Interactive broadcasting, also known as live streaming, has been sweeping across China and part of Asia recently. Led by Chinese-based WeChat and copied by other chat apps such as Facebook-owned WhatsApp, interactive broadcasting is on fire in Asia and now spreading globally.
We’re all familiar with personal live streaming through services such as Facebook Live, Twitter-owned Periscope, Snapchat, Instagram Stories and others; the emergence of easy live streaming from any smartphone with a camera and a data connection has been hyped in the U.S. and elsewhere for almost two years. Chinese firms have figured out how to make money from the new technology and drive adoption, however.
A recent article by Connie Chan on the Andreessen Horowitz blog, A16z, noted that the market for interactive broadcasting has been growing rapidly the past year, and it laid out some tips for global app makers on what they can learn from this trend.
Roughly 46 percent of China’s internet population used a live streaming app in June, and Credit Suisse has estimated that the personal live streaming market in China will reach $5 billion next year, just $2 billion less than the market for movies in China and half the size of China’s lucrative mobile gaming market, Chan noted in the blog. Huachuang Securities forecasts that live streaming will be a $15.9 billion market by 2020.
Interactive Broadcasting isn’t something brand new. From YY, where our founder Tony Zhao served as the platform’s former CTO, to Twitter’s Periscope and Snapchat, interactive broadcasting is a trend that’s emerged from PC-based video technology and is now just picking up steam as a result of the explosion in video-equipped smartphones.
Here’s what we can learn from this trend.
Interactive Broadcasting is Booming Both for Embedded Communications and Standalone Apps
While some standalone interactive broadcasting apps such as China’s Inkd, Huajiao and Douyu are seeing their usage surging, existing social platforms also are baking interactive broadcasting features into their apps and finding success.
Chinese dating app, Momo, added interactive broadcasting functionality last year as a safe way for singles to break the ice and prove that user profile photos were real. The feature has been a huge success, and the company estimates that interactive broadcasting contributed $15.6 million to its first-quarter revenue this year.
Interactive broadcasting helps social platforms like Momo take engagement to the next level for users already on the company’s platform. The logic behind such product innovation is very similar to the reason Twitter acquired Periscope, but Chinese social platforms have built the feature in-house or invested in startups. A great example here is Sina Weibo, known as the Chinese Twitter, invested in livestreaming app YiZhibo and directs Weibo users to the app.
For vertical markets like e-commerce, brands are playing off celebrity and using unscripted live streaming effectively, too. Alibaba, the Chinese equivalent of eBay, launched a dedicated live streaming app where buyers can watch sellers describe their merchandise much like a user-driven version of QVC’s Home Shopping Network. Maybelline sold 10,000 lipsticks in two hours by hosting a live stream event where a Chinese celebrity, Angelababy, tried on various beauty products by the company. Beijing-based online produce delivery service, JD Fresh, broadcast a live lobster-cooking competition during a national Chinese holiday and captured both attention and increased sales.
All of this is because video is a great way to sell things. Global brands are already paying attention to interactive broadcasting platforms as new channels for promoting products.
Interactivity Lowers Production Investment
One critical issue that interactive broadcasting apps all look to solve is the need for a steady supply of content. Without finding a way to ensure content, a sharp drop in app open rates is the natural outcome.
China interactive broadcasting apps have cracked this problem: Engaging users to create content.
In Asian and Chinese markets, personal livestreaming is no longer only for celebrities. Although interactive broadcasting had been around in China and the US for more than a decade, it has now been reframed as essentially a video chatroom where strangers gather to watch and chat with a broadcaster.
This shift from a brand creating interactive broadcasting content to users creating content has come with a shift in thinking about production values. Whereas brands would carefully plan video productions and rehearse in the days of brand-created content, user-created content works best if production values are lower and more emphasis is placed on spontaneity and audience engagement. Broadcasters, whether a celebrity or an amateur entertainer, respond to viewer requests and give answers. With such a focus on viewer interaction, broadcasters rarely need to pre-plan their content, which lower the bar for broadcasting.
Add-ons Opens Up Further Monetization
Add-ons including makeup filters and emoji stickers help make it easier for broadcasters to open up their apps to users. With beautification filters, broadcasters can bypass the need for makeup and things like pro-grade lighting for talent, which is important since talent is the viewer. Emoji stickers both lower the bar for text interaction and provide a payment system in-app.
The Chinese has been particularly good about using stickers for monetization, effectively creating a gift system for interactive broadcasting. Livestream audience members can get the attention of a broadcaster by purchasing filters and virtual stickers for anywhere from a few dollars to $30 or more. Livestreaming app developers (or the social platform) and broadcasters split the purchase value.
This sticker gift system, in effect, enables a pay-to-play model where audience members can make a request to a performer or get their attention by giving the broadcaster a small monetary gift.
This monetization of personal live streaming makes broadcasts lucrative both for broadcasters and the app developers, with some popular amateur broadcasters quitting their day jobs to go full-time with personal livestreaming in China. Chinese interactive broadcasting website, YY, relied on advertising for only 1.1 percent of its revenue last year. This monetization model also helps define which audience members get attention during a live broadcast.
Interactive Broadcasting as Global Trend
There is real interactive broadcasting innovation happening in Asia right now, with both developers and brands capturing an early lead by experimenting and learning from the leaders before the trend fully expands into Western markets.
Over 150 live streaming apps have been launched in China in the past year. Easy plug-in solutions such as Agora.io’s Interactive Broadcasting solution are available both in Asia and globally to lower the bar of developing such apps.
You literally can go from demo to shipped product in 30 minutes using our hosted real-time communications service. Stable and across the globe, with advanced optimization technology and more than 80 global data centers for real-time traffic adjustments, Agora.io is ideally placed both for this trend and to help your business get a piece of the action.