The Livestreaming Economy
Did you know that a lot of Chinese farmers survived the pandemic through live-streaming? As novel and strange as it sounds, let’s take the example of Li who had harvested flowers in Yunnan province of China, just before he heard of the new Coronavirus outbreak. All his hard work went down the drain as his flowers wilted and decayed during the lockdown. As someone who was a happy farmer selling his produce to national distributors across China, it devastated him when the pandemic-induced lockdown almost destroyed his business. Even his distributors shut shop when panic gripped the country with the rapid transmission of the Coronavirus.
After waiting a week, a dejected Li rang up his old friend at JD.com to talk about his problems with a wasted harvest. Surprisingly, his friend had suggested that Li create a few hours of content for them through the company’s app, JD LIVE, elaborating on different products he sells and answers questions from potential buyers. That way, Li was promised a network of buyers from the company in return for a small percentage of sales.
Li took the offer and began live-streaming content from his farm. This soon became a reality across China where companies like JD.com and Alibaba’s TaoBao discovered a whole new market during the pandemic if they could connect farmers to their new buyers. For several farmers across the world who discovered the power of e-commerce, what was mostly an offline transaction (in the pre-pandemic times) became a thriving online business. All they did was live-stream their content, in creative ways where a buyer could not only learn new things about farming or agriculture but also grow their own food at home.
Interestingly, the response to live-streaming from farmers also caught the attention of several social media influencers during the pandemic as they came forward to market these farmers’ harvest on a pro-bono basis. Not only did they make frequent visits to help out farmers and show their followers how farmers have been struggling, but they also taught a lot of rural farmers to use apps for live-streaming. Gradually, a lot of rural farmers across China have relied on JD.com and Alibaba’s Taobao to sell their produce through new channels.
Live-streaming platforms have grown rapidly across China. Capstone Project reveals that “by December 2016, there were 344 million live streaming users in China, with an increase of 20 million users within 1 year.” The proliferation of live stream has been considered as a business opportunity because of its profitability. It is reported that Bigeve Cheung, a famous Chinese live-streaming celebrity earned more than 300 million RMB dollars in 2016. For this reason, many live streaming companies have been established to support this industry.
The numbers clearly indicate that the live streaming market is growing at a massive rate. In 2016, the industry was already worth over $30 billion. By 2021, it is expected to be worth over $70 billion, meaning it has grown by 133% since 2016. Interestingly, the total number of hours watched on the four major streaming platforms was 1,971 billion in April 2019. Fast forward to April 2020, and this has increased to 3,934 billion, representing a massive growth of 99%.
Trending through the pandemic
While China’s rural farmers exemplify how technology can empower people, it also shows that live-streaming does offer handsome returns for people who are willing to learn the ropes. For instance: The music industry across the world took to live-streaming actively, soon after the lockdown. “United We Stream” from Berlin became an initiative where DJ’s live-streamed their shows for the global audience and parallelly, raised money for clubs that were on the verge of shutting down. From singers to stand-up comedians, DJs, artists and others, a lot of companies or clubs associated with these talents have been betting big on the online audience for their shows.
Closer home, BookMyShow has been supporting talent. For virtual stand-up comedy shows, the company sold tickets at minimal rates to make these shows accessible to the online audience who would happily watch them from the comfort of their homes. Similarly, live-streaming fitness events, singing shows and brand launches too have caught up with consumers.
Consider Bulbul from India. This video e-commerce platform allows live shopping where users can watch videos in local language and buy products. Other platforms in India such as Simsim and Pesopie too have been catering to the needs of users in the live-streaming space. Even Flipkart apparently is piloting a new influencer-led social commerce platform called the 2GudSocial, focussed on an audience from small towns and lower-income groups.
Even technology companies have begun modifying their offerings to fit into the live-streaming trend and make the most of it. While Facebook Live, Youtube, Periscope on Twitter haven’t transformed much, Instagram, Snapchat, Twitch have undergone a sea change over the pandemic along with the insertion of ads.
