The rumor that Douyu CEO Chen Shaojie was arrested has been confirmed. On the evening of November 21, Douyu announced that Chen Shaojie, the CEO and Chairman of the Board of Directors of the company, was arrested by Chengdu police on November 16, 2023. Sources have stated that Chen Shaojie was arrested or related to gambling.
Along with the above news, there are also Douyu's flawed content ecosystem governance system, the difficult to conceal user churn situation, and fierce short video competitors that have emerged. How far can a fighting fish swim after being hit by both inside and outside?
Arrested or related to gambling cases involving platform anchors
Chen Shaojie's last appearance in public was during a conference call on Douyu's second quarter financial report in August this year.
As for the reason for Chen Shaojie's arrest, a source close to Douyu said that Chen Shaojie's being taken away by the Chengdu police might be related to gambling. Previously, the "Outdoor First Brother" of the Douyu platform was tried by the Dujiangyan Irrigation Project court for opening an online casino.
In 2022, the court of Dujiangyan Irrigation Project City, Sichuan Province, heard the case of using the live broadcast platform to open a casino. The defendants were Fu XX, Pan XX and others from the "Send Nine Outdoors" combination of the fighting platform. After investigation, it was found that from March 2017 to September 2020, Fu and Pan used the lottery module of the Douyu platform "Fan Welfare Society" to set the amount and number of prizes for the lottery in advance, and organized "Water Friends" to participate in the lottery.
During the live broadcast, Fu and Pan continuously promoted the concept of "one card application for 50000 yuan to take home" and "Bo Yibo bike to motorcycle", and pushed information such as the lottery time and amount to other people who did not participate in the live broadcast viewing through Douyu platform and WeChat group, inciting a large number of people to enter the live broadcast room to "apply for cards" to participate in the lottery during the live broadcast lottery period. After the completion of the lottery, Mr. Zhou is responsible for verifying the information and amount of the winners, obtaining their Alipay account number, WeChat account number, bank card account number and other information, and then distributing the winning cash to the winners. By the time they were captured, a total of over 4200 lucky draws were organized, with over 4.42 million people participating, ultimately attracting nearly 120 million yuan.
Not only is the "Sending Nine Outdoor" company caught up in the gambling scandal, but the Douyu "Changsha Rural Death Squad" live broadcast room has also been exposed to use platform lottery rules for suspected gambling activities, and its rules are similar to the gameplay rules set by "339". Users purchase designated items in the live broadcast room to participate in the virtual currency lottery, Subsequently, the "Changsha Rural Expendable Team" purchased virtual currency in equal amounts through third-party channels to exchange for bonuses and cash back to users. Due to the lottery time set for the live broadcast room starting at 10pm, it is referred to as the "10pm Economics Class" in the live broadcast room.
It is worth noting that after the ban on the "Send Nine Outdoor" live broadcast room, Douyu once stated to the public that the behavior related to the "Send Nine Outdoor" live broadcast room is not gambling, but a prize sales behavior in the commercial field. According to the Anti Unfair Competition Law, as long as the bonus amount does not exceed 50000, it is neither illegal nor illegal.
The ambiguous attitude of Douyu platform towards similar gambling platforms may be closely related to its intertwined interests. According to Tianyancha, the live streaming guilds behind "Sending Nine Outdoor" and "Changsha Rural Daredevil Team" are Chengdu Jiutu Cultural Media Co., Ltd. and Hunan Yuxiaomaru Network Technology Co., Ltd. Both companies have received investment from Douyu. The former was invested by Wuhan Douyu Network Technology Co., Ltd., while the latter was invested by Douyu subsidiary Wuhan Douyu Le Network Technology Co., Ltd.
Lawyer Liu Anbang from Deheng Law Firm once stated in an interview with Nandu reporters that it is necessary to look at the situation. If the live streaming platform is aware of its criminal behavior and intentionally indulges or secretly supports it, then the live streaming platform and corresponding responsible personnel are suspected of aiding in the establishment of a casino; If the live streaming platform is unaware of its criminal behavior but fails to fulfill its regulatory obligations, the corresponding department shall punish the live streaming platform; If the live streaming platform is unaware of its criminal behavior and has fulfilled its regulatory obligations, then the live streaming platform does not assume responsibility, but should improve its regulatory obligations to prevent similar situations from occurring.
Industry insiders have revealed that generally speaking, due to performance gambling with live streaming platforms, anchors often need to stimulate fans through rewards or gambling to achieve high flowing performance goals. During this process, live streaming platforms often "turn a blind eye" and even teach them relevant scripts to avoid risks for both anchors and platforms.
The compliance standard of "actively loosening ties" has been repeatedly named by regulatory authorities
For Douyu, 2023 can be said to be a tumultuous year. Apart from gambling scandals, pornography and vulgarity have always been obstacles to the compliance of Douyu live streaming content.
In February this year, Netcom released news that Kwai, Bilibili, Zanthoxylum bungeanum, Douyu, Tiger Teeth and other platforms were interviewed by relevant departments, rectified within a time limit, severely dealt with the relevant responsible person, fined and imposed other penalties due to "the problem of spreading harmful and bad information such as pornographic diversion, vulgarity, violent abuse, inducement and reward".
It is worth noting that in March, the topic of "Douyu Official Push Soft Pornographic Performance" hit the hot search, and netizens found that the Douyu Show live broadcast was filled with a large amount of pornographic, vulgar and large-scale content; At the same time, there are also screenshots circulating on the internet of the "Douyu Scale Deduction Rules", which are seen as Douyu actively "loosening the tie" for live streaming, and broadcasters who violate the rules can also benefit, no longer affecting their income.
