able to interact joyfully and freely with a stranger is quite a rarity; who would smile at you on the street for no reason? For those stuck in monotonous nine-to-five jobs, watching live streams and interacting with streamers may be the most therapeutic part of their day. In fact, most people may not even interact, simply listening quietly.
Popular streamers can easily earn over 200,000 or $300,000 isn’t too far-fetched.
However, they face challenges similar to those on YouTube: when the market becomes hot, many rush in to compete, and once it saturates, more and more amateurs try to grab a piece of the pie. In a situation where there are too many streamers and not enough audience, many viewers may find the streamers uninteresting.
These smaller streamers are not lacking in talent; they simply can't be easily noticed and ultimately fade away.
While most streamers are female, males face tougher competition. This is partly due to the male-dominated audience and the higher standards for talent or presentation skills needed to stand out.
Unlike YouTube, the live streaming ecosystem tends to be more closed-off, often tied to specific apps. For example, a popular streamer on 17 Live may lose half their fanbase when switching to other platforms.
Revenue Models
1. Receiving Gifts
Most streamers earn money through receiving gifts and sharing profits with the platform. However, this method often comes with high commissions for the platform, and without a wealthy benefactor, their income might only cover a meal.
2. Signing Contracts with Platforms
By signing contracts with platforms, streamers can receive better commission rates. Generally, they are required to stream a certain number of hours each month, ensuring a base income, and then rely on gifts for additional earnings.
3. Signing with Management Companies
Directly signing contracts with platforms often involves handling various details. Entrusting this to a management company can save a lot of trouble, but they will take a cut of the profits, and finding a quality management company can be challenging.
4. Waiting for Benefactors
Streamer income often follows an 80:20 trend, meaning 80% of the income comes from 20% of the viewers, and it could even be as skewed as 90:10. Encountering a benefactor requires luck, but it also demands continuous effort.
Sometimes, once a benefactor appears, streamers may only interact with them, which makes sense considering it’s impossible to cater to all viewers in a crowded chat; simply greeting everyone might lead to missing some, so naturally, making the benefactor happy becomes a priority.
5. Offline Interaction with Viewers
As a streamer gains popularity, viewers often seek more in-depth interactions. A unique phenomenon in the live streaming world is that streamers may create a group, like a LINE group. However, joining isn’t easy; usually, it requires sending high-value gifts (like sports cars, yachts, or planes) as a condition for entry. Streamers can also use this method to provide more engagement opportunities, such as monthly fan meet-ups or gaming sessions to strengthen their connection.
I find this somewhat akin to an unofficial YouTube membership feature, primarily driven by the streamers themselves.
I will share my observations about the live streaming ecosystem in another article.
6. Debuting
Platforms like 17 Live sometimes hold talent selection events. If you win, you can get a chance to release a record or appear on shows, giving previously unknown streamers an opportunity to be seen.
Challenges in Live Streaming
Hardware Limitations
Most live streaming is done via mobile phones, but the front cameras usually have lower pixel quality, resulting in subpar streaming quality compared to even a basic GoPro or regular camera on YouTube. Some dedicated streamers invest in microphones or basic audio interfaces, while many stream without any enhancements, leading to significant differences in quality.
Network Latency and Data Transmission
Live streaming requires real-time video transmission, necessitating efficient and stable servers and CDN (Content Delivery Network) to handle high traffic. This translates to substantial costs for CDN services, and setting up everything independently would incur even higher expenses.
Streaming faces the challenge of latency; if the delay is too long, it can negatively impact the experience for both streamers and viewers. If the system is unstable and causes buffering, users may easily drop off.
Therefore, startups, unless they secure substantial funding, typically struggle to manage this kind of leverage, not to mention independent developers. Additionally, live streaming apps require not only hardware and infrastructure but also essential features like gift systems, filters, comments, levels, and hearts, increasing the initial costs of launching a live streaming platform.
Dominance of Big Players
As mentioned earlier, the live streaming ecosystem is often dominated by major players, leading to situations where streamers primarily interact with these big spenders. When a platform's revenue relies heavily on these big players, they tend to have more influence, ultimately shaping the platform’s direction—a scenario less common in gaming streams.
Conclusion
The descriptions above primarily focus on general live streaming platforms. In contrast, platforms like YouTube and Twitch, which lean more towards donation-driven models, are not applicable to the discussion in this article.
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