Reports > Domestic and Overseas Live Streaming Industry Report
Domestic and Overseas Live Streaming Industry Report
2016 - 09 - 12

Foreword


This year, for the first time, the entire mobile Internet market is moving in a single direction—live streaming. There’re more than 200 live streaming startups in China luring investment capital from all over the world. The live streaming market has become a battle ground where app developers, both big and small, are competing head-on in one of the most fiercely competitive markets we’ve ever seen.


What will be left after the dust settles on this great struggle? Based on the huge amount of data gained from Cheetah Mobile’s data analysis products such as “appinsight”, and our own unique perspective within the Internet industry, the following is a detailed picture of the current state of the live streaming industry and our predictions for the future.


(Note: This report only applies to Android terminals. Cheetah Global Labs will cover sports apps with live streaming capabilities in our upcoming “2016 Global Sports App Report”. Therefore, they are not be included in the current study)


PART I- China Market: Battle Royal


I. State of the Market: Live Streaming App Momentum Reaches Fever Pitch


According to incomplete statistics,there are 20 apps with live streaming features in China's Top 150 apps.



(Notes: 1 The overall rankings do not include Cheetah Mobile apps; 2.data is current as of August 8th, 2016.)


There are no purely live streaming apps in the Top 150. Each app listed above with embedded live streaming features is already a well-known app. They can be divided into several categories:


1.News


Whether they are traditional news apps, or personalized news recommendation platforms, they have all added live streaming features. However, the traditional news apps have done it with greater proficiency and professionalism. For example, TouTiao.com, China’s most popular news recommendation platform, has embedded its Huoshan live streaming service within its app, which primarily features live streams of attractive women, while Kuaibao has launched its own live streaming channel which focuses on news and events streaming.


2.Video


Live streaming is a logical fit for video apps.


3.E-commerce


In addition to Taobao and Tmall, popular e-commerce platforms Mogujie and Jumei have also added live streaming sales teams.


4.Social Media


As social media platforms, QQ Zone, Momo and Meipai are all competing directly in the live streaming space. Live streaming is already contributing a significant amount to Momo’s profit, according to its second quarter 2016 financial results.


Inke, which previously appeared on Cheetah Global Lab’s February Rising App Rankings, is poised to enter China’s Top 150 app rankings just over eight months later.



Ranking data: weekly active user (WAU) data, current as August 8th, 2016; Android terminals; financing information taken from publicly available channels). List does not include other types of apps with live streaming features, sports apps or live television broadcast apps.


Of the purely live streaming apps, YY, Huya, ME and BIGO LIVE are all published by YY Inc. (1st, 3rd, 24th and 39th, respectively). According to Baidu Baike, YY Inc. is China’s largest online voice chatting platform provider. Based on Cheetah Global Lab’s 2016 Global App Development Report (data current as of January 2016), YY Inc. is the 12th ranked app publisher in the world. Compared to YY Inc., it’s worth noting that half of the Chinese companies on the list are overseas utility app providers, which is a relatively easy market to break into.


BIGO LIVE is targeted at overseas markets. It has already established a foothold in Thailand.


II. A Bewildering Variety of Live Streaming Apps


Currently, there are several types of live streaming apps:


1. Entertainment



Includes: YY, Inke, Hujiao, Mi Live, etc.


In terms of content, entertainment apps can be divided into two major types:


Type 1: “Let you see.Selfie-style apps, primarily consisting of attractive female or male performers or hosts giving individual performances.


Live streaming content primarily consists of people performing or doing activities, including singing, dancing, putting on makeup, going to the bar, and even attending job interviews. The hosts simply open the app, look into the camera and interact with their fans. Most of the broadcasts lack a cohesive theme, often consisting of idle chatter into the camera.


Type 2: “Take you to see”.Filming-style apps, primarily consisting of concerts, sports and other types of events and performances. In addition to traditional events, broadcasts includes such varied content as Chinese businessman and philanthropist Wang Jianlin playing popular card game “Fight the Landlord” on Panda TV, the launch event for Xiaomi’s new drone product, and celebrities offering behind-the-scenes access into their lives and events.



From the above trends we can see that YY is in a slow state of decline. On the one hand, this is due to a proliferation of new live streaming apps challenging YY’s dominance. On the other hand, YY has consistently maintained its “let you see” model, without making any major changes to its business model. This indicates that users are likely growing fatigued with the randomness of the performances on YY.


At present, each live streaming app is busy finding its niche. It’s too early to tell whether “let you see” and “take you to see” content will ultimately be unified on a single platform, or whether they will be split into separate vertical live streaming apps.


2. Live Streaming + E-sports/Game Broadcasting



Includes: Huya, Douyu TV, Panda TV, etc.


