The end of live show monetization?

Regulators take measures to regulate live broadcast rewards .

On May 7, four ministries jointly issued the "Opinions on Regulating Online Live Streaming Rewards and Strengthening the Protection of Minors." It stipulates that online platforms should cancel all reward lists within one month of the release of this opinion, and it is prohibited to rank, direct traffic, and recommend online anchors based solely on the amount of reward, and it is prohibited to rank users based on the amount of reward.

"Thank you for the carnival!" "Thank you for the gift, brother. After the PK is over, I will fulfill one of your wishes!" From the development of the Thousands of Live Broadcast Wars to the present day, rewards and rankings have been standard features of live broadcasts. The new regulations have undoubtedly touched the nerves of stakeholders such as live broadcast platforms, MCN organizations, guilds, and anchors.

Times Finance found that after the opinions were released, the reward lists of most platforms were no longer sorted according to the amount of reward, and the top player on the list disappeared at the top of the pyramid.

"The live streaming ecosystem is about to change, and the popularity of top show hosts may be divided up." A member of the MCN live streaming guild told Times Finance.

Income shrunk by 90%, half of the top guys ran away

Before seeing the new live broadcast regulations, anchor Xiao Xiao felt the chill of the entire live broadcast industry, "I'm so anxious, is entertainment live broadcast going to disappear?"

Since the end of April, Xiaoxiao's live broadcast room has experienced a cliff-like drop in traffic. After finishing a 3-hour talent show live, Xiaoxiao's data page showed that there were 1,731 viewers and 1,367 sound waves. Sound waves are the currency of the platform. 10 sound waves are equal to 1 RMB, which means that Xiaoxiao’s income from a live broadcast is less than 150 RMB. After deducting the share with the platform, the income is even smaller.

"This result has brought me back to the level of a new anchor overnight." Xiaoxiao said. Two months ago, Xiaoxiao could get more than 20,000 sound waves and earn 2,000 yuan from a live broadcast of the same length. At that time, she felt that she was just one step away from reaching a million sound waves.

After only eight months in the industry, Xiaoxiao is already considered a veteran in the field. She knows well the secret to capturing traffic and that one needs to choose a stable live broadcast time slot. Xiaoxiao's live broadcast time is set from 12 am to 6 am, relying on the length of time to gain more attention.

Another important part of the live broadcast process is the live broadcast PK. The rules of the game are that the anchor challenges another live broadcast room. Within a certain period of time, whoever receives the most gifts is the winner, and the loser needs to be punished. Relying on the winning and losing mentality of the audience in the live broadcast room, the anchor can receive intensive gift rewards in a short period of time, pushing the popularity and traffic of the live broadcast room to a peak.

"The active big brothers always come and go. Halfway through this period, there is no one willing to give generous rewards anymore." Xiaoxiao’s situation represents the living conditions of most anchors: the number of people willing to “spend money” in the live broadcast room is decreasing.

This year's 315 Gala exposed the absurd incident in which a male operator of a show live broadcast guild pretended to be a female anchor and defrauded users of rewards. Afterwards, many show hosts began to appease the top players one by one, and some even made video calls to clarify their identities.

In the industry’s view, the top giver on the reward list is the anchor’s bread and butter. Their names will be mentioned repeatedly by the anchor during the live broadcast, and they even have to maintain good relationships with other generous viewers for a long time.

A game anchor told Times Finance that tips are an important source of income for anchors. "In the game anchor circle, everyone pays a lot of attention to appearances. Top anchors can earn millions of yuan in tips for just one live broadcast."

A live show that cost hundreds of thousands of yuan and was supported by tips

Giving rewards in the live broadcast room is undoubtedly a powerful tool for attracting traffic. Behind the hosts' lavish spending, the givers also have their own calculations. When the hosts repeatedly name and thank the top-ranked people, the audience will shift their attention to the top brothers and sisters who are at the pinnacle of wealth.

As the adrenaline surges, the audience on the other side of the screen sometimes forgets that they are "throwing money" crazily.

A few days ago, Huihui, who was watching the live show, was favored by the female anchor, who sang the song he requested in the comment section. At that moment, Huihui felt that he was the most popular person in the audience, and the price he paid was spending more than 500 yuan on gifts.

"The live broadcast atmosphere was very good at the time, and the host was also cheering, so I was impulsive and clicked on gifts continuously." However, compared with the real number one on the list, Huihui's record can only be regarded as a drop in the bucket.

