Written by: Gian Nathaniel and Nathaya Athira P. W.
Designed by: Alyssa Tania
Online live streaming—the broadcasting of a real-time, live video to an audience over the internet—is growing fast in the entertainment industry. Streamers (the people who create live streaming content) usually record and publish what they do in real time and interact with viewers (also known as the Chat) through text or voice communication.
These content can vary from gaming content (which is the most common) to conversational and educational content such as digital art teaching. While the content itself is usually free, viewers who are impressed or wanted to give thanks to the streamer can leave a donation from as little as $1 to a whole $1,000,000. This is the attractive part of the live streaming business model.
The live streaming market is growing fast in two main platforms, Twitch and YouTube. In Twitch, each streamers can make hundreds of thousand USD each month from donations. Top five Twitch earners made as much as 1.5 million USD each in the last year. Similarly, top donation (called “Superchat” in YouTube) earners made at minimum 700,000 USD from Superchat alone. This is excluding the advertising revenue from over 20 million hours watched for each streamer in a year.
So, how can firms make the most of this new, growing industry? Firms have been trying to get in the online entertainment industry for years with mixed success, how can this be any different? Well, we know for a fact that two corporations have made an astounding success in employing streamers.
In YouTube, Hololive Production and Nijisanji create a live streaming business model centered around Japanese anime culture. They employ live streamers as part of a “talent agency” and deduct a percentage of a streamer’s earnings in exchange for technical support, advertising, and capital support for grand projects.
Their success is reflected in the fact that 10 out of 15 top superchat earners come from either one of those two companies. Millions of USD are made by allowing international audiences to watch and give superchat in their own local currency (brokered by YouTube). In fact, these companies are so successful that dozens of new agency companies tried to follow suit (even AirAsia!).
The live streaming industry can be a new strategy for digital entertainment companies. Instead of focusing on short YouTube videos or series, they can invest in several talented individuals who can catch the viewer’s interest.
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