These platforms, which originally started e-sports and game broadcasting apps, have been gradually adding new elements as their user numbers increase. Currently, many of active hosts on these platforms are online game hosts, and most of the live streaming content consists of them playing computer games in real time or commentating live overseas gaming tournaments. Because of this, most of the users on these platforms are gamers. There are also a number of female hosts on these platforms who have become popular for their gaming skills.



Based on the development trends of Huya, Douyu TV and Panda TV, we can see that Huya is steadily growing, while Douyu TV and Panda TV have stagnated somewhat. These three platforms have all added “let you see” live online performance features. E-sports are still not very big in China, so these types of live streaming platforms seem to be shifting their focus towards entertainment and live performances. Whether they try to maintain their identity as vertical platforms or jump headfirst into the entertainment market remains to be seen.


3. The Fusion of Live Streaming and Vertical Sectors


The fusion of live streaming with all types of verticals is a major live streaming trend with a lot of potential.


Live Streaming + Sports


The integration of live streaming and sports is a natural fit. Currently, all of the mainstream sports apps are live streaming sporting events. Whether or not entertainment-oriented live streaming content can be successfully integrated into sports apps will be the true test for live streaming + sports apps. For example, some sports apps that have integrated beautiful female hosts into their live stream offerings, with such imaginative ideas as “Beautiful women watch sports with you” and “Listen to beautiful women discuss the game”.



Screenshots of live streaming apps


Live Streaming + E-commerce


According to Cheetah Global Lab’s incomplete statistics, Taobao, Tmall, VIP.com, Mogujie, Jumei and Suning.com have all launched live streaming features on their own apps or third-party platforms, such as live streams of salespeople showcasing products or buyers making purchases.


The salespeople on live streaming platforms are similar to TV salespeople. The only difference is, they are being broadcast through the mobile Internet rather than TV. Merchants and consumers interact directly, as the salespeople attempt to convince consumers to place orders. This type of sales tactic has been proven to be very effective.



Screenshots of live streaming apps


For example, when Chinese actress Ada Liu was featured as a real-time salesperson on Chinese e-commerce platform Juhuasuan, more than 110,000 people tuned in. She sold numerous items during her broadcast, including 24,000 walnut-stuffed dates.


Buyers live streaming more often appears on cross-border shopping platforms. To prove the authenticity of the products, buyers will often live stream the entire process of going to overseas malls to purchase products.


Live Streaming + Education/Training


The online education market has been developing for many years. Although there has been little innovation within the industry, many online education platforms have recently added live streaming features to attract users.


Blbx, currently ranked 37th, fits into this category. But specialists explaining stock investment is very common on live streaming platforms. In addition to 9666.cn’s strong focus on stock investment, many specialists discuss their investment experience and analysis on entertainment-oriented live streaming platforms.


Live Streaming + Real Time Monitoring


An app of this type appeared on Cheetah Global Lab’s February Rising Apps Rankings. Parents who want to see how their children are behaving, can open an app and see real-time footage from their child’s day care or pre-school. Cheetah Global Labs has also observed the emergence of another type of app that allows users to monitor live feeds from video cameras in real-time through their smart devices.



Screenshots of live streaming apps


III. Behind the Lives Streaming Phenomenon


Through the above examples, it’s apparent that the types of live streaming apps experiencing the most explosive growth are entertainment platforms with added social or interactive elements. Although other types of live streaming services have been developing for quite some time, they have only received a lukewarm response from the market. For these types of apps, live streaming is just a method. They are limited by the particular content of the vertical to which they belong.


Cheetah Global Labs believes that the fundamental reason entertainment-oriented live streaming apps have become so popular is based on determining factors. The first is the ability to reward their performers, or in other words—money.



Papi receiving gifts during live streaming show


Live online performances have existed for a long time. The reason we are seeing a resurgence now is primarily due to a change in the underlying business model. Previously, platforms would hire a performer and pay them a fixed amount or give them a share of the profits. But now, a person’s performance directly influences their income; they are directly motivated to do their best to entertain the audience.


This applies to anyone who is aspiring to be a freelance performer. For example, previously unknown Internet celebrity Dou De’er has earned 4,588,070 “Inke Coins”, or the equivalent of 450,000 RMB.


Attracted by the potential benefits, many people decide to give live streaming a try. After tasting a little success, they begin trying harder to provide even higher quality content, reinforcing the “content is king” model. Once a live broadcasting platform builds enough content, it attracts more users.


This same strategy is employed by popular question-and-answer services like Zhihu and Fenda, in which users make money by answering other users’ questions.


The second determining factor is a sense of participation.


While the first determining factor is related to the content providers, the second determining factor—a sense of participation—applies to content consumers. The difference between live streaming and recorded content is that live streaming is unpredictable, and the audience has the ability to influence the performance.


