斗鱼直播商业模型分析(英文硕士论文)

Global Development Institute

Course Title:eBusiness:Organisation and Strategy Course Code:MGDI60352

Lecturer:Dr Ping Gao

Date Due:1-May-2017

Assignment Title:Business model analysis of online live streaming industry in China:a case study of Douyu live Student ID:928

Word Count:33771.Introduction

Video of the game is rigid demand for many individuals.In the past,customers would buy CDs to satisfy needs.With the development of information technology,the way of information transmission has changed to use network.In the situation,Twitch, which is the representative of the game-streaming site,has raised up.After that,E-sports online live streaming platforms have been attracting more and more attention. In China,online live streaming platforms has also been developed rapidly in recent years.Especially since2014,numerous of online live streaming platforms have emerged,and most of them focus on E-sports online live streaming at beginning. Douyu live is a model of them.In2015,Douyu live was awarded the Prize for Best Business Growth Capacity by Internet Society of China(IMCC,2017).At present, Douyu live has become one of the most famous online live streaming platforms in China.There are large number of anchors working for the company.It is significant to explore the success of Douyu live.

Meanwhile,from an academic viewpoint,business model is closely connected with how a company does business and acquires revenue(Porter,2001).Analysing the business model could help persons understand a company more deeply.However, there are limited researching about online live streaming platforms in China. Therefore,the essay will achieve two objectives:Using selected framework to analyse the business model of Douyu live and understand the current situation of China online live streaming industry.The essay will mainly focus on analysing the business model of Douyu live and thus to explore why Douyu live could become one of the leaders in online live streaming industry.Data collection will be from Internet,articles,journals, reports and the interview of anchors.

2.Literature review

2.1Business model

Business model is a broad topic.Different authors may have different viewpoints.But there is a general point of view is that business models are about how doorganizations create value(Gao,2017;Porter,2001).According to Mitchell and Coles (2003),business model consists of seven elements:who,what,when,why,where, how and how much when the company providing products or services.And the organization is supposed to understand:who is customer,what does customer value, how to generate revenue and how to deliver value to consumers(Magretta,2002).

Generally,the research of business model can be divided into four streams(Gao, 2008).The first kind of stream pay more attention to the classification of business model.One influential point of view is given by Timmers(1998),he described the business model as a structure for product,service and information flow,which includes a description of the various business actors,potential benefits and the sources of revenue.This opinion focus on improving profit by effectively and efficiently organizing the resources and the electronic commerce activities.Another famous point of view is pointed out by Rappa(2001).He concentrates on the way that how the organization does business so that the organization can development sustainably. Rappa also categorizes the business model into nine forms,including advertising, affiliate,brokerage,community,infomediary,manufacturer,merchant,subscription and utility.The second stream depicts the various components of the business model and explain the mechanisms of how to use IT to do business(Gao,2008).Afuah and Tucci(2003)points out that Internet business model is supposed to help the company to make money for a long term by using the Internet.Further,they summarize ten common elements in business models:profit site,customer value,scope,price, revenue sources,connected activities,implementation,capabilities,sustainability and cost structure.However,according to Pateli and Giaglis(2003),the research on business components is difficult to make a contribution to an overall progress of knowledge generation.Thus,in the third stream,the emphasis has shifted to explore the linkage between the various components of the business model or modelling IT business process.One of the frameworks bases on four supports,which include products and services,IT infrastructure,customer relationship and financial assets (Osterwalder and Pigneur,2002).The framework combines the business model with IS infrastructure.Finally,the fourth stream focus on identifying criteria so that evaluate business model.In order to evaluate the potential of business models,Hamel and Ruben(2000)point out four factors:efficiency,business uniqueness,IT-business fit and profit booster.2.2Gao’s framework

The following framework is designed by Dr.Gao,which can be seen from figure1. Gao(2008)points out that generally,in IT business model research,value and value creation are key for organizations.How value is created has become the most grail guest of scholars(DaSilva and Trkman,2014).Thus,value is supposed to be the core of this framework.In addition,the value is indirectly influenced by Internet/IT and environment which are two external factors,and it is directly influenced by two internal factors,including firm capability and resource and the firm boundary.