Let us consider electronic music platform Resident Advisor for instance. With online live-streaming of music becoming ubiquitous, the platform has created a separate space called “Streamland” to catch up on live-streaming events from DJs and music artists. Amidst this race to make waves, start-ups are not far behind. Many start-ups have mushroomed in this space. Take UStream for example. This start-up aims to become the largest public-access new media company that there is.
Live-streaming isn’t only about the money
So why the craze for live-streaming? Wouldn’t it generate the same audience as recorded or taped videos do? Well, here’s how companies view the business of live-streaming: If it was a live stand-up comedy event (in the physical world) in an auditorium, one would, maybe, have about 250 to 300 people. But, if you live-streamed the event, not only would you amplify the online audience apart from that limited set of people, but also be able to leverage this audience for brand awareness and engagement. According to the Livestream survey, 80% of consumers prefer to watch live videos from a brand than read a blog.
Are they not concerned about money then? Not everyone is. Firstly, the whole business of live-streaming adds an ultra-cool factor to brands. Which company would miss an opportunity to portray itself as a “hip and happening” brand right? Well, this is the same. But let’s try to understand this from a different perspective — why would someone watch something live over the Internet?
Consider the Oscars for example. The Red Carpet part of the Show is streamed two to three hours before the actual show begins. That includes random camera angles, hustle-bustle of the event, several gaffes, celebrities sashaying in with their dreamy or weird designer outfits. This part of the streaming also includes the most boring parts before the actual show begins. But, it is also the most important time where the audiences tune in. Wait… why do they do that? It is about “being there.” Most people who watch it prefer to be there or at least get a sense of what it feels like to be in the milieu. Maybe it is not as good as being there but it is the closest thing. So, it is all about people wanting to be part of the experience.
Future of live-streaming
While a lot of live-streaming revenues are still ad-dependent, the space is still expanding. However, Twitch is one good example of a video game live-streaming to understand the economics in this space. A study mentions: “At first glance, Twitch, appears to be an exemplary platform for those who want to have a career ‘doing what they love’ (if that is playing video games), which brings with it the appeal of thousands or even millions of viewers, substantial income, and personality celebrity visibility within a rapidly-growing new form of media production.”
If one analyses the live-streaming space, it is evident that you’d notice the lack of or low interactiveness on these platforms. Platforms like Youtube, Facebook, Instagram do allow users to text/comment or respond through emoticons, they have limited interactive options where others can join the live-streaming. Recently, Instagram has added a feature to see permission to be part of the live-streaming. Apart from that, none of them seem to take “interactive element” as key to driving the live-streaming business.
That’s where platforms like Zoom or Agora come in. One-way live-streaming becomes a two-way thing, making it more inclusive and allowing users to add people. Not only do these platforms open up for brands, but it also helps celebrities, bloggers and every other person to interact with others. What this also means is absolutely no distraction from competitors or others, given the direct and uninterrupted live-streaming they offer. Additionally, platforms like Zoom have long-term implications on how companies or brands deliver their content in future.
However, concerns about content regulation via live-streaming remain. While pre-recorded content is usually vetted by platforms like Youtube or Google, live-streaming companies like Zoom or Agora have the challenge of being unable to filter the content that is streamed through their platform. Another challenge of making money from live-streaming still remains. While live-streaming does offer umpteen opportunities to creators and viewers to make and watch innovative, potentially compelling content, it is still uncertain how companies or individuals can sustain through on their own in the long term.
Well, finally, for live-streaming to survive, internet speeds must also rise to keep up with data-heavy demands of this space. Going by the trends, it is clear that the future of entertainment is interactive, live and community-driven where one can create any form of content and engage/interact with audiences. As inclusive as live-streaming can be, it will have several cultural, social and business implications in the future.
While China’s live-streaming industry has shown the world that this business can be lucrative, we will have to watch out for how the rest of the world will adapt to this trend ubiquitously. With the streaming industry estimated to reach $124.6 billion by 2025, it will be exciting to see how marketing and live-streaming grow together in the years ahead!
Reposted from aditya-gupta.co