Through the comment box, audience members can ask the performer questions, request a song sing along with the performer. When an audience member gives the performer a gift, which the performer redeems for money, the performer will often acknowledge the audience member or make a “thank you, baby” hand motion. Sometimes the performer is a normal person, and sometimes they are difficult-to-access celebrities. All of these factors provide audience members with a strong sense of participation, or even a god-like feeling.



Lei Jun making a “thank you, baby” hand motion during a live stream


Xiaomi CEO Lei Jun appeared on Mi Live multiple times in May to announce several products, including the Xiaomi Max smartphone, the company’s new MIUI user interface and a new drone product. During the broadcasts, Lei Jun requested gifts from the audience, including virtual applause, flowers, cars and even a yacht, and the audience was very generous. During a single broadcast, audience members gave him more than three million “Star Tickets”, or the equivalent of 300,000 RMB.



From the above graph we can see that Mi Live’s WAUs peaked during the two weeks of Lei Jun’s live streams (May 9th-15th and May 23rd-29th).


IV. When We Talk About Live Streaming, We’re Really Talking about Social Live Streaming


Cheetah Global Lab believes that it is the social components of live streaming apps that has led to their popularity. Right now, most live streaming apps have classified themselves as social apps, while many social apps have added live streaming features.


Although many people have compared the current battle for live streaming market share to the previous battle for the group buying space, it’s actually more similar to the great battle that took place in the micro-blog industry. The current state of the live streaming industry resembles the second stage of development of the micro-blog market. After micro-blog users reached a certain level, different platforms began to vie for celebrity participation to create online buzz. Recently, Inke hired viral Olympic swimming star Fu Yuanhui to live stream through its platform, with viewership surpassing 10 million; Yizhibo live streamed a conversation between famous celebrities Song Joong Ki and Jia Nailiang; Meipai live streamed a performance by famous boy band TFBoys; Olympic table tennis star Zhang Jike live streamed through Huajiao, and so on and so forth. In the end, users barely even notice which platform they’re on. They just go wherever the celebrities are.



Of course, compared to the long process by which Sina Weibo separated itself from its competitors and ultimately listed on the NASDAQ stock exchange, the live streaming app battle will change much more quickly. The Internet is developing quickly and technology is constantly advancing, so the time in which a single app can remain dominant is becoming shorter and shorter.


V. Grey Zone, a Matter of Life and Death


The birth of every ingenious product and the rise of every emerging industry are accompanied first by completely new challenges followed by all types of struggles, and it’s through these challenges and struggles that the market reaches maturity. The live streaming industry is no different. Live streaming platforms are facing unprecedented challenges.


a. Legal Risk


The most alluring thing about live streaming is its unpredictability and uncontrollability, but this is a double-edged sword which creates huge problems for network supervision.


Relatively early on, there was a popular app called “17”, but due to its inability to control content, it was removed from app stores, thereby missing out on the golden age of live streaming. Now, all of its market share has been carved up by other apps, and users seldom even mention it anymore. An even more egregious example is live streaming app Kuaibo, which ultimately failed because it wasn’t able to stop the proliferation of pornographic content. Even Inke was removed from app stores multiple times in late 2015 and early 2016, and was ultimately forced to change its name for similar reasons.



In order to prevent similar problems, live streaming platforms have hired moderators to monitor for inappropriate content in live stream broadcasts. Some platforms prohibit performers from wearing revealing clothing, such as low-cut tops or spaghetti straps. Some platforms even prohibit performers from eating bananas on camera, which has led to heated discussion online. Gay dating app Blued has implemented a real-name registration policy for live streaming. Would-be performers must first submit a copy of their identity cards for approval before they are able to live stream content.


As live streaming becomes more and more widespread, new monitoring technology is being developed and more and more aspects of the industry are being standardized.


b. The Money Game


Live streaming apps are appearing by the hundreds, with huge amounts of capital pouring into the industry, but an unusually cruel reality awaits them. Not long ago, someone published an open source SDK for live streaming apps, proving the threshold for developing live streaming apps is low. Anyone with mobile Internet industry experience can develop a live streaming app.


Bandwidth is a huge cost for live streaming apps. Users on Zhihu have estimated that Douyu TV spends approximately 300 million RMB on bandwidth per year. Although financing for live streaming apps frequently reaches tens of millions, or even 100 million RMB), it ends up being far less after deducting bandwidth costs.


App promotion is also very expensive. The cost of hiring celebrities, holding live streaming events, and paying for online and offline advertising is invariably expensive.


c.Questions Regarding Fabricated Results, Profitability


Not long ago, a user performed an experiment on Inke. Although he simply streamed a blank screen and continuously cursed at the audience, the number of audience members did not fall and nobody responded to his taunts. Based on this experience, he drew the conclusion that Inke’s platform has numerous zombie users (bots). The user was even able to deduce the formula to for calculating the number of zombie users assigned to each broadcaster. In all likelihood, this problem isn’t isolated to Inke. Every live streaming platform employs these types of questionable tactics to boost audience numbers.


