Recent reports indicate that China’s economy continues to decline, leading to a severe job market situation where many people turn to live streaming for a living. In a recent case, a live streamer worked for less than half a year, earning just over 3000 yuan in live streaming income. However, due to not meeting the required minimum live streaming hours, they were asked to pay a compensation of 1 million yuan. After arbitration, the streamer was ordered to pay a breach of contract penalty of 30,000 yuan to the company.
According to a report by Chinese media outlet “Workers’ Daily” on July 15th, in August 2022, a live streamer named Wang Yue (pseudonym) signed a contract with an entertainment company to do online live streaming. Over five months later, the company demanded the compensation citing that Wang Yue’s live streaming hours did not meet the minimum requirement set in the contract, while his income from live streaming during that period was only 3725 yuan.
Ultimately, the arbitration committee ruled that Wang Yue pay a breach of contract penalty of 30,000 yuan to the company since the entertainment company failed to provide evidence of the actual losses incurred.
The report mentions that the number of online live streaming users in China has exceeded 800 million, leading to an increase in disputes between streamers and entertainment companies. Some contracts offered by Multi-Channel Networks (MCNs) may contain clauses related to live streaming hours and breach penalties that could potentially have hidden traps.
Former part-time internet streamer Bian Siyu stated that some MCN organizations do not directly calculate a streamer’s absolute live streaming hours but incorporate indicators such as viewership, interaction numbers, and tipping amounts. “Only when certain criteria are met, it is considered as ‘effective live streaming hours.’ It’s common for a streamer to broadcast for 4 hours but only 2 hours are counted as effective.”
New internet streamer Xiao Xin, who recently entered the industry, told the reporter, “Moreover, time spent on equipment testing, filming short videos, training, and learning before and after the live streaming is generally not included in the live streaming hours. While it may appear that one needs to stream for an average of 5 hours per day as required by the organization, in reality, it may mean working for over ten hours. Staying up late for live streaming and working continuously for multiple hours are common occurrences, leading to physical exhaustion in the long run.”
Wang Yue’s contract had clear stipulations regarding the duration of live streaming. As a company streamer, Wang Yue was expected to stream for 6 hours daily, with a minimum of 150 monthly effective live streaming hours and a requirement of at least 26 broadcasting days per month; failure to meet these conditions would be considered a serious breach of contract.
Due to health issues preventing him from sustaining high-intensity work and the presence of numerous unfair terms in the contract, Wang Yue requested contract cancellation, which was rejected by the company.
Xiao Xin also faced a claim due to inadequate working hours: “Having worked for over two months with a monthly income of less than 3000 yuan, a breach penalty of 200,000 yuan was imposed!” Xiao Xin was unable to meet the agreed-upon streaming hours, making it difficult to maintain basic living expenses. Upon voluntarily requesting contract termination, the MCN organization demanded a substantial compensation.
Earlier, the “China Internet Audiovisual Development Research Report (2024)” revealed that by December of the previous year, there were a total of 1.55 billion short video accounts on the whole network, with 15.08 million professional streamers. This means that on average, there is one professional streamer for every 100 individuals.
On April 8th, Professor Lv Benfu from the Business School of Chinese Academy of Sciences University wrote in a Chinese media publication that the seemingly overnight fame cases of grassroots individuals on the internet can lead to survivorship bias, causing people to lose themselves in the aura of streamers becoming rich overnight.
The article indicates that current data shows that among streamers whose primary source of income is live streaming, 95.2% earn monthly incomes of less than 5000 Chinese yuan. The new “80-20 rule” shows that 2% of streamers take away 80% of the earnings, leaving the remaining 98% of streamers struggling to even meet basic needs.