斗鱼直播商业模型分析(英文论文).pdf

University of Manchester Global Development Institute Course Title eBusiness Organisation and Strategy Course Code MGDI 60352 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 9648928 Word Count 3377 96489281 1 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 since 2014 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 In 2015 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 1 Business 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 do 96489282 organizations 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 96489283 2 2 Gao s framework The following framework is designed by Dr Gao which can be seen from figure 1 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 Figure 1 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 includes 96489284 customer 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 96489285 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 in 2014 by 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 Figure 2 shows the results of the analysis and the essay will explore it in detail 96489286 Figure 2 The business model for Douyu live Source Gao 2008 3 1 Value 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 also 96489287 has 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 top 300 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 In 2016 Douyu live completed the round c financing about 15 hundred 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 96489288 3 2 Firm 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 Strengths1 Sufficient capital Douyu live completed the round c financing about 15 hundred million CNY Sina 2016 2 The number of users In 2016 the rank of Douyu live s mobile application is No 4 in China in the category of live streaming app SOHO 2016 And in 2017 the global traffic rank of Douyu live is in the top 300 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 Weaknesses1 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 Opportunities1 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 the 96489289 dependence 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 in 2016 Douyu live sold electronic tickets to users and spectators could experience the high definition live matches SOHO 2016 Threats1 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 3 The 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 level 964892810 Douyu 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 4 Environment 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 In 2016 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 964892811 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 1 billion and mobile phone users over 1 3 billion 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 5 Internet 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