"Beauty Show Ecosystem" Who are the users of 9158

On July 9, Tiange Interactive, the parent company of 9158, a well-known social video platform in the mainland, was successfully listed in Hong Kong. 9158 focuses on "beauty shows" and was once called an "online dance hall" by the media. It was also criticized by the public for the risk of implying "pornographic content".

The other side of the controversy is the profitability of Tiange Interactive and the popularity among investors. Tiange's gross profit margin of 87.6% exceeds that of most domestic Internet companies, triggering Sina and 360 to compete for investment. Before listing, Tiange received 75.13 times oversubscription in Hong Kong, and was issued at a price close to the maximum issuance limit. On the first day of trading, it soared 13.45%.

Behind the profits and risks of Tiange Interactive, there are 34,800 anchors, 24,500 room owners, 1,200 sales agents, and 3 distributors, who constitute multiple links in the Tiange Interactive "ecosystem", but none of them are Tiange employees. With 200 million registered users, Tiange has only 898 employees.

In addition, companies such as Sina and 360 have also participated in Tiange Interactive's "Beauty Show" business through investment and other means. Their participation has given Tiange Interactive's future transformation more imagination.

Nearly 60% of users come from third- and fourth-tier cities

Log in to 9158.com, and you will find that the most common and popular video chat rooms are mostly like this: beautiful anchors sit in and sing the most popular songs of the moment, or chat with the audience, or even "flirt". The audience can watch, or spend money to buy virtual gifts for the anchor, or "apply to go on the microphone" to interact with the anchor and other audiences.

As of the end of 2013, there were 26,000 video chat rooms like this on Tiange's various platforms. These chat rooms were home to 34,800 anchors, 24,500 room owners, and attracted more than 200 million registered users.

Among these registered users, about 270,000 are paying users, spending an average of 1,000 to 1,200 yuan per year to buy virtual gifts for the anchors or to give to each other.

Virtual gifts can be as small as red roses and lollipops, or as large as private jets, yachts, or even marriage proposals. The price of gifts ranges from RMB 0.01 to RMB 100,000. To purchase virtual gifts, you must use virtual currency issued by platforms such as 9158. The sale of virtual currency has become Tiange's largest source of income.

Anchors or room owners who successfully attract more virtual gifts will receive financial rewards from Tiange Group or cooperating distributors.

In addition to sending gifts, users can also spend between 100 yuan and 40,000 yuan to upgrade to VIP status. VIP privileges include entering full chat rooms, having their names appear at the top of the chat room user list, and having special titles that symbolize their status.

Thanks to these paying users, Tiange Group's revenue in 2013 reached 548 million yuan, of which gross profit was 480 million yuan. The gross profit margin of 87.6% is far beyond the reach of many Internet companies, and the net profit margin also reached 37.6%.

Who are the users of these social video sites?

Tiange Interactive said that 59% of users are from third-tier and fourth-tier cities, 30% are from second-tier cities, and 11% are from first-tier cities. Tiange explained that this is because second-tier to fourth-tier cities generally lack offline social interaction tools. On platforms like 9158, active users spend an average of 20.1 hours per month.

Was investigated by the police for drug use video

Unlike general video websites, social video interactive platforms like 9158 rarely produce or purchase copyrighted video content. Instead, almost all of it is generated by users. Tens of thousands of chat rooms make content supervision a difficult problem, and illegal content such as pornography, violence and terrorism becomes a risk to platform operations.

Tiange Interactive's prospectus disclosed that in August 2011, a user played a video about drug use through the platform. Since the company's content monitoring team had never encountered such a situation before, the content was not detected. The relevant video remained online for a period of time and was subsequently investigated by the Jinhua Public Security Bureau of Zhejiang Province.

Fortunately, the Jinhua Municipal Public Security Bureau has issued a confirmation letter confirming that Tiange has not violated any laws and regulations and has fully cooperated with the police investigation.

After that incident, Tiange provided the Jinhua Public Security Bureau with a privileged user account with the same permissions as content monitoring employees, allowing the police to monitor activities in live video chat rooms.

Tiange has also developed an automatic detection system that will take snapshots of the video every 1 to 3 minutes. Suspicious content will be automatically screened out and sent to on-duty staff for review.

The prospectus discloses the calculation method of part of this system - using technology that can detect special facial features (such as eyes, nose, and mouth) and calculating the proportion of the screenshot area occupied by the face, because if the proportion of the screen occupied by the face is large enough, it is difficult for indecent parts of the body to be exposed.