Figure1.A framework for analysing information technology business model.Source:

Gao(2008)

Value

In the framework,value is the basic element.As for a business model value is also the core element.What is the value and how to make value are important for a company. Value creation is vital for organizations to sustainably develop.The value includescustomer value and firm value and here the firm value refers to revenue,profit and competitive advantage which could ensure the company to sustainably develop.

Firm capability and resource

The second dimension is firm capability and resource which is internal element that can directly impact on value creation.In order to generate profits,the company is supposed to efficiently use its capability and resources to provide proper products and services to the customer.Afuah and Tucci(2003)state that there are three kinds of resources:tangible(physical resources and financial resources),intangible(copyrights, reputation,brand)and human resource.They also say that firm capability should have the ability to turn its resources into customers’value.

The firm boundary

Firm capability and resource as mentioned before is mainly focus on the firm itself. However,Gao(2008)states that the firm boundary not only discusses the internal organization,but also explore the external supportive partnerships.Gao continues to say that the firm boundary should be defined both horizontally and vertically.From the perspective of horizontal boundary,the company is supposed to gain increased revenues by expanding its operation scale and economies of scope.When it comes to vertical boundary,the firm is suggested to present value chain integration and also properly explain the sources of value creation.

Environment

When designing the firm boundary,it is vital for managers to carefully consider the surrounding environment.This element can be divided in to macro and micro environment(Gao,2008).More specially,macro environment includes economic, institutional,legal,culture and social aspects,which can directly influence the whole industry.At the micro level,the industrial and competitive environment should be considered.It can directly affect the firm(Afuah and Tucci,2003).Internet/IT

The last element is Internet/IT,which plays an important role in this day and age.It can dramatically affect the boundary of the firm.In addition,the developing of IT can help firm to improve the efficiency of transaction and lower the cost.Thus,it is important for organizations to keep track of IT development so that grape the emerging business opportunities(Gao,2008).

The framework will be used in case to analyse the business model of Douyu live.The essay will explore why Douyu live could become one of the leaders of online live streaming platforms in China.

3.Case study

Douyu live is founded in2014by Wenming Zhang.It is an online live streaming platform that includes live video games,sports,variety and entertainment.But it mainly focuses on live video games.Douyu live devotes to provide the best environment for anchors and audiences(DOUYU.COM,2017).Figure2shows the results of the analysis and the essay will explore it in detail.

Figure2The business model for Douyu live.Source:Gao(2008).

3.1Value analysis

Value plays a vital role in a business model.Value creation is important for the development of the company.Value analisys can be divided into customer value and firm value.

Customer value

Douyu live constructs an enjoyable atmosphere and environment for users.In the live platform,users can freely enjoy high-definition live video and choose different kinds of live contents.At first,Douyu live mainly focuses on live video games.In order to fulfil users’needs,Douyu live signed contracts with several well-known electronic sports players from the famous E-sports games,such as League of Legends and DOTA.Then users have a great chance to watch their E-sports idols playing their favourite games without the limitation of time and place with a connected computer or mobile devices.Because Douyu live not only provides web based services,but alsohas its own mobile application.And users can learn from professional players so that improve own skills.In addition,users can send barrage,which means that they can post a comment and even interact with anchors and other spectators.The barrage function reduces the gap between spectators and anchors,which help to dispel spectators’loneliness and give them a chance to show their opinions.Moreover, spectators can reward anchors who they like or respect by using yuwan,which is a kind of special virtual props that can improve anchors’revenue.Last but not least,e-sports tournament become popular in this day and age.Douyu live provides a platform for users to freely watch the match and users can also share opinions with a large number of spectators.