Another common issue on live streaming platforms is performers exchanging virtual gifts amongst themselves in order to pump up their statistics. For example, one performer gives an expensive gift to another, then that performer gives it back to the original performer. In this way, they don’t spend any money, but because they are receiving lots of expensive gifts, they become featured performers, increasing their exposure and leading to even more people watching their performances. Similarly, agencies spend money on the platform for the online entertainers they represent. In the end, the money remains their own pockets. This type of activity makes it more difficult for the best content to be discovered and for the best performers to reap the benefits, while negatively affecting the overall quality of the platform.


d.Highly Homogenized, Too Reliant on Traffic and Content Providers


The user interfaces of different live streaming apps are extremely similar and they are marketed exactly the same way, which makes it difficult for people to differentiate them. This is understandable. In a fierce market competition, whatever is effective in attracting users will more or less be copied by competitors. In such a homogenous market environment, core competitiveness relies on content and traffic.


At present, every live streaming platform employs a rudimentary content recommendation system. Essentially, performers are ranked in order of who receives the most virtual gifts. With performers frequently inflating their own statistics, truly high quality content becomes difficult to find.


Access points are even more crucial. Currently, live streaming apps primarily rely on sharing links to WeChat, Weibo and QQ to attract unregistered users. If these access points are cut off, then these live streaming apps would die out. Weibo already has its own live streaming platform—Yizhibo—and WeChat has been successful in destroying multiple competitors in the past by closing off access points within its app. For live streaming apps, growing through these access points is a race against time.


VI. Survival of the Fittest: The Future of Live Streaming is Revealing Itself


Based on the fierceness of the competition, Cheetah Global Labs has multiple predictions for the direction of the live streaming market:


Prediction #1: China’s live streaming app market will ultimately be dominated by China’s three largest Internet companies, collectively referred to as BAT (Baidu, Alibaba and Tencent). Although China’s Internet market seems to be in a relatively stable condition, it is still intensely competitive. Whether it is micro-blogging, group buying, ride hailing, delivery services, or even the latest battle in the news app space, the results of each of these competitions is surprisingly similar—every industry ends ups with three major players, and never more than five. Moreover, one or two of these players, or even all of them, are affiliated with Baidu, Alibaba or Tencent.


Therefore, Cheetah Global Lab has a bold prediction for the future of the live streaming market: the fundamental layout of the industry will be established within the next year, or even within this year, and some, if not all, of the market leaders will belong to Baidu, Alibaba or Tencent. Due to issues relating to access points, it’s possible that the number of purely live streaming apps will decrease, while multi-purpose apps with live streaming features will seize their lost market share.


Based on public data, Cheetah Mobile Labs has compiled an incomplete list of BAT-affiliated live streaming apps.


BAT-affiliated live streaming apps



Tencent: Preparing for a Rainy Day, Failure Is Not an Option


Tencent appears extremely determined to dominate the live streaming app industry. It’s ambitions in live streaming are all too clear, as evidenced by the establishment of Tencent Cloud; its acquisition of mobile game developer Supercell; its purchase of the broadcast rights to the NBA; its investments in live streaming services Douyu TV and Longzhu TV; and its forays into sports, gaming and e-sports live streaming. Tencent recently live streamed the launch of China’s Long March 7 rocket on Tencent News, a move which marks the company’s entrance into the live news streaming space. Entertainment live streaming through Tencent’s QQ Zone is also an integral part of the plan.


In the game streaming space, Tencent has focused its investments on Douyu TV. On July 16th, 2016, Douyu announced the completion of 1.5 billion RMB in Series C funding from Tencent. Of Tencent’s self-developed apps, Now has experienced the most explosive growth. According to Cheetah Global Lab’s data, Now hadn’t reached the Top 25 as of June, but two months later, it’s become the 12th ranked entertainment live streaming app.


Tencent’s position as a leader in live streaming is easily understandable. On the one hand, Tencent has a natural advantage in live streaming because live streaming and social media are intimately linked, and Tencent is the leading social media company in China. Also, Tencent’s recent acquisition of Supercell gives it a huge shot in the arm in the gaming and e-sport live streaming space. On the other hand, failure is not an option for Tencent in regards to live streaming. If fails in live streaming, Tencent would face huge challenges to its social media dominance. The only thing that is still a mystery is whether or not Tencent will copy Facebook and add live streaming features to its two most dominant social media products—WeChat and QQ. , but Cheetah Global Labs predicts this day is fast approaching.


