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China Live Streaming Sector to Overtake Movie Box-Office Receipt in a Few Years

| Apr 13, 2017 11:46 PM EDT

Screengrab from a controversial Chinese live streaming footage showing a woman eating a banana "erotically."

The live streaming sector in China continues to thrive. At the rate it is growing, experts forecast the sector would top the movie box-office receipts in a few years.

China Renaissance Securities, an investment bank, estimated the annual revenue from live streaming would be more than three times the current $4.3 billion, or 30 billion yuan, in 2016, Reuters reported. The amount is not far from the forecast made in September by Credit Suisse Group analysts that the sector would be worth $5 billion by the end of 2017.

Tech Giants’ Investment

The sector thrived over the last three years when live streaming started to be noticed by Chinese netizens. The growth was partly the result of investments made by the technology giants in China such as Tencent Holdings, Baidu and Alibaba Group Holding.

In early 2016, Taobao, owned by Alibaba, launched a live-streaming platform where vendors could promote their products directly in real time to consumers. Tencent, the largest online and social networking company in China, supported interactive entertainment and streaming companies.

Only Gateway for Lower-Tier Cities

There are around 150 live-streaming platforms in China, the majority of which produce entertainment shows. While China has around 344 million internet users, it is in lower-tier cities where live streaming’s value is most felt because the mobile phone is often the only gateway of residents to entertainment and shopping, Karen Chan, Jefferies Hong Kong equities analyst, said.

A survey in December conducted by AdMaster found that 37 percent of marketers and media agency professionals in China plan to invest in several live-streaming platforms. It would form part of their content marketing strategy for 2017, emarketer reported.

The bulk of live video watchers are young Chinese. Data from iResearch Consulting Group from a December 2016 report said that 76.5 percent of mobile live-streaming app users in the country are people below 36 years old.

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