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With their promise to empower, decentralized platforms quickly became havens for content creators. A group of Chinese entrepreneurs wants to participate in this action, building a startup in California from where they are bringing their technology to the world-and possibly return to China one day.
The company, Lino, was founded in mid-2017. Lino – the name derives from "livestream now" – uses blockchain technology to create a decentralized autonomous content economy. This means that each creator or user in the community becomes the owner of the part.
A decentralized approach to content sharing has power as a basic principle, putting individuals at the center, not corporations or monopolistic organizations, say its supporters. Decentralized platforms have also become a haven for content creators whose work is vulnerable to censorship or are exploited financially by giant centralized platforms.
Prior to Lino, CEO and co-founder Wei Jiequan was an avid investor in cryptography projects with a keen interest in the potential of blockchain technology. The idea for the company came to the co-founder, Chen Qifeng, during a trip to Uber to a blockchain at Stanford University. Driven by the idea of using the blockchain to build an ecosystem of content, the two immediately started brainstorming.
"Content creators have worked hard and created the maximum value for the platforms," said Wei. But often, centralized systems unjustly compensate content creators for their work, he noted.
"Looking at YouTube, Twitch and all other content platforms, the current problem is that they are monopolies in the market, and they are constantly increasing their cuts and increasing their profit margins," Wei said.
For example, the live video game streaming industry, although full of technology companies, is dominated by only a few. In the US market, there is the duopoly in charge of Amazon Twitch and YouTube. In China, there are a handful of dominant players, including YY & # 39; s Huya and Douyu backed by Tencent, as well as Panda TV, Penguin eSports and Longzhu.com.
In early 2018, Lino raised $ 20 million in an investment led by ZhenFund. The company continued and launched the testnet in August and launched its first app, a gaming platform called DLive, shortly thereafter in September.
Before migrating to the Lino network, DLive was one of the best decentralized applications (dapps) to run on Steem, an important content-focused blockchain that fuels the most popular applications, including Steemit.
The team decided to build a blockchain on their own because they did not find other public chains suitable for streaming content, the company said it wanted to build a sufficiently robust and sustainable platform.
Based on the SimilarWeb market analysis data, DLive has accumulated over 1.59 million visits in the 4 months following the launch. According to data provided by the company, as of January, DLive has collected over 740,000 monthly active users (MAU) and the Lino testnet has more than 196,000 registered portfolio addresses.
It is not easy to be a streamer
These powerful livestreaming services considerably eliminate the main source of tipped launchers, the term used to describe audience streamer donations, as well as advertisements, which makes it increasingly difficult for creators to earn money on livestreaming platforms.
On Twitch, it's a 50-50 division between platform and streamer. On YY and Huya, streakers get about 30% (in Chinese) of what they earn from streaming. A poll (in Chinese) of Tencent shows that in China only 5% of streamers earn more than 10,000 RMB ($ 1,500), while 70% earn less than 100 RMB ($ 15).
In addition, streamers often have to pay additional costs for multi-channel networks (MCNs) or agents.
The platforms pay exorbitant figures to the lucky few who manage to reach the summit, but not without conditions. Many host stars are connected to exclusive streaming offers to broadcast only a specific platform.
It has become a problem in the United States. Last year, reportedly, YouTube interrupted streamer accounts without previous warnings as a result of uploading videos that teased the next Twitch stream. In China, there have been cases where content creators have been sued by platforms for an unreasonable penalty for skipping the ship. More recently, a streamer on Douyu has been sued for an amount of RMB 150 million ($ 22 million) for streaming on other platforms.
Demonetization is also a big problem in the industry, Wei said. Contributors who do not adhere to the guidelines of the mega-platforms, both written and unwritten, could be "demonetized", in other words considered hostile to advertisers. Some streamers have been demonetized by YouTube for streaming on DLive, said Wei. DLive has streamers that also broadcast Twitch, Mixer and YouTube.
The company said that DLive is trying to hire Twitch but not burning money to grab the best streamer as others are doing. Lino wants to change this profit-oriented relationship, which he said is driving a wedge between content creators and providers of streaming platforms.
New era, new business model
Unlike major platforms such as YouTube or Twitch, DLive does not take revenues or commissions from creators and all users can interact with each other directly without going through an intermediary.
Although blockchain, the system of incentives and voting is managed in a more transparent way. Users can track detailed information such as how much has been tipped, by whom and how the transfer was made. Community members, streamers and the public have the power to vote and participate in governance.
Wei explains that the company model is based on the token economy, a popular concept adopted by many blockchain projects in which tokens are used to motivate members to contribute and behave for the benefit of the community.
For Lino, the system is designed to incentivize its contributors, not only those who create content, but also those that help to treat it and develop the infrastructure. The whole mechanism is non-profit that does not serve the interests of a single company, added Wei.
Wei said the market potential in his native China, the company is very open to the idea of exploring opportunities there.
According to a relationship of Deloitte Global, the livestreaming industry was expected to generate over $ 545 billion in revenue globally in 2018. With an expected turnover of $ 4.4 billion, China is likely to remain the largest market for streaming live. The game is one of the most popular live streaming categories in China. Liu Jiehao, an analyst at iiMedia, told TechNode that nearly 90% of top-level hosts broadcast gaming-like content.
But as a young startup, Wei said that Lino has limited capital and resources that he has chosen to tackle first the markets in the United States and Europe, the Middle East and parts of Asia. The company said that Turkey is one of the countries in which DLive technology is growing strongly and is witnessing a tremendous growth. Turkey has not only a predominantly young and technology-based population, but it is also a blockchain-friendly market.
There is also the problem of intense competition and close control of blockchain and entertainment content by the authorities at home. Over the past year, the government has conducted periodic cleaning campaigns on livestreaming and gaming content, which have affected the revenue of even the largest companies such as Tencent Games. The increasingly strict blockchain regulatory environment of the country is creating even more barriers for young blockchain startups.
Global technology giants such as the search giant Google and the game publisher Tencent Games have both invested heavily in the live video game streaming platforms in China.
Blockchain companies are likely to encounter more barriers in China than in other countries. Liu said the analyst, in fact, the decentralized model could create more difficulties for the government to regulate online content, so its development still faces a certain level of risk in China.
For Wei, the monopolistic practices in the world of video game streaming are more widespread in Western countries, at least compared to China. And it is here that he and Lino's team see the greatest opportunity.
"We are assuming monopolies in the market, obviously it will be very challenging," said Wei. "I think something revolutionary like this has a good blow."
