Why Is Live Streaming So Popular?

Preface

My day job is a software engineer. Although I don’t watch live streams very often myself, having worked in a related industry gave me a peek into how this ecosystem works. While the first draft was written around 2018, I believe the insights still hold true in 2020. Here are a few thoughts I’d like to share.

Why Is Live Streaming So Popular?

Many people only have a superficial understanding of the live streaming industry, often assuming it’s a profession for the less educated or hostess types. In reality, the live streaming industry has evolved into a unique ecosystem that looks very different from the chaos of its early days. Not only is regulation much stricter now, but the variety of content has also grown significantly.

What Makes Live Streaming Unique?

So why is live streaming so popular, and why do so many people send virtual gifts? The simplest reason is that streamers create “value.” Viewers get entertained while watching the stream, and when they feel happy, they send gifts and tip the streamer.

Another reason is authenticity and interactivity. In game streaming, it’s very common to see viewers donate—maybe because the streamer is funny, plays exceptionally well, or offers entertaining commentary. The format has simply shifted from game streaming to IRL/talent live streaming; the underlying essence hasn’t changed much.

Most live streaming apps don’t require payment just to watch (unless it’s adult-oriented content), and the chat feature is generally open to everyone.

In real life, having a pleasant, engaging interaction with a stranger for free is a rare luxury—nobody is going to smile at you on the street for no reason. For 9-to-5 office workers living monotonous routines, watching streams and interacting with streamers might be the most therapeutic part of their day. In fact, most people don’t even interact; they just listen quietly in the background.

Popular streamers can easily make over NT$100,000 a month. If a big spender backs them, pulling in NT$200,000 or NT$300,000 isn’t out of the question either.

However, the industry faces the same challenge as YouTube: when people see a booming market, everyone rushes in. Once the market saturates, an influx of low-effort newcomers tries to get a piece of the pie. With too many contenders and too few rewards, the casual observer ends up feeling that all streamers seem boring.

Smaller streamers don’t necessarily lack talent; they just can’t get discovered easily and eventually fade away quietly.

While the majority of streamers are female, male streamers face an even more competitive playing field. First, the viewer base is predominantly male; second, male creators face higher expectations in terms of talent, humor, or speaking skills to cut through the noise.

Unlike YouTube, the live streaming ecosystem tends to be more closed-off and tied directly to the app itself. For example, a top streamer on 17LIVE might lose half their followers if they move to another platform.

Monetization Models

1. Virtual Gifts

Most streamers make money by receiving virtual gifts and splitting the revenue with the platform. However, platforms usually take a hefty cut. Without a dedicated “sugar daddy” (whale patron), the income might only cover an extra lunchbox or two.

2. Signing Directly with the Platform

Signing a contract directly with the platform usually yields a better revenue share. Typically, it requires streaming a minimum number of hours per month and guarantees a base pay, with the rest earned through gifts.

3. Signing with an Agency

Signing directly with a platform often involves managing a lot of tedious administrative details. Handing this over to an agency can save a lot of headaches, though the agency will take a cut of your earnings. Finding a reputable, high-quality agency isn’t easy, either.

4. Waiting for a “Whale” to Arrive

A streamer’s income often follows the 80/20 rule: 80% of revenue comes from 20% of viewers—sometimes even shifting to a 90/10 split. Catching the eye of a whale requires luck, but it also takes consistent effort.

Once a whale shows up, streamers often end up focusing almost entirely on them. Logically speaking, it makes sense: With so many viewers in the room, it’s impossible to attend to everyone. You might miss people just trying to say hello, so naturally, the priority is keeping the big spender happy.

5. Offline Interactions with Fans

As streamers grow more popular, fans often crave deeper engagement. A common practice in the streaming circle is for the streamer to set up an exclusive group—say, a LINE group. Of course, you can’t just join for free; entry usually requires sending expensive gifts (like virtual sports cars, yachts, or airplanes). Streamers can build on this by offering perks like monthly fan meetups or private game sessions to boost retention and loyalty.

In a way, this functions like an unofficial version of YouTube Channel Memberships, currently left to the streamers’ own creativity to manage.

I’ll share more observations on the live streaming ecosystem in a separate post.

6. Mainstream Debut

Platforms like 17LIVE occasionally host talent competitions. Winners get opportunities like releasing an album for free or appearing on TV shows, giving ordinary amateur streamers a chance to step into the mainstream spotlight.

Challenges in Live Streaming

Hardware Limitations

Most streaming apps rely on mobile phones. However, front-facing phone cameras typically have lower resolution, resulting in subpar video quality—easily outmatched by any GoPro or standard camera used on YouTube. Dedicated streamers might invest in external microphones or basic audio interfaces, but many just stream straight from their bare phones, which creates a noticeable difference in production quality.

Latency and Bandwidth Costs

Because live streaming requires real-time video transmission, it demands high-performance, rock-solid servers and CDNs (Content Delivery Networks) to handle the massive traffic. This translates into massive CDN bills; building the entire infrastructure from scratch would be even more astronomically expensive.

Latency is an inherent challenge. If the delay is too long, it degrades the interaction between streamer and viewer. If the system is unstable and lags, users quickly leave.

As a result, unless a startup secures substantial funding, it can rarely sustain this kind of operational burn rate—let alone an indie developer. Furthermore, beyond hardware and infrastructure, basic features like gifting systems, beauty filters, live comments, leveling systems, and floating hearts are all non-negotiable essentials, making the initial cost of launching a live streaming platform remarkably high.

Platform Hijacking by Whales

As mentioned earlier, this ecosystem is frequently co-opted by big spenders, leading streamers to interact almost exclusively with them. When a platform’s revenue also heavily depends on these whales, they wield immense influence and can end up dictating the platform’s direction. This is far less common in game streaming.

Afterword

The observations above mainly apply to dedicated live streaming entertainment platforms. Mainstream platforms like YouTube and Twitch operate on a more donation- and content-driven dynamic, which falls outside the scope of this article.