(Yicai Global) May 24 -- The most popular internet live streaming platform in the US originates in China surprisingly. However, they face a number of challenges in their bid to expand market share and change audience attitudes towards what is essentially a Chinese invention. Popular streaming app LiveMe is a case in point.

LiveMe ranked top in GooglePlay's US top-selling social app chart for the second consecutive year and secured the sixth spot in its US revenue rankings last September, showed data from market intelligence firm App Annie,  

The platform did not disclose its active user number, but said it had 60 million global users in the past two years.

After calling it a day at the smoothie shop, Amber Tiana, wearing hip-hop style dreadlocks, sat on a couch, using her mobile phone to log on to LiveMe. She talked about what happened to her during the day in front of the phone camera and greeted the new audiences with some occasional humming.

Soon, a host of small gifts "dropped" onto the screen, among which a heart-shaped accessory automatically found itself on her head. There was a much more expensive gift on the platform, known as the golden castle priced at 88,888 gold coins, which the user had to top up to over USD900 to give it as a present.

This 27-year-old network anchor live stream music, films, or talk shows for 510,000 fans on a weekly basis. She could earn an income ranging from USD800 to USD1,200 during her live broadcast, which lasts for about 10 to 16 hours in total every month.

What Amber Tiana has experienced mirrors the US internet live streaming industry. Compared with the boom in China, it is still in the early stage of growth in the US.

Overseas Markets

Back in 2015, the development team of LiveMe decided to make the platform available in overseas market to avoid the competition with the likes of Inke Ltd.'s Inke, Douyu run by Wuhan Douyu Network Technology Co., and Huajiao operated by Beijing Mijing Hefeng Technology Co., rapidly growing internet live streaming apps in China.

At that time, Yuki, senior vice president of Cheetah Mobile Inc. and chief executive officer of LiveMe, was also in charge of Clean Master, the first software developed by Cheetah, which found its way into international markets. Having noticed the opportunities brought by internet live streaming, she led a dozen of persons to embark on a new start-up in Cheetah.

At the US market back then, Facebook Inc. has not put online an internet streaming feature. Twitter Inc. has rolled out an internet live streaming App called Periscope with no support for virtual gifts, while Twitch, a gaming live-broadcasting platform, bore some resemblance to a network anchor in China and had nothing to do with the ecology of internet celebrity.

Under such circumstances, LiveMe followed a show format in China, in which a network anchor showed his/her talents on the platform and then cashed in on virtual gifts from the users. Such a form not only bridged a direct connection between the network anchor and the audiences, but also shaped a closed loop business for LiveMe.

Challenges

At the beginning, there was not a business system for internet celebrities in the US. To attract followers, LiveMe signed agreements with some popular Youtubers and then developed popularity through them. Famous Youtuber Roman Atwood often takes interesting challenges with his friends on LiveMe, like letting friends ride on his handmade raft and cross the pond in several seconds, which brought considerable followers to LiveMe.

However, unexpected problems also came out. Bad behaviors like spamming and verbal attack seriously affected the stability of live broadcasting. Eventually, LiveMe had to send staff to the US to solve internet anchors' problems in real time and established a localization team consisting of dozens of members in Los Angeles.

Besides, LiveMe also attracts internet celebrities through local events like VidCon in the US. Apart from live broadcasting, LiveMe has begun to try models like player-killing in live streaming rooms, and also started to try game streaming and short videos.

Nevertheless, though the show room model has been quite popular in China's live streaming market, it still cost the company a fortune to make American users adapt to the reward model. Yuki gave an example, telling that at the beginning, the US users had no idea about virtual gifts. She was blacklisted by a user unexpectedly after sending virtual gifts to her or him. After a customer service representative told the user that the virtual gifts can be exchanged for money, the representative was blocked too.

After the preparation of three to four months and developing the first batch of seed users, LiveMe stepped into the right direction in the summer of 2016, and obtained USD60 million funds in A round of financing from Matrix Partners China, IDG Capital, Gobi Partners, and Cheetah Mobile in May last year, and pooled USD50 million in B round of funding from Toutiao last November.

As the user number surged, LiveMe gradually developed a batch of live streaming internet celebrities rising from the platform, with Lean Green as one of the representatives, who has 290,000 followers on LiveMe.

When asked about her idea on the nouveau-riche-like reward model on China's live streaming platforms by Yicai Global, she said, if live streaming is only for money, anchors will be regarded as greedy and selfish. In her opinion, anchors also need to give followers something back. For instance, if a user sends her gifts worth USD8,000, she will also give a gift of over USD3,000 in return.

Nevertheless, some rich American users are also extremely generous in rewarding. A user named Syed serves as a doctor, who told Yicai Global that he has spent USD120,000 on virtual gifts over two months. During his leisure, he is fond of watching talent shows and cooking shows on live streaming platforms.

Generating Income

Apart from receiving gifts and gaining shares from internet live streaming platforms, network anchors also profit from advertisement placements and e-commerce links in their live shows. For example, "PrincessUK," an on-line user and a single mother, said that she has begun to broadcast advertisements on LiveMe to stimulate consumption and claimed that she had earned USD10,000 during the past two months.

Amber Tiana, now an internet celebrity, has also made profit indirectly through live streaming for a long time. Given that LiveMe allows its VIP users to establish links to external networks, she chose to establish such a link with her commodity websites to sell famous brand T-shirts, iPhone-related products, pillows and cups. She sometimes diverted the link to her Instagram account so that she could develop followers and realize new brand transactions.

However, overall, the business format of internet live streaming is still at an initial stage in the US Compared with the well-developed collective model in China, network anchors in the US, a country upholding the spirit of individualism, prefer to "fight alone."

But US brokerage firms are now learning from China's collective solidarity model by adopting its network anchor training methods, conducting several screenings and selections every month and training selected anchors before allowing them to start live streaming. Anchors who show excellent performance during the training will find favor with the platform, Beryl, founder of Novaland media and film production, told Yicai Global.

However, a relatively big challenge now is the lack of education in this market in the US, as well as insufficient development of the whole industry, Yuki said. "China has built up the ecology of live streaming with many brokerage and content companies centering on online live streaming, whereas the US has not. Therefore, one of LiveMe's focuses this year is ecology construction."

Editor: Mevlut Katik