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Media & Entertainment

China bans spending by teens in new curbs on livestreaming

Hosts and gift givers must provide real name, after accusations of abuse

A livestream event based in southern China: Internet celebrities and employees tout a company's products in a popular new format for reaching customers.    © AP

HONG KONG -- China's media watchdog on Monday ordered that hosts and gift givers on livestreaming platforms register their real names and banned teenagers from gifting altogether, limiting the main revenue source for the multibillion-dollar online industry.

The National Radio and Television Administration has tightened regulations on livestreaming, which has become a popular channel for merchants to sell to customers during the coronavirus pandemic.

Livestreaming --  a segment that contains e-commerce, online gaming and entertainment activities -- has flourished during COVID-19-related restrictions on social activity. But criticism is growing about the behavior of some programs, including manipulation of viewership data, the sale of incorrect products and the appearance of pornographic content.

Livestreaming platforms now must limit the amount of money a user can give hosts as a tip. Users must register their real names to buy the virtual gifts, in addition to the ban on teens giving such gifts.

The administration also asked the platforms to strengthen training for employees who screen content and encouraged the companies to hire more censors, who also will need to register with regulators.

The media regulator will create a blacklist of hosts who frequently violate the rules, and ban them from hosting livestreaming programs on any platform.

"The livestreaming platforms should prioritize social benefits and spread the positive energy," the notification said.

The rules come ahead of a planned initial public offering in Hong Kong by Kuaishou Technology, China's second-largest short-video app. The Tencent Holdings-backed company generated most of its revenue from viewers who buy virtual gifts to present to hosts of livestreaming programs as a way to show support and appreciation.

In the first six months of 2020, the company produced revenue of 17.3 billion yuan ($2.64 billion) from livestreaming, mostly via virtual gift income. That represents 68.5% of Kuaishou's total revenue.

Kuaishou has warned investors in its prospectus filed to Hong Kong Stock Exchange.

"Given that the internet business is highly regulated in China," it said, "intensified government regulation of the short video, live streaming and e-commerce industries in China could also restrict our ability to maintain or increase our user base or the user traffic to our platform, which will materially and negatively impact our business operations and financial results."

Nikkei Asia reported in September that Kuaishou was seeking a $5 billion IPO that would value the company around $50 billion.

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