Alibaba: Strategically Positioned for Both Offense and Defense


For the time being, Alibaba seems to be minding its own business in regards to competing directly with Tencent in the live streaming market. Alibaba has its own Aliyun cloud service and is busy developing a virtual reality (VR) ecosystem. Alibaba is focused on integrating live streaming into its e-commerce business, and in the future, possibly combining live streaming and VR. It’s worth noting that Alibaba has not developed or invested in a purely live streaming service at all. It has only embedded live streaming features in its existing products, which leaves the company a lot of space to push forward or retreat from the market. It has been rumored that a live streaming feature for Alipay has already entered internal beta testing. The latest version of Alipay heavily emphasizes social media elements. It’s clear that Alibaba has strong ambitions in social media. If Alipay ultimately enters the live streaming competition, it could alter the fundamental makeup of the industry.


Baidu: Exclusive Technology Might Help Win the War


As live streaming platforms rush to stake their claims, Baidu has a single-minded focus on entertainment-oriented live streaming apps. In addition to its Baidu Zhibo live performance app, Baidu’s Ala Zhibo app allows users to see the location of performers on a map. There are currently very few apps with a similar feature. Additionally, Baidu’s cloud service benefits from many years of experience in the Internet industry, and Baidu also has unique experience combating pornographic and illegal content on its platforms. If this technology can ultimately be applied to live streaming platforms, the profits to be gained through this technology could be higher than the profits gained from live streaming platforms themselves.


Prediction #2: A new “unicorn” will emerge. The group buying wars produced Meituan, and the micro-blog wars were ultimately won by Weibo. Add to those names companies like Toutiao.com (news) and Didi (ride hailing), and you have a list of companies which started small and eventually became the leading names in their respective industries. Whether it’s domestic companies fighting for market share, or overseas giants like Facebook, Google and Twitter investing in live streaming features, it’s easy to see that live streaming has become a global trend that will be integrated into the social lives of Internet users, and become a common part of everyday life. Therefore, whichever company emerges victorious in the live streaming industry will certainly earn a lasting place in the Internet market as a whole.


According to Cheetah Global Lab’s app rankings, YY and Inke are currently the two most dominant social media-focused live streaming apps, but Inke seems to be the more aggressive of the two. YY’s parent company, YY Inc., is busy expanding overseas, so despite its ups and downs, Inky still has a great opportunity for growth.


According to their recently released second quarter 2016 financial results, Sina and its primary subsidiary, Weibo, have returned to the glory days of early 2011. This is largely due to an increase in Sina’s short video and live streaming users. According to Weibo CEO Wang Gaofei, “Weibo has benefitted greatly from social media marketing, and user growth is maintaining strong momentum, especially in mobile. The number of short video and live streaming users is increasing very rapidly.” We can see from Cheetah Global Lab’s app rankings at the beginning of this report that Sina operates three of the Top 45 entertainment live streaming apps. Combine these with Sina News and Sina Sports, and it’s clear that Sina is a powerful and determined player in the live streaming market. Whether or not Sina, which emerged victorious in the micro-blog wars, will be able to duplicate that success in the live streaming market is a question work monitoring.


Besides Sina, companies like momo, Meipai and bilibili have executed live streaming strategies and have made great progress.


Some people think the company that will ultimately come to dominate the live streaming market hasn’t appeared yet. This is also a possibility. A look at the overseas market might provide further insight into this question.


PART II- Overseas Market: Yesterday Once More


1. From Meerkat to Periscope to Facebook Live: History Tells Us that Competition is All About Traffic


There are relatively large differences between domestic and overseas live streaming apps. The most obvious difference is that overseas live streaming apps are generally of the “take you to see” variety. Most of the apps live stream concerts, sports competitions or other types of events. This emphasis on live streaming events has led people to think that China’s “let you see” live online performance apps are an entirely new creation. But if you look back at the development history of live streaming apps overseas, you will discover that the past and present of the overseas live streaming market reflects the present and future of China’s live streaming market.


When discussing the overseas live streaming app market, one must start by mentioning Meerkat, often considered the originator of social live streaming apps. Meerkat became famous overnight after live streaming America’s South by Southwest music festival in March 2015. The app went viral, and for a short time was the biggest app phenomenon during the first quarter of 2015.



But then just one year later, in March of 2016, Meerkat officially shut down. Meerkat’s rapid fall is primarily a result of Twitter purchasing rival live streaming app Periscope and blocking Meerkat’s access to its “social graph”, thereby rendering Meerkat’s contact import feature inoperable.


Periscope has become the most representative overseas live streaming social app. Following a year of competition and upgrades, Periscope is still growing steadily. It has become the market leader, and was even named by Apple as the iPhone “App of the Year” for 2015.



