Online Live Video Streaming Platform Valuation

The traditional view of Chinese capital market on internet live streaming was reversed by Amazon's $970 million purchase of Twitch in August 2014.Thereafter,huge amount of capital has flowed into this newly arisen industry.Since 2014,the development of live streaming began to accelerate,total number of service providers exceeding 200 in two years,with almost CNY 10 billion market size and 300 million active users.On the other hand,in contrast to the tremendous capital in-flow and prosperous industry,the research on streaming platform valuation is still blank.In this paper,we briefly summarize the recent development of live streaming industry,categorize current service providers by their core streaming content,and analyze respective business models.Furthermore,we show that traditional valuation methods are not directly applicable on live streaming platforms and demonstrate the constraint of classical DEVA model.We hence develop a modified DEVA model for streaming industry by introducing three new factors: number of active users,average per user contribution,and rate of payment.The new model is then validated by comparing with the classical earnings method on valuation of Tian Ge Interactive,a listed live streaming platform company.To conclude,we also point out certain drawbacks of the modified model and possible directions for future improvements.