In April, the Douyu was named again. In the first quarter of the "Clear Action" inventory released by the National Cyberspace Administration, Douyu failed to fulfill its main responsibility and failed to manage the information posted by its users, causing harmful information such as obscene pornography, feudal superstition, prostitution, gambling diversion, and high interest lending to spread online. It was punished again and became the only live streaming company that was named in both inventory counts.
In May of this year, the National Internet Information Office guided the Hubei Provincial Internet Information Office to dispatch a working group to the Douyu Platform for a one month centralized rectification supervision. It is worth noting that there were media reports that on the evening of May 8th, on the official announcement of the entry of the Cyberspace Office, some female anchors in the beauty zone on the Douyu platform were exposed in their attire.
In stark contrast to the above situation, at the Douyu Q2 financial report meeting, Chen Shaojie stated that in the second quarter of 2023, Douyu will continue to build a healthy and sustainable gaming community ecosystem, attach importance to the operation of core users, create more interactive high-quality content, promote community interaction, and improve user experience. In the future, Douyu will continue to implement the development strategy of "a diversified content ecosystem platform centered on games", committed to the production of high-quality content and innovation of product models, while exploring new growth points. Through stable business development, Douyu will continue to consolidate the company's comprehensive competitiveness and leading position in the domestic game content industry.
According to Tianyancha, between 2017 and 2021, the company had a total of 15 historical administrative penalty records, with a total penalty amount of 80000 yuan. From 2019 to 2022, Wuhan Douyu Network Technology Co., Ltd. had 4 administrative penalty records, with a total penalty amount of 85000 yuan. Among them, in September 2022, the Wuhan Municipal Bureau of Culture and Tourism fined 30000 yuan due to the violation of vulgar performance methods in three live broadcast rooms during the live broadcast process.
Can the Douyu, with its market value shrinking by nearly 10 times due to internal and external troubles, still swim?
The difficulties in content compliance, coupled with the peak growth in the game live streaming industry, have also led to a significant decline in Douyu's performance.
According to financial report data, since the first quarter of 2022, the revenue of Douyu has shown a year-on-year decline trend for six consecutive quarters, which are 16.6%, 21.6%, 23.4%, 27.9%, 17.4%, and 24.1%, respectively. In terms of core users and paid users, Douyu's monthly active users in the second quarter of 2023 were 50.3 million, down from 55.7 million in the same period last year, a decrease of 5 million; Douyu's core paid users in the second quarter of 2023 were 4 million, compared to 7.3 million at the end of 2021, and paid users have halved.
On October 25th, Douyu announced that due to the past 30 consecutive working days, the closing price of Douyu's American Depositary Stock (ADS) was below the minimum buying price of $1. If the company's stock price does not return above $1 by April 22, 2024, it may face delisting.
Previously, in early 2021, the stock price of Douyu reached a peak of $20.54 per share, with a market value approaching $6.5 billion; As of the close on November 20th, Douyu's stock price was at $0.962, with a total market value of only $308 million. Now, compared to its peak, its market value has shrunk by nearly 20 times. In July 2019, the issuance price of Douyu was $11.5, with a market value of $3.73 billion and a nearly tenfold decrease in market value.
While fighting for the founder's arrest, content compliance, user churn and many other challenges, how to resist the impact of short video platforms such as Tiktok and Kwai has also become a problem that fighting for the founder has to think about.
Under a constant total user duration, the ceiling of the total number of users has been reached, "said game analyst Zhang Shule. In the pan entertainment field, short video live streaming has cut a large number of user activity in streaming media, including long videos, music, and vertical short video live streaming platforms, thereby causing revenue difficulties for related platforms, There is nothing absolutely exclusive about game live streaming content. The richness of content on vertical platforms cannot compete with pan entertainment platforms
Some senior practitioners have also stated that the user scale of the domestic game live streaming industry is basically at its peak, and future growth may come from game live streaming on short video platforms, as it is mainly based on buying volume, which is different from the existing game live streaming mode. The biggest impact of short videos on live streaming platforms is still the buying volume of game live streaming. The competitiveness of this business is related to the platform's own advertising capabilities, advertiser resources, and user coverage, making it difficult for live streaming platforms to resist.
According to the White Paper on China's Game Live Industry in 2022 released by TalkingData, pan video platforms have risen, one-stop comprehensive entertainment platforms have become popular, and Tiktok has become the preferred destination for many users to migrate. At the same time, game anchors are also constantly migrating to video platforms. In June 2022, the number of game talent anchors on the Tiktok platform will increase by 25% compared with the same period last year.
According to incomplete statistics, the top anchors of the Douyu game sector are constantly losing, accelerating their gathering on short video platforms. In August this year, the head anchor "Xuxu Baobao" of the "Dungeons and Warriors" section, which was taken by Chen Shaojie to ring the bell, was transferred to the Tiktok platform; In January this year, Sao Bai, the anchor of the "King Glory" section of the fighting fish, has also been transferred to Kwai live broadcast; In addition, SKY Li Xiaofeng, Leng Yanhua and other front-line game anchors have also moved to the Tiktok platform, and the "head anchor" of the fighting is getting less and less.
The most effective way in the future may still be to go overseas and seek incremental growth from emerging markets, "said the senior practitioners mentioned above. The competition for live gaming should not only stand from the perspective of content to compete for user attention, but also from the perspective of monetization to think about how to shape a diversified business model. The game live streaming platform should strengthen its service capabilities for effective advertising as soon as possible, and make efforts in buying live streaming. There is still an opportunity to grab some market share from short video platforms, as the current growth situation in this segmented market is still good.
Production: Nanduwan Finance Society · Science and Technology Innovation Studio