Screenshots of Periscope


According to data compiled by appinsight, Periscope’s users are evenly distributed worldwide. What’s so great about Periscope that has allowed it to conquer the world? The following features have helped Periscope achieve such great success:


a.Precise Personalized Recommendations


Periscope’s personalized recommendation system is far more advanced than most of China’s domestic live streaming apps. Precise personalized recommendations ensure that every live stream host has the opportunity to be discovered. Although Cheetah Global Labs currently has no way of knowing the specific factors that go into Periscope’s personalization algorithm, it is likely related to multiple factors, such as Twitter relationships, user language and geographic positioning.


By providing accurate personalized recommendations based on similar interests and language, Periscope leverages users’ enthusiasm and increases the possibility of interactions. In this way, Periscope is able to remain popular with hosts and users alike, despite its lack of a virtual gift-giving system.


b. Users can Watch Real-Time Content Anywhere around the Globe


When users click on Periscope’s world map, they can view live streaming content 24 hours a day. Through the “explore” feature, users can select any region around the globe to view live streaming content.


Although Periscope has enjoyed enormous success, recently, pressure on the app has been mounting. Namely, social media giant Facebook has joined the fight by adding a live streaming feature to its mobile app—“Facebook Live”.


The advantage of Facebook’s live streaming service is that anyone who has the Facebook app can use the live streaming feature; they do not need to download and install a separate app. At the Global Entrepreneurship Summit (GES) 2016, Facebook CEO Mark Zuckerberg and US President Barack Obama participated in a live stream broadcast via Facebook Live. Also, on June 2nd, during Children’s Day, NASA’s Facebook page live streamed a 20-minute conversation between three astronauts on the International Space Station (ISS) and Zuckerberg. More than one million people viewed the conversation live, with views quickly topping 6.3 million.


2. Snapchat: Not Technically Live Streaming, but It’s What Everyone’s Following


As Facebook, Google and Twitter all enter the live streaming market one after another, will other overseas apps be able to survive? One app that can’t be overlooked is Snapchat. Strictly speaking, Snapchat isn’t a live streaming app. Its “Live Stories” feature is more of a short video sharing feature. But Snapchat has always shown a great interest in sports. Snapchat has a partnership with the National Football League (NFL) to provide exclusive broadcasts from inside NFL locker rooms and other post-game content. It has also partnered with Major League Baseball (MLB) to let players post exclusive video. Snapchat also signed a deal with NBC to broadcast important competitions from the Rio Olympics. These types of partnerships are very similar to traditional forms of live streaming. The quality of Snapchat’s broadcasts and its clear profit model provide a template for China’s domestic live streaming apps to study and emulate.



NFL released its Live Story on Snapchat


There are also rumors that Snapchat plans on adding augmented reality (AR) functionality to its platform. Gatorade has released a filter on Snapchat based on AR technology, which allows users to dunk a virtual Gatorade cooler over people’s video selfies. Also, Snapchat quietly purchased 3D image app Seene recently, which illustrates Snapchat’s interest in VR technology. AR and VR will likely be one of the next big trends in live streaming.


As the app with the youngest current user base, everything Snapchat does will being watched very closely and copied by its competitors.


3. Twitch: Dominating the Overseas Game Streaming Market



Twitch is currently the most dominant live streaming platform for online games overseas. The difference between it and other live streaming social platforms is that there is a clear profit model for channels hosts on Twitch, which is worth being studied by China’s domestic game streaming platforms:


a. Subscription model: Each month, users pay a certain amount of money to watch content through a host’s channel. Most of the money goes to the channel host, while a small amount goes to Twitch.


b. Hosts can allow Twitch to post interstitial ads on their channels. The majority of the ad revenue goes to Twitch, while a portion is shared with the host.


c. Hosts of specific games can earn profit by participating in special events held by Twitch.


Youtube, which previously failed in its attempt to purchase Twitch, has also introduced live streaming functionality to its mobile app, featuring e-sports, gaming and sports competitions. But Youtube is a comprehensive video website. It is unclear whether it will be able to topple Twitch in the game streaming vertical.


4.Current Situation: Heavyweight Apps Overwhelmingly Dominant


Although the apps mentioned above each have their own strengths, in the US market, the biggest mobile apps still maintain an overwhelming market share advantage.



5. Challenges Facing Overseas Live Streaming Apps: Copyright Issues, Ethical Risks and Privacy


According to public data, it’s clear that the problems facing overseas live streaming apps are similar to the problems faced by live streaming apps in China. Copyright infringement is the biggest problem because many users like to live stream sporting events and concerts. Regarding this issue, most live stream platform operators can only rely on human employees to monitor the content. Snapchat, which has faced copyright lawsuits in the past, has developed a relatively good method for dealing with copyright issues. To control the live streaming content of users, Snapchat has developed a system by which users submit live footage from one event, which Snapchat then edits into a single feed. This way, Snapchat can live stream an event while avoiding copyright violations.


