The Business Model of Live Streaming Entertainment Services in China and Associated Challenges for Key Stakeholders

Live streaming entertainment services are a relatively recent phenomenon with an increasing market share. YY Live, which is a leading live streaming entertainment service provider in China, launched at $11.32 USD on Nasdaq in 2013 and is currently valued at $106.25 USD (as of 24th May 2018). In contrast to other popular social media platforms in the Western world, such as Facebook Live and Amazon Twitch, which rely on advertising revenue, the live streaming broadcast industry in China bases its business model on viewers buying virtual gifts. This business model has been accepted on Wall Street; thus, its success deserves further academic attention. This paper aims to reveal this industry's business model and explore the reasons for the widespread success of these streaming services. This study conducts interviews with officers from YY Live and performs a content analysis of news reports. The discussion demonstrates several challenges of current YY Live business models, especially the partnership between the host and host union and the psychological impact of the gift-giving model.