In addition, Tiange has established a 74-member full-time content monitoring team and requires anchors and chat room owners to monitor bad content. The prospectus states that in 2013, the company has taken action against a large number of pornographic, vulgar, and drug-taking videos and reported them to relevant authorities, including 4,874 cases of pornographic behavior, 2,409 cases of vulgarity, 312 cases of drug taking, and 351 other cases.

Despite this, the prospectus still prominently mentioned that the "Clean Internet 2014" campaign may pose an operating risk to the company. The company said: "We cannot assure you that Chinese regulatory authorities will not consider us to be promoting the dissemination of pornographic or other illegal materials."

Broadcasters, room owners, and distributors in the ecosystem

In Tiange's prospectus, the word "ecosystem" has become a high-frequency word. In the entire industry chain of video shows, although there are 200 million registered users and 34,800 anchors, there are only 898 employees who actually belong to Tiange. In this "ecosystem", anchors, room owners, sales agents, and distributors all have close interests with Tiange, but they are not employees of Tiange.

First of all, in 9158, chat rooms are created by users’ own applications. According to the rules, to apply for a permanent chat room, the applicant needs to have at least 5 anchors, and they will be evaluated by Tiange’s operation team based on their performance ability.

Secondly, only about 15% of 9158's virtual currency is sold directly to users by Tiange Group, and the remaining 85% is sold through the distributor system. Currently, Tiange Interactive has only 3 distributors, and among the 8 platforms, each platform has no more than 1 distributor.

These distributors signed an agreement with Tiange and could obtain virtual currency from Tiange at a 40% or 70% discount. At the same time, Tiange also required distributors to carry out publicity and marketing activities at a certain percentage of the total value of the virtual currency.

However, distributors do not sell virtual currency directly to users. The final sales transaction is between sales agents and users. These sales agents are spread across 26,000 chat rooms. In some popular chat rooms, there are even multiple sales agents. They are similar to Taobao 's "shop assistants". While selling virtual currency, they are also responsible for providing users with some usage instructions.

These sales agents are recruited and trained by distributors. They "purchase" virtual currency from distributors at the original price and receive a 10% to 20% commission from the distributors 7 to 10 days after the sale is completed.

Just as important as selling virtual currency, these distributors are also responsible for discovering and rewarding anchors.

The prospectus states: Distributors manage all aspects of our ecosystem, including recruiting anchors and identifying commercially profitable types and chat room content. In addition, distributors are required to pay bonuses based on the anchors' performances and the popularity of their programs. The amount of the bonus is based on the average number of daily viewers in the chat room and the number of virtual gifts exchanged in the chat room.

Since May 2013, Tiange Interactive has also started to reward room owners who are not anchors. However, these rewards are not issued directly by Tiange Interactive, but through third-party labor companies.

Sina and 360 indirectly participate in Tiange business

Despite the risks, the "video show" business has blossomed in China. Websites such as Huya, which is listed in the US, Guagua.com, in which Enlight Media holds a stake, and Liujianfang.com all have similar businesses. NetEase 's "BOBO Entertainment" has also been launched in a low-key manner. In addition, Sina and 360 have directly participated in Tiange's show business through investment and other means.

In the list of shareholders of Tiange Interactive, founder Fu Zhengjun is the largest shareholder, and the second largest shareholder is Sina Hong Kong, holding 32.87% of the shares. Qihoo 360 became the basic investor of Tiange before its listing, and established the "Tianhu" company in a joint venture with Tiange.

The cooperation between Tiange and Sina began in 2010. In that year, Sina invested 10 million US dollars to become a shareholder of Tiange Interactive. Subsequently, Tiange took over Sina's "Sina Show" business and was entitled to all profits from this business.

Under the management of Tiange Interactive, the revenue of Sina Show increased from less than 2 million yuan in 2010 to 232 million yuan in 2013. Today, Sina Show has surpassed 9158 and become the video show platform with the largest revenue under Tiange Interactive.

In addition to Sina, Qihoo 360 also started cooperation with Tiange last year. On August 29, 2013, Tiange and Qihoo jointly established a company called "Tianhu", with both parties holding 51% and 49% of Tianhu's equity respectively. According to the agreement, after Tianhu obtains the relevant business license, Tiange will transfer part of the social video community business to Tianhu. Not only that, Qihoo 360 also became a basic investor of Tiange Interactive before its listing.

In return, Qihoo 360 will transfer its 360 Magic Camera software to Tianhu and promote Tiange's new mobile games. Some commentators said that 360 has become the "biggest backstage" of Tiange Interactive. Against this background, Tiange announced its entry into the mobile game industry, saying that it will release 6 to 8 mobile games in 2014.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.