Ethical risk is a problem faced by live streaming platforms operators all over the world. Preventing inappropriate content such as pornography and violence presents difficulties in terms of supervision and oversight. In addition to strengthening the approval process for broadcasters and hiring more moderators, improved supervision will also rely on advancements in technology. Following the rapid advancement of artificial intelligence (AI), facial recognition has already become a reality. The ability to automatically recognize nudity and violence is not far off.


Privacy and security issues primarily arise from live streaming platforms’ use of user location information. Also, thought live streaming content, it is possible for users to divulge personal information. It is important for users themselves to be aware of the security and privacy threats related to live streaming.


PART III- From China to the World: What Can We Export?


1. Different Challenges for Domestic and Foreign Live Streaming Services: Internet Celebrity Economy and Beautification Technologies



Note: An active internet celebrity on Live.me (left); female live stream host after beautification (right)


Although live streaming apps appeared earlier overseas than in China, many people think that domestic live streaming apps are more advanced than their overseas counterparts. This opinion is primarily related to the internet celebrity economy of domestic live streaming apps.


The concept of Internet celebrities appeared earlier overseas, where early on, famous bloggers and Youtube stars entered the public consciousness. But the monetization of Internet fame is still in a relatively early stage overseas, where most Internet celebrities are simply hired by companies to appear at events. Contrast this with China, where live streaming platforms allow performers and hosts to receive gifts and money from fans directly, which attracts more performers to the platforms and motivates them to work harder.


Another area where China’s live streaming apps are superior to overseas apps is in their use of real-time beautification technology. Beautification features are an integral part of live streaming apps in China, and it is the characteristic that most distinguishes them from overseas apps.


Neither Periscope nor Facebook Live currently have beautification features, but in the rising app rankings and photography app categories of every country, we see examples of beautification apps. This shows that overseas users have a strong demand for beautification software. This can be incorporated into overseas live streaming apps, allowing users to beautify their live feeds in real time by adding virtual makeup, making their faces appear skinnier or making their eyes look bigger. They can also incorporate filters that make their faces look funny, as Snapchat already does.


2.Live.me’s grand entrance: app’s advanced model drives Live.me’s rapid advancement in the US streaming market



Unlike the major American mobile streaming app Periscope, Cheetah Mobile's Live.me utilizes the Chinese “stage mode.” The streamer is always the subject of the stream, and their artistic ability and performance make up the content of their streaming. Live.me also allows viewers to purchase virtual gifts from the app store, which they may give directly to the streamer. The streamer can then convert those gifts into actual money. This mode encourages creators and audiences to build direct connections. The interactivity between the streamer and his or her fans then becomes a major reason why they all choose to remain on the app.


Although this form of mobile streaming is already very widely utilized and popular in China, where supply looks like it may surpass demand in the future, it is still very new in the United States. The US-developed app YouNow has a similar rewards function, but Live.me has done a better job than YouNow in this respect. Live.me ranks streamers based on the number of gifts they have received, and those who are ranked highly attract viewers more easily, so their incomes increase. This then attracts more streamers to the platform, and encourages them to stream more, so they can get more gifts. The platform also ranks fans by how much they support the streamers, and the fans give more gifts to attract the streamers’ attention.



Live.me’s streaming layout has a rewards function, and ranks streamers by their income daily.



Live.me ranks fans by their support for streamers


Because Live.me is set up in this way, its weekly active users has grown continuously since entering the US market. According to appinsight’s data, on April 4 2016, Live.me’s weekly active users on Andriod made up only 0.03% of the US Android market, lower than its competitors Periscope and YouNow. But three months later, Live.me had not only left YouNow far behind, as of the beginning of July, it even surpassed Periscope in weekly active users. In three months, it experienced a shocking 967% growth.



Live.me’s Growth in the US Android Market-Active Penetration


4/4/2016 7/4/2016 Growth Rate over 3-month Period
0.03% 0.32% 967%

Note: Growth rate = (Period A active penetration - Period B active penetration) / Period B active penetration


Meanwhile, in the iOS market, Live.me has achieved a similarly impressive number of downloads. In July 2016, in App Annie’s rankings of downloads, Live.me ranked number 50 in that month’s US iOS market with 1.44 million downloads.



App Annie’s July rankings of iOS market downloads


Based on AppAnnie data, a comparison of the download figures of Live.me and Periscope on iOS and Android reveals some interesting trends.



