Ex-Googler Turns Virtual Gifts Into a $61 Billion Business (bloomberg.com) 29
An anonymous reader quotes a report from Bloomberg: In China's popular online-streaming industry, virtual gift-giving is big. You can send your favorite live performer anything from a rose for 5 yuan (80 cents) to a space rocket for 500 yuan. The present is just a symbol, but the money is real -- and that's what's made Kuaishou Technology so successful. [...] Co-founders Su Hua and Cheng Yixiao will each be worth more than $5.5 billion, according to the Bloomberg Billionaires Index.
Su, a native of China's central Hunan province, studied computer programming at the prestigious Tsinghua University before joining Google in Beijing in 2006. There, he earned about $23,000 annually, eight times the country's average salary back then. While he said he was "extremely happy," a stay in Silicon Valley inspired him to start his own business, according to Kuaishou's biography. The 38-year-old quit Google during the global financial crisis to start his own video-advertising venture, which didn't come to fruition. After a short stint with Baidu Inc., he got acquainted with Cheng in 2011 and they soon decided to pair up. In 2013, the duo transformed the Kuaishou app from a GIF-maker to the social-video platform it is today, initially gaining popularity with its videos of life in rural China.
With the rise of ByteDance's Douyin, the Chinese twin app of TikTok, Kuaishou broadened its appeal, luring influencers backed by talent agencies and pop stars like Taiwan's Jay Chou. Along the way, it sped up monetization by creating ad slots and in-app stores for brands and merchants. While virtual gift purchases are still its bread and butter -- they make up almost two-thirds of its revenue -- the company is delving deeper into higher-margin businesses like e-commerce and online gaming. Its sales rose almost 50% to 40.7 billion yuan in the first nine months of last year, according to the IPO prospectus.
Su, a native of China's central Hunan province, studied computer programming at the prestigious Tsinghua University before joining Google in Beijing in 2006. There, he earned about $23,000 annually, eight times the country's average salary back then. While he said he was "extremely happy," a stay in Silicon Valley inspired him to start his own business, according to Kuaishou's biography. The 38-year-old quit Google during the global financial crisis to start his own video-advertising venture, which didn't come to fruition. After a short stint with Baidu Inc., he got acquainted with Cheng in 2011 and they soon decided to pair up. In 2013, the duo transformed the Kuaishou app from a GIF-maker to the social-video platform it is today, initially gaining popularity with its videos of life in rural China.
With the rise of ByteDance's Douyin, the Chinese twin app of TikTok, Kuaishou broadened its appeal, luring influencers backed by talent agencies and pop stars like Taiwan's Jay Chou. Along the way, it sped up monetization by creating ad slots and in-app stores for brands and merchants. While virtual gift purchases are still its bread and butter -- they make up almost two-thirds of its revenue -- the company is delving deeper into higher-margin businesses like e-commerce and online gaming. Its sales rose almost 50% to 40.7 billion yuan in the first nine months of last year, according to the IPO prospectus.
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Enabling? So there were no ways before? Like posting a comment to their youtube video or to twitter, or subscribing to their twitch stream, or anything else like that? Nope, but now we can "thank" them by giving somebody ELSE some money.
But no, I guess you seem to appreciate this, so I'm just gonna throw this out there...if you want to thank Su Hua and Cheng Yixiao for enabling you to thank your favorite content creators, feel free to send me 80 cents and I'll email them each a rose emoji (what a deal, too.
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The article above seems to fail to fully explain the system. The content creators are making income but it's not like a one-to-one conversion and I cannot easily find a good source to explain it. This source gives some hints though but wants you to subscribe:
https://technode.com/2018/11/0... [technode.com]
I believe they get bracketed, so they will get some % of profits from the sales of the virtual gifts but it's probably at best 10%. There are also other ways the users can make money but to say the least I am quite sure
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How? How can trading shiny pixels be worth that much?
Have you ever been to China?
Stupid neurotic online behavior is far worse than in America. If you take a train in an American city, half the passengers will be holding their cellphones in front of their noses. In China, it will be 95%.
Will the Chinese, on average, spend $61 each sending meaningless bit patterns to each other? Sure. That is a safe bet.
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Stupid neurotic online behavior is far worse than in America.
Yeap... but the idea that everything is sending $61 misses the statistics. What you have is some people who are young and from super wealthy families, blowing thousands. The same thing happens with CS:GO and skins. It's really absurd, how much money can get blown on what primarily amounts to vanity but at least with these virtual gifts, there is some income to the content producers.
The other aspect not fully discussed is the attention they get. Are you fat and ugly but want a hot girl's attention, just blow
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As I posted below there is some profit mechanism for content producers which is being largely ignored in this post. That's partly the lure.
The lure here is probably three prongs. Content producers do make a bit of money, audience members get the attention of hot girls or whom ever, and when combined with the other two it has a kind of gambling feedback -- small dopamine boosts.
There are lots of ways these mechanisms are exploited to further get you to buy these virtual gifts. There will be "versus" matches
Easy: (Score:2)
The entire business is "virtual"*.
_ _ _ _
* "virtual", here, is a new word for "fraud".
Re: (Score:1)
That, or he has legitimately sold multiple virtual gifts to every citizen in China.
Re: Just Wow... (Score:2)
Or the games industry charging you for a *picture of* a hat.
Or a *copy* of the result of some creative work.
Seriously, when do we stop this fraud scheme?
Re: Just Wow... (Score:3)
Re: I wonder if I could sell air as a special gift (Score:2)
No. Not air.
*Virtual* air!
Here's a free sample: [ ]
Want more? Makes $3.50 a pop!
$10.50 for Perri-Air (same content, differemt brand)!
No fair (Score:3)
I see (Score:2)
You want to LIKE this artist for only $99.95 ?
Brave Browser (Score:2)
Re: Brave Browser (Score:2)
Re: (Score:2)
While I agree, I do not like the dependency on Chromium which I hope one day will greatly diverge from it (including it's own plugin store). However, you don't seem to understand the nature of BAT which is to say, it is an economy of it's own and this nature reflects better all the potential ways blockchains can be embraced. With BTC or ETH, it is miners who are ultimately getting an "income" from being part of securing the chain. As a Brave user, you are getting paid BAT monthly as part of the economy and
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This does nothing to obviate the scamminess of Brave browser.
One entire league worse than glass beads. (Score:2)
At least glass beads were real.
But this here...
If you pay them money, you are dumber than a $400 Monster wooden volume knob "for extra warmth", and need to be committed to a mental hospital.
And if you 'sell" this shit, You Are Not A Business. You'a shitty street fraudster, blown up to massive organized crime. A Batman villain.
This should be flat out illegal.
pet rocks (Score:3)
This reminds me of Pet Rocks. https://www.bcbusiness.ca/9-du... [bcbusiness.ca]
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