Chinese Regulators Start Month-long Rectification of Livestreaming Platform DouYu

Image Source : China Visual

BEIJING, May 9 (TMTPOST) —— The Cyberspace Administration of China (CAC) instructed the cyberspace administration of Hubei province to dispatch a team of officials to oversee a month-long on-site inspection of live-streaming platform DouYu to address problems including pornographic and inappropriate content on Monday, according to the company’s official website.

As a result, the Nasdaq-listed comanys shares plunged 15% in pre-market trading and closed at $1.08/ADS on Monday, losing as much as 14 percent at one point, according to the Securities Times.

DouYu was named in CAC’s 2022 campaign to fight pornography on Feburary 26. At that time, the company was given a deadline for rectification and fined according to the law. The responsible persons also received strict treatment.

DouYu was named again in the first quarter of the CAC’s clampdown on April 30 and was again interviewed and punished for spreading obscenity and pornography.

Headquartered in Wuhan, DouYu is a leading game-centric live-streaming platform in China and a pioneer in the esports value chain. Formerly known as ACFUN Live, it officially changed its name to DouYu on Jan. 1, 2014. DouYu went public on Nasdaq with an offering price of $11.50 on July 17, 2019, but its current market value is less than one-tenth of the issue price, with a total market value of only $345 million.

DouYu reported a fall in revenues in 2021 and 2022. The revenue in 2021 amounted to 9.165 billion yuan ($1.32 billion) in 2021, down 4.55% year-over-year. The company reported revenue of 1.68 billion yuan ($243.7 million) in the fourth quarter of 2022, down 28% year-over-year. In addition, DouYu’s user activity continued to decline from 55.1 million mobile average monthly active users in the first quarter of 2022 to 57.4 million mobile average monthly active users in the fourth quarter of 2022.

Although DouYu maintains the leading position among live-streaming platforms, short video platforms such as Douyin and Kuaishou have grabbed users’ attention and acquired the market share with sweeping momentum. According to data released by Quest Mobile, Douyin had 680 million monthly active users at the end of 2022, and Kuaishou had 390 million monthly active users during the same time. In terms of revenue, Kuaishou’s revenue was more than ten times that of DouYu and Hu Ya, another leading live-streaming platform, in 2022.

Chinese regulatory authorities have repeatedly issued documents regulating soft pornography on online platforms in recent years. The CAC and other six departments jointly issued a document to strengthen the standardized management of online livestreaming in February 2021, which clearly stated the comprehensive cleanup of content related to vulgarity, feudalism, superstition, and other illegal and undesirable information. A document jointly issued by the State Administration of Press, Publication, Radio, Film and Television of the People’s Republic of China and the Ministry of Culture and Tourism in June 2022 also stipulates that content related to sexual innuendo and sexual teasing shown by clothing and makeup, languages, behaviors, and livestreaming background is forbidden when anchors providing network performances and audiovisual program services. However, DouYu’s condoning inappropriate behaviors of its online anchors has challenged the bottom line of regulation.

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