Tech companies are used to defying gravity. As Xiaomi founder Lei Jun told a 2001 IT entrepreneurship event, “Even pigs can fly in a strong wind.”It’s been a golden rule of Chinese entrepreneurs and investors ever since.

Of course, reality can only be ignored for so long. The winner-takes-all sharing economy has seen vast quantities of cash burned on everything from online cab hailing to bike sharing (with multiple misfires in between—shared umbrellas or sex dolls, anyone?). Next up for a reckoning is live streaming, after China’s third biggest platform, Panda TV, closed down for good in March.

In 2016’s live-streaming heyday, over 700 platforms swamped the market, with 300 million users broadcasting mostly self-created content about gaming, travel, food, sports, music to anime, all day long. “Showroom” live streams allowed anybody with a microphone, camera and broadband connection to conceivably become web celebrities (wanghong)—no matter how much they had to fake it.

Founded by Wang Sicong, son of real estate tycoon Wang Jianlin, Panda TV came out strong in late 2015. Wang was already famous as the sole heir to one of China’s richest men, flaunting his wealth, womanizing, and trolling actors and actresses on Weibo, earning himself the nicknames “national husband” and “secretary of discipline inspection of showbiz.” When Wang appeared at the 2016 China Joy (officially known as the China Digital Entertainment Expo & Conference) with a troupe of handpicked showgirls to promote Panda TV, it wasn’t just a marketing event—it was celebrity news.

In the so-called “1,000 streaming war,” platforms competed for status with an array of stunts. Industry pioneer  YY went public in the US as early as 2013; Huajiao appointed Fan Bingbing as its Chief Experience Officer; Douyu, Yinke, and Huya declared investment in billions of RMB. But the path to Panda TV’s total collapse may have started when Wang started a “bidding war” for wanghong, offering annual payment in the tens of millions of RMB for celebrity anchors.

When other platforms began fanning the flames, costs spiralled out of control. A gaming couple were rumored to have been paid 100 million RMB to transfer from Douyu to Huya; in 2017, Yinke spent 2 billion RMB, more than half its outgoings, on anchors; primary school students suddenly aspired to be “web celebrities.”

Live stream platforms make money when viewers like a certain anchor, buy them virtual gifts, or spend money “voting” for them. Proceeds are then split between platform and anchor. This highly competitive, money-orientated culture, in which the only goal is to expand viewership, ensured a steady  deterioration in content. By 2017, a lack of diversity (or viable business model, for that matter) alongside increasing losses caused by government attempts to regulate the industry, meant most platforms had become unsustainable. Investment cooled; Panda TV received its final round that year, and failed to find any further.

These days, “short video” apps are the latest competitor for netizens’ free time, with Douyin the current crowd favorite. Top players Douyu and Huya, both with funding from Tencent due to their gaming focus, are still in the game. But the era when ordinary people could rise to overnight fame just by simply singing or rapping a song or two in their bedroom may finally be over.

Cover Image by Tommy Huang from Pexels