Firm value

Firm value refers to revenue,profit and competitive advantage which could ensure the company to sustainably develop(Gao,2008).Firstly,Douyu live can generate revenue from advertising.With the vast number of users,Douyu live has considerable network flow.Massive users generate a mass of network traffic.The global traffic rank of Douyu live is in the top300(Alexa,2017).Therefore,Douyu live is an ideal platform to do advertising,especially for the category of video game advertisements. Secondly,Douyu sells virtual props,such as yuwan which is mentioned before.Users tend to reward their favourite anchors and thus they may top up.There is a list that show the rank of users’contribution to the anchor.Douyu live will shared revenue with anchors.Thirdly,except the competitive advantage of the large number of users, Douyu live also has sufficient capital.In2016,Douyu live completed the round c financing about15hundred million(CNY)(Sina,2016).Although live streaming platforms may have a large number of users,it has to cover high bandwidth costs.The significant amounts of funding certainly improve Douyu live’s competitive power. Finally,Douyu live has been starting to cultivate personal anchors.Except those famous stars in the field of anchors,Douyu live uses own resources to cultivate quite a few popular anchors who come from grass roots.These anchors now become the backbone of Douyu live and expands the popularity of the company.3.2Firm capability and resource

SWOT analysis of Douyu live

SWOT analysis means a process that evaluates four elements strengths,weaknesses, opportunities and threats of an organization(Humphrey,2005).It will be used to analyse the capability and resource of Douyu live.

Strengths 1.Sufficient capital:Douyu live completed the round c financing about15hundred million(CNY)(Sina,2016)

2.The number of users:In2016,the rank of Douyu live’s mobile

application is No.4in China in the category of live streaming app

(SOHO,2016).And in2017,the global traffic rank of Douyu live

is in the top300(Alexa,2017).

3.Popular anchors:Douyu live not only has several famous

anchors from professional e-sports teams,such as White,but also

has considerable anchors who are from grass roots.In different

types of live video games or other fields like sports and variety,

there are high-popularity anchors attracting spectators.

Weaknesses 1.High broadband cost:Douyu live has a large number of users and anchors.Meanwhile it needs to undertake high broadband

cost.A great number of grass roots anchors cannot generate

revenue for the platform.

2.High anchors cost:The platform has high dependence on

famous anchors.The famous anchor can attract a large number of

users.In order to retain talents,the platform also needs to provide

outstanding signing bonus to famous anchors.

Opportunities 1.Grassroots anchors:There are a large amount of grassroots in the platform and hence Douyu live has a great chance to find and

cultivate own anchors with potential.Finally,to reduce thedependence on famous anchors.

2.High network flow:The platform has high network flow.

Except traditional methods(advertising),there may still have

creative methods to monetize its traffic.For example,in2016,

Douyu live sold electronic tickets to users and spectators could

experience the high-definition live matches(SOHO,2016).

Threats 1.The threats from competitors:The peer companies will be competing with Douyu live for talents.

2.Regulations and laws:Anchors need to live streaming in a

civilized manner.They may violate individuals’privacy and

rights,especially the outdoor live broadcast.

3.3The firm boundary

The firm boundary is a vital element in the framework which can directly influence value.It can be divided into horizontal level and vertical level.

Horizontal level

With the increased number of users and broader live contents,Douyu live has more cooperative partners.More specifically,Douyu live cooperates with game developing companies like Blizzard Entertainment and Riot Games and professional e-sports club such as WE and IG.In addition,there are many anchors come from grass roots because low barrier to become an anchor.Some anchors believe that live video games can satisfy their entertainment needs and at the same time they may earn money. Meanwhile,new partners help Douyu live to increase the economies of scope.As a result,Douyu live improves the revenues.

Vertical levelDouyu live not only provides web based live streaming,but also provides mobile application for users.In addition,at beginning Douyu live mainly focuses on live video games,but now its live streaming contents become broader,such as sports, music,live outdoor broadcast,variety and so on.Douyu live has witnessed an extremely entertainment scene.With more partners take part in and more standardized management to the anchors and live streaming contents.Douyu live tends to more effectively use resources to create values and deliver better services to users.Finally, it would increase the potential of revenues.

3.4Environment

In order to develop company sustainably,it is vital for managers to understand the surrounding environment.Environment can be divided into macro environment and micro environment.Micro environment can directly influence the firm.On the contrary,macro environment,which includes economic,institutional,cultural and social,can directly influence the whole industry(Kotler and Armstrong,2010).In this part,the essay will focus on the macro environment of Douyu live and mainly explore the political factor,culture factor and social factor.

