Chinese online platforms remove live streaming features amid gambling crackdown
Removing popular features like virtual lucky draws will impact the lucrative live-streaming market, valued at $21 billion in 2022.
Chinese online content platforms, including Tencent Music and NetEase’s Cloud Music, have removed live streaming features that could potentially facilitate illegal gambling following a government crackdown on online gambling. The crackdown targeted features like virtual lucky draws, which were popular but could be manipulated by streamers and viewers colluding to share prizes.
These platforms experienced a decline in social entertainment revenues due to these changes. The regulatory measures impacted the live-streaming market, valued at approximately $21 billion in 2022. Experts predict that the crackdown could reduce live streaming revenue by 20% to 70%, with the effects fully absorbed over a few quarters.
Platforms like Tencent Music, Huya, and Cloud Music reported adjustments to their business models and internal controls in response to the regulatory changes. Despite the regulatory crackdown on the technology sector, authorities are still focused on rectifying activities to align with socialist norms, with online gambling remaining a concern due to its potential national security risks.
Why does it matter?
The removal of live streaming features from Chinese online content platforms represents the complex dynamic between complying with regulatory measures and maintaining profitability. However, this regulatory action should be understood within the larger context of China’s continuous attempts to control its technology sector and align it with socialist principles. The fact that the platforms did not disclose the regulatory crackdown in their earnings reports can indicate their awareness of the boundaries and sensitivities they must navigate.