BEIJING: An industry that accompanied the proliferation of the smartphone in China, live streaming, is seeing a decline in online viewership after two years of explosive and potentially unsustainable growth.

With over 100 different streaming platforms, revenues surged in the last two years from 7.4 billion yuan (US$1.1bn) to 20.8 billion yuan last year, according to iResearch figures reported by the South China Morning Post. This year, the same company forecasts the industry to surge to 43.2 billion yuan.

Mobile engagement in China is crucial, where the phone is the dominant channel through which consumers reach the internet. The ubiquity of the device for both producers and consumers of live-streamed content is fundamental to the growth of the industry. The number of viewers from mobile is declining, the research company said.

In a short time, the live streaming industry has created a type of internet beauty culture, built around the constant projection of the image of wang hong, (‘internet celebrities’). The New Yorker’s Jiayang Fan chronicled the rise of the Meitu selfie-retouching app as an important vehicle for many.

The industry’s youth has meant little regulation until this year. Li Chun, founder and CEO of Gathering Stars, a management agency for streaming celebrities, told the Post that streamers “could build up a fan base very quickly by doing something provocative. There were certainly some companies betting on a quick success that allowed that to happen.”

In July, the Chinese government asked three live streaming services operated by Weibo, Phoenix New Media, and AcFun to cease live streaming operations citing a lack of licence and posting of “content in violation of government regulations,” TechCrunch reported.

Though authenticity and individualism are part of the medium’s currency, as time goes on and the money keeps rolling, the biggest streamers are being institutionalised, brought under the aegis of agencies that connect streamers to brands.

Prior to that, many streamers made do with voluntary donations from fans, as Fan observed, but now platforms such as Weibo have started working with dedicated agencies to manage content and presenters. The platform’s head of gaming content Han Lin said that an allegiance with an agency can help smaller streamers to perfect their content. It has also helped to increase the platform’s views.

Cyril Drouin, chief e-commerce officer for Greater China at Publicis Communications explained, “It’s the live streamers the brands are looking for, except for those that are exclusive to a platform.”

Still, only those streamers with the strongest followings make it to the top. This has meant increased costs for some platforms that have taken on expensive talent as presenters. The brand demand for this cohort has given them far greater leverage over platforms than they have ever had before. YY, one such platform, saw its operating costs rise by 30% this year.

The issue for the industry will be whether the variety of different platforms in use can be sustained, or whether larger players will begin to swallow up the majority of the cash and, therefore, the majority of the stars.

Sourced from South China Morning Post, New Yorker, TechCrunch; additional content by WARC staff