Political factor

Political factor is a very serious question for managers to consider,due to this factor can directly influence the whole industry.In China,SARFT and China’s ministry of culture have the responsibility to supervise the live industry.In2016,SARFT issued a circular to strengthens the supervision.The circular orders that the live platform must have license and any organization cannot use“TV”,which is a distinguished name,in the brand without approving.And that is why Douyu TV at the beginning changed to Douyu live now.Moreover,the live platform is supposed to obey the rules voluntarily and resist vulgar,cheap and kitsch forms of live,or the anchor and the platform will get punishments.Therefore,Douyu live should pay more attention to manage their anchors.Culture factor

Along with the gradual flourishes in E-sports industry,there are a large amount of young generations increasingly focusing on E-sports,such as League of Legends, DOTA and Starcraft.People are in urgent need of a platform which can provide them a space to communicate,entertainment and learn how to play the game better.Douyu live focused on E-sports live at beginning and signed with famous E-sports players, which help the platform to attract a considerable number of users.

Social factor

China has a very large amount of population,which means there are more opportunities.In terms of the data from Ministry of Industry and Information Technology of the People’s Republic of China(2017),mobile-broadband users almost 1billion and mobile phone users over1.3billion.Surfing online by using computers and mobile devices become a normal thing and an indispensable part of people’s daily life.Douyu live not only focus on the web based live,but also mobile devices application.Based on the accurate understanding of market trends,Douyu live tends to win a large number of users.

3.5Internet/IT

Internet/IT plays an important role in business model,which affects value indirectly. With the developing of IT,the firm can improve competitive forces.Douyu live uses network to provide free live Internet broadcasts to users.Spectators can enjoy super-definition or high-definition live broadcasts,But the precondition is that spectators register and log in the platform,or users can only watch the low-definition live broadcasts.In addition,the technology of barrage effectively improves the entertaining and creates a free environment for spectators to share opinions and feelings.Compared with traditional live broadcasts,the new technology effectively reduces the gap between anchors and spectators.The interaction surely can be able to strengthen the performance of anchors and attract more spectators as well.What’s more,considering the mobile devices markets,Douyu live provides own application

to users.By the end of2012,China had already ranked No.1with the largest number of mobile phone users.In February2017,there are over1.33billion mobile phone subscriptions had been registered in China(Statista,2017).According to Christensen (1997),in order to take advantages of IT innovation,the firm is supposed to catch the development of IT and grab the emerging business opportunities.Users can watch the live broadcasts without the limitation of time and place.As a result,Douyu live enhances the stickiness of users and improves the profits indirectly.

4.Discussion and conclusion

The essay sought to analyse the business model of Douyu live with Gao’s framework and try to explore the question why Douyu live become one of the leaders in online live streaming industry.The reason can be summarized from five aspects:Firstly, from the perspective of environment,Douyu live has benefited from the high network utilization and the popularity of E-sports in China.Douyu live strengthens the management to anchors and never breaks the circular.Secondly,the IT innovation of barrage reduces the gap between anchors and spectators.Users can use computers to watch the live and mobile devices as well and thus the limitation of time and place has been addressed.Thirdly,from the viewpoint of firm capability and resource,Douyu live completed the c round financing and had considerable capital.In addition,it attracts a large number of users and obtains high network traffic.Fourthly,Douyu live cooperates with many strong partners,such as famous E-sports clubs and video game developing companies.It not only increases the economies of scope,but also effectively uses resources to create values and deliver better services to users.Finally, Douyu live rationally uses other elements to create better value to customer and in turn the firm also generates more value.

Overall,in order to analyse the business model of Douyu live,the essay first makes a brief literature review on business model and Gao’s framework.And then the essay uses the framework from five perspectives of elements to explore Douyu live’s business model.Finally,give a conclusion of why Douyu live could become one of the leaders in the live streaming industry.The essay has the limitation of datacollection,lacking the formal resources.Some of the articles and the interviewing of anchors are informal.In future,the research tends to collect more formal resources and try to get the first-hand data from the managers of Douyu live and thus to explore the business model of Douyu live more deeply.

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