The Android and iOS download figures show that on April 4th, Live.me only had less than 800 downloads per day, but by April 25th, its downloads had started to approach Periscope’s numbers for the first time, and on June 6th, Live.me surpassed Periscope completely in terms of daily downloads. By July 4th, less than one month later, Live.me had reached 42,000 downloads per day, more than double Periscope's total, and a nearly 6,000% increase over its download figures from April 4th. Compare this to Periscope, which has seen its daily downloads level off and even decline slightly over the same period.


Live.me has not only rapidly increased its users, but has also developed an excellent reputation. Of the 24,841 users who rated the app on Google Play, 19,231, or 77.4%, gave it five stars. The app’s overall ranting is 4.5, higher than YouTube’s 4.1 during the same period.



Live.me’s ranking on Google Play



YouTube’s ranking on Google Play


The Internet Celebrity Economy and the Star Factory


The secret to Live.me’s ability to rapidly attract a large number of users is its focus on cultivating internet celebrities, and drawing fans to them. Live.me has even attracted some American internet celebrities who had already become famous on YouTube, such as Roman Atwood, Lohanthony, and Jennifer Veal, and they have shared their Live.me streaming on other social platforms. This mechanism for creating stars is based in Live.me’s clear user targeting.


First, let’s take a look at the data to see which apps Live.me’s users are also using.



Analysis of Live.me’s degree of user overlap shows that most active users of Live.me are also using YouTube, Facebook, Instagram, Snapchat, musical.ly, WhatsApp, and other social, video apps. Additionally, users of these apps are mainly young people under the age of 25. Users around this age like to express themselves and enjoy receiving attention from fans. At the same time, the possibility of generating income makes streaming a reputable job, instead of “slacking off.” Audiences around this age also enjoy making the streamers they like more and more famous. In the process of following their idols, they find friends who share their interests, and develop a sense of belonging in a fan community.


Huge future ad values


In the long term, although streaming platforms whose main selling point is rewards functionality do not generate profit from ads, this does not mean that they lack ad value. Americans value “quality content” more deeply, and because US audiences are used to paying for quality content, internet celebrities who incorporate an ad into their content may generate a strong reaction among their fans.


Take Vine, for example. Vine is Twitter’s short video app whose users can post short videos of six seconds or less. For US advertisers, this app is already an extremely useful promotional tool. An article published by US media outlet Practical Ecommerce said that at present, over one third of online retailers had begun to use Vine to promote their products. A survey conducted by social media platform 8th Bridge revealed that among the 800 interviewed e-commerce retailers, 38% used Vine to expand their markets. If Live.me can attract quality young users, streamers may be able to plant ads in their streams to generate ad revenue, killing two birds with one stone.


Live.me’s success in the United States is an example of Chinese models duplicating their success in America. In the future, it’s certain that more and more mobile products will duplicate the results of their successful practices in China in the developed countries of North American and European markets to become part of mainstream American culture.


3. Musical.ly’s Live.ly App Has Become Latest Popular Live Streaming App in the US



Short video social network app operator Musical.ly, which has received investment from Cheetah Mobile, is another successful overseas case study. Musical.ly currently has approximately 50 employees at its Shanghai headquarters. Since being launched, Musical.ly has focused primarily on the US market, while quickly becoming one of the most popular social networking apps among young people in the US.


Following the success of musical.ly, its development team released an independent live streaming app called live.ly. According to reports, live.ly officially went online on June 23rd, and by June 29th, it had already reached 500,000 downloads. This quickly surpassed downloads of established competitors such as Facebook, Snapchat and Instragram over the same period, landing it on the spot of the Apple’s iOS Free App Rankings.


Live.ly allows celebrities and Internet stars from musical.ly to interact directly with their fans. The app will likely introduce virtual gift-giving and even real-time applause features soon. Most of live.ly’s users consist of young people, a demographic with a higher activity level and stickiness in online communities than other user groups. Due to these factors, the monetization capabilities of live.ly are worth monitoring.


Live.me and live.ly are duplicating the success of the “China Model” in the US. We believe that in the future, as more and more mobile apps achieve success in China, they will be duplicated in the European and US markets, and ultimately enter mainstream US culture.


By: Rosa, Rebecca & Roy


Explanation of Data:


1. Unless otherwise noted, all data comes from Cheetah Mobile’s 2.762 billion installations worldwide and 651 billion monthly active users;


2. Data collected through normal use of Cheetah Mobile products, adherent to all relevant laws and regulations;


3. Rankings bases on weekly active user numbers;


4. Data limited to the scope of Cheetah Mobile’s products and user distribution, which are only available on the Android platform.


Copyright Clarify
Copyright ownership of data, conclusions, images, graphics and other components in this report belongs to Libra.Any media, websites, individuals or organizations share not be uploaded, posted, modified, distributed, reproduced, or used in other ways without permission.