China is introducing tighter regulations for livestreaming
Age restrictions, tipping restrictions, and more.
The National Radio and Television Administration in China has introduced new regulations for the livestreaming industry. Now, gift-givers and hosts will need to provide their real names. Furthermore, new regulations ban teenagers from making purchases. So the users will buy virtual goods only using their real names, and there will be a cap on tipping.
The ban comes as a result of the numerous complaints about behavior during some of the programs, misleading advertisement, falsely presenting viewership data, and the inclusion of pornographic content.
Regulators have also recommended that livestreaming platforms and companies invest more in content moderators and their training. That way, they will have more control over what has been broadcasted and whether that is in-line with the new regulations. Employers that screen content and act as content moderators will need to register with regulators.
Regulators plan to make a list of hosts that consistently break their rules and ban them from livestreaming on all platforms.
The livestreaming industry consists of entertainment, gaming, and e-commerce activities, whose popularity exploded in China during the coronavirus pandemic. During this period, livestreaming has grown into a multi-billion industry.
The new regulations are introduced ahead of the IPO of one of the most popular streaming apps in China – Kuaishou Technology. The company’s primary revenue source is from viewers who purchase virtual goods to show their support and appreciation to the livestreaming hosts.
In the first half of 2020, the company managed to earn $2.64 billion using that business model – selling virtual goods. For Kuaishou, that’s 68.5% of their overall revenue.
Aware of the negative impact of the new regulations, Kuaishou warned its investors of the consequences and how they will reflect on the short video, livestreaming e-commerce industry, and their platform. Earlier this fall, in September, Kuaishou aimed at a $5 billion IPO. Financial experts and analysts believe that considering the latest development, people at Kuaishou will need to lower their expectations for IPO.
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