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YY Live-A Typical Business Under Digital Market

What is the most profitable occupation in China?

Can you believe that a live streamer can earn an income over $1000 during a single broadcast? According to Statista, the top streamers in China are able to earn more than a million dollars in one year. Since 2014, the live streaming industry has been booming and the market size is expected to reach around $16.5 billion. The live streaming mainly focus on the male market. The following blog will introduce the well-known live streaming organisations–YY Live.

Source: China’s billion-dollar live streaming industry, available at https://www.youtube.com/watch?v=aVh4bN0ymoA&feature=youtu.be

The Business model

People are surprised about the rapid development of YY Live. The leading live streaming platform has launched in Nasdaq in 2013 at $11.32, and its share prices increased to top at $135.37 on May 24th, 2018, and then decreased to $54.71 on 28th Feb 2020. However, the rapid growing company has a relative simple revenue model. Around 95% of YY Live’s revenue comes from viewers’ “tipping”. The donation is usually shown as a form of virtual “gifts”, which made by viewers when they feel satisfied with streaming show. Usually, the YY Live can share around 40% of the all donations from the viewers.

Source: YY – GROWTH AT A CHEAP PRICE. Available at: https://snowballvalue.wordpress.com/2019/03/01/yy-growth-at-a-cheap-price/

This tipping policy helps to consolidate the relationship between viewers and streamers. On the one hand, hosts intend to improve the broadcast contents to win more tips and attract more audiences. On the other hand, viewers and streamers can communicate immediately during the streaming show, and this help foster para-social interaction between the two parties. The viewers who have already made donations are more likely to come back again and made the another donation, namely frequent customers.

Key business success factors

YY Live is one of the earliest and most successful live streaming platforms in China. YY Live ranks the top in terms of revenues from viewers’ tipping in 2018, more than double of the platform in the second place (Huya is subsidiary of YY Live). Hence, how can the YY Live stand out in the intensive competition among live streaming platforms?

Source:

Performance is the biggest section for almost every live streaming platforms, including the singing, dancing and chatting parts. YY Live features the music section. Firstly, YY Live promote the streaming singers to the mainstream social media and more audiences have the chance to know the singers. Secondly, YY Live also invite some musical celebrities to hold private concerts and musical talkshow. The celebrities already have considerable number of fans and some of they become new viewers of the platform. Further, the musical celebrities also help YY Live remove the label of vulgar music. In the music section, YY Live tries to systematically train the platform singers to become musical celebrities via online and offline integration. For example, Liu Yuning is a singers initially famous in live streaming platform and then come the public in TV show. He used to be the most profitable singers on the YY.

Gaming Section is the business expansion when the YY Music has been highly developed. With the function of voice communication and experience from foreign game live streaming platforms, the game business soon took off. Furthermore, YY Live is available both on apps and websites, which allows users move freely between PC and mobility with one account. Hence, the customer basis is enlarged and stabilised.

Online education is trend for future and YY Live regards it as the major driving factors for the future development. YY Live has seen the potential in the online education and plans to invest around 10 million RMB to develop the education department. YY Live has signed hundreds of teachers in order to meet future market demand. However, I think it is hard for YY Live transfer their existing customers to their education platforms becasue education and general entertainment segments target different viewers.

Spun off the game business and cooperation with Tencent

However, most game streaming platforms don’t get broadcast license from the game publishers. In this case, many game live streaming platforms were sued for infringement. In China, 9 out of 10 most popular game are published by the Tencent Game and co-operate with Tencent can perfectly solve the dilemma. In 2014, YY Live spun out of its game business alone as Huya and sold 34.6% of Huya’s share to Tencent at huge discount.

In addition to the benefit of license, Tencent can provide more resources to YY Live as Tencent is also the owner of the most influenced media-services platform, where most advertisement is display. With the help of Tencent Corporation, the YY Live can enjoy marketing benefits and promote the live streaming platform in the mainstream social media.

Expansion to the rest of world

YY Live is the leading live streaming platform in China and tries to expand to rest of world. Performance streaming attracts more tips than any other categories in China but performance streaming is not prevalent in foreign countries. In 2019, YY Live become the biggest shareholder of the BIGO by acquisition, which focus on the international live streaming market. BIGO Live TV share the similar functions with YY Live. Viewers can watch live shows, make video/voice call and so on. YY Live tries to introduce the rest of world the new way of entertainment. At present, BIGO Live TV is one of most successful live streaming platform in some Southeast Asia, Middle East,Russia and South American countries.

Reference

1. Tianyi Gu.(2019). An introduction to the streaming market in China and How it differs from the west.  Retrieved from:  https://resources.newzoo.com/hubfs/Reports/Introduction_to_the_Chinese_Streaming_Market.pdf?

2. Lauren Hallanan.(2018). Top 5 Chinese Live Streaming Platforms You Need to Know in 2018. Retrieved from:  https://medium.com/@laurenhallanan/top-5-chinese-live-streaming-platforms-you-need-to-know-in-2018-d963352124c7.

3. Cunningham, S., Craig, D., & Lv, J. (2019). China’s livestreaming industry: platforms, politics, and precarity. International Journal of Cultural Studies22(6), 719–736.

4. Y. Chen and F. Xiong.(2019). The Business Model of Live Streaming Entertainment Services in China and Associated Challenges for Key Stakeholders. In IEEE Access, vol. 7, pp. 116321-116327, 2019.

5. Daxue Consulting. (2019). Chinese Live Streaming Millionaires: Where does the wealth come from? Retrieved from:  https://daxueconsulting.com/chinese-live-streaming-millionaires/.

6. Statista. (2019). Leading live streaming platforms by revenues from users’ donations in China in 2018 (in million US dollars). Retrieved from: https://www.statista.com/statistics/1033292/china-user-donations-major-live-streaming-platforms/

7. Statista. (2019). Monthly income of the leading live streaming hosts in China in September 2019 (in million yuan). Retrieved from: https://www.statista.com/statistics/1081024/china-livestream-host-monthly-income/

8. Snowball Value. (2019). YY- growth at a cheap price. Retrieved from: https://snowballvalue.wordpress.com/2019/03/01/yy-growth-at-a-cheap-price/

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One thought on “YY Live-A Typical Business Under Digital Market

  1. Thanks for sharing about YY. Actually, I knew YY is very popular in China, but I had never used it before. At the same time, I do not know it can earn so much money, the data surprised me! I watched some videos and live streaming on Tik Tok. In China, we do not have the culture of tipping, so some platforms like YY changed and enhanced people’s awareness of paying for content. When people spending money on the Live they can watch for free also means they respect others’ achievement of working. If the streamers provide some useful information or make me laugh, I would like to pay to show my thanks and encourage them to continue creating. I also think the development of Live owe to the progress of digitization like 5G and mobile payment.

    Like

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