In fact, many popular anchors have come into the spotlight through tips. For example, Simba once "ranked on the list" in the live broadcast rooms of some big anchors by giving millions of gifts to gain the attention of fans.

After that, live broadcast rewards became a tried and tested method for the Kuaishou family. After Simba became famous, his disciples including anchors Dandan, Mao Meime, and Shi Da Piaoliang successfully broke out of the circle by using the same method, attracting wave after wave of Simba's 818 fan groups and firmly securing the huge number of fans on their own turf.

As the new top star of Tik Tok, Liu Genghong’s live broadcast room also witnessed the last glorious moment of rewarding. Qin Fen, chairman of Shanghai Fenrong Investment Company, paid attention to Liu Genghong's live broadcast room. In just half an hour, he rewarded Liu Genghong with 82 carnivals worth 246,000 yuan.

Another user who dominated Liu Genghong's reward ranking list was a user named "Xiao Zhan's Wife", who had previously made her presence felt on Wang Meng's commentary channel at the Winter Olympics. After several times of rewarding and topping the rankings on the platform, the user claimed that she had spent 11 million yuan.

The results are obvious. "Xiao Zhan's wife" quickly became a well-known figure in the fan circle, gaining 211,000 fans in three days, and the current total number of fans is 416,000.

However, the chart-topping tycoons are just a carnival for a few people after all, and the financial reports of major live-streaming companies are reflecting a common dilemma: the live-streaming monetization tactics are losing their effectiveness.

From 2018 to 2021, Huya's live broadcast revenue contributed 95.3%, 95.2%, 94.5% and 89.7% of its total revenue respectively. During the same period, Douyu's live broadcast revenue contributed 86.1%, 90.9%, 92.2% and 93.8% to its total revenue respectively. The two platforms also stated in their performance reports that their revenue mainly comes from the sales of virtual gifts.

However, the income from tips did not lead to a leap in performance. In 2021, Huya achieved a net profit of 583.5 million yuan, a year-on-year decrease of 34.01%; while Douyu suffered a loss of 504.9 million yuan in 2021, with a net profit decline of 204%.

Without a source of income, what do the anchors rely on?

Live streaming rewards have always been a key area of ​​supervision, and have been increasingly stringent in the past two years.

In February 2021, the Cyberspace Administration of China and seven other departments jointly issued the "Guiding Opinions on Strengthening the Standardized Management of Online Live Streaming", which for the first time proposed the establishment of a "cooling-off period for rewards" and a "delayed payment period".

For this reason, major platforms also took action.

In June last year, Douyin announced that "private donations from minors will be fully refunded after verification", which means that if minors make donations without the permission of their guardians, Douyin Live will refund the full amount within 24 hours. From May 2020 to March 2021, Douyin Live processed refunds for underage rewards for 36,000 users, with an average refund time of 19.7 hours.

Liang Dong, a host recruiter for an MCN agency, believes that live show broadcasting is a place to make quick money and has a high staff turnover rate. Since the investment cost of live broadcasting is relatively small, many hosts will give up within half a year when they see no hope. Some people also join the ranks of live broadcasting to sell goods.

Xin Douyin data shows that in 2020, 38% of mid-level and top show hosts chose to sell goods through live streaming.

"For big anchors, the cancellation of the list will have a greater impact, and traffic will naturally flow into the live broadcast rooms of small and medium-sized anchors." Liang Dong told Times Finance.

Simba's team, which once made its fortune by manipulating the charts, successfully transformed into live streaming to sell goods. Simba retreated behind the scenes, and his apprentices supported half of the Kuaishou anchor list.

Xiaoxiao admitted that talent-type live broadcasts are being abandoned, and major platforms are more willing to invest their energy and traffic in e-commerce live broadcasts. When the market was at its best, Xiaoxiao's colleagues could still earn more than 200,000 yuan per month after deducting the guild and platform share. It is now difficult to reproduce that former glory.

The uncertainty of income forced Xiaoxiao to find a way out for herself. She decided to start a small team to study the traffic rules of short videos. "I have shot two or three short videos now, but the rhythm presented is not accurate enough, and the data in all aspects is still quite miserable."

"The income model of the anchors is too single. The reward list is still the first step for the anchors to be valued by the platform and the guild. Only when they become famous can they have other income such as video playback conversion, commercial promotion, and advertising. Otherwise, they will have to continue to rely on gift rewards." Liang Dong told Times Finance.

(All interviewees in this article are pseudonyms)

Author: Xu Xiaoqian

Source: GlitchNews (ID: timetech2020)