Want to stop livestreaming? That’ll be $42,000

Calligraphy teacher Liu Fengyang thought he was kick-starting his career in entertainment when a livestreaming talent agency reached out to him in mid-2023. The agency promised the 58-year-old, who regularly posted videos of himself singing on a karaoke app, that it would raise his profile and earn him decent money on Douyin, TikTok’s Chinese sister app. 

Liu signed a contract with the agency, agreeing to go live for four hours a day and participate in “PK” battles — where influencers compete with each other in earning virtual gifts from their fans. 

From his home in the northeastern city of Dalian, Liu went live daily, starting as early as 5 a.m., for 20 days. But the only viewers were his friends and neighbors, he told Rest of World. The talent agency never sent him equipment, or trained him as it had promised to do. He always lost in the PK battles with young women. Liu stopped livestreaming, realizing he was not going to make any money. Then, he said, the agency sued him for 200,000 yuan ($28,104) for breach of contract. He has been dealing with the lawsuit for months, which has led to immense stress. “I cannot even sleep,” Liu said. 

China’s multibillion-dollar livestreaming industry is driven, in part, by about 24,000 talent agencies, which provide training and equipment to livestreamers to help them gain followers and income. These agencies take commissions from the earnings of individual influencers, as they sing, dance, sell products, flirt with the audience, or stage life-threatening gimmicks to make a living. 

Over the past few years, talent agencies have recruited aspiring influencers en masse by promising them a shortcut to fame and fortune in a tough job market, hoping some of them turn out to be big earners. But with a flooded influencer market and heightened competition, some influencers are finding themselves trapped in an exhausting, low-paying gig that they have to pay hefty penalties to exit. 

In December 2023 alone, Chinese courts handed down at least 23 judgements regarding livestreaming contract disputes, according to official database China Judgements Online. Livestreamers were ordered to compensate agencies on the training, accommodation, and equipment costs after they left the gig or switched to competing platforms. Some have been penalized for going live through personal alt accounts, so they could avoid sharing their income with agencies. Lawyers told Rest of World many other conflicts were resolved through mediation. 

Five former livestreamers told Rest of World they were talked into signing years-long livestreaming deals. But they struggled with the requirements of being an influencer, and couldn’t earn enough virtual tips to make ends meet. 

Songqin, a 22-year-old former host who spoke under a pseudonym over privacy concerns, told Rest of World she signed with an agency in 2019 to livestream on the Huya app. Lured by the high income, she performed what she described as “sexy dances” for six to 10 hours a day. She eventually decided to quit after her managers asked her to send suggestive photos of herself to viewers. Songqin’s contract stipulated that she would pay a penalty of 300,000 yuan ($42,158) if she failed to complete two years of work, according to a local media report about her case. 

Following a prolonged lawsuit, the court ordered her to pay 100,000 yuan ($14,051) for breach of contract, she said. As part of China’s social credit system, those who fail to honor court orders can be restricted from buying plane and train tickets. Songqin didn’t have the money to pay the penalty, she said, and has not been able to travel to visit her family. 

An influencer in the southwestern city of Chongqing, who preferred to be identified by her last name Tao for privacy reasons, signed a two-year part-time contract with a talent agency this past November. The agreement stipulated that she would livestream on Douyin for three hours a day, 23 days a month. The company would provide training, equipment, and promotion, and make sure she was paid at least 5,000 yuan ($703) per month for the first three months. Tao would also be entitled to 25% of her livestreaming earnings, according to a copy of the contract she provided to Rest of World. 

But after a few days of streaming, Tao realized that she hated the job, which required her to either talk into an empty channel for hours, or flirt with male patrons when there was an audience. After the agency turned down her request to cancel the contract, Tao stopped streaming. Two months later, she received an attorney’s letter demanding 153,989 yuan ($21,409) for breach of contract. “They would not let me go,” the 28-year-old said. “There are so many traps in the industry.” 

Zhen Ye, a doctoral candidate at the Erasmus University Rotterdam researching China’s livestreaming industry, told Rest of World the agencies recruit aggressively because they have to supply a sufficient number of influencers to social media companies as a prerequisite for earning more revenue. 

In light of the livestream boom, the Chinese government has introduced new rules around talent agencies. A 2021 regulation, for example, banned agencies from recruiting people aged under 16. In 2022, China’s Supreme Court addressed breach of contract committed by livestreamers, noting that local judges should decide the penalty amount according to livestreamers’ income level and investments made by the companies, instead of strictly adhering to the stipulations of the contract. 

Ye said the regulations are too vague to protect creators from potential abuses. “Concrete rules focusing on labor time, or legal rights and welfare of livestreamers, are still not formulated,” she said. Because these types of contracts are typically written as business deals rather than labor contracts, it’s difficult for streamers to secure any labor protection, according to lawyers and researchers who spoke to Rest of World.

In response to an inquiry, ByteDance, Douyin’s parent company, referred Rest of World to its dispute mediation mechanism that allows livestreamers to file complaints against their agencies. Douyin also punishes livestreaming agencies found to be scamming creators, by evicting these agencies or deducting their “health scores.” Livestreaming app Huya did not respond to a request for comment. 

Lawyers who specialize in the online entertainment industry said disputes between agencies and streamers are on the rise. Liu Xiaoqing, a lawyer in Wuhan, told Rest of World her firm processed more than 200 cases involving livestreaming contracts in 2023. She said many young college graduates had signed such deals without understanding the legal terms. 

Common reasons for quitting include mental distress and low income — 95.2% of those who counted livestreaming as their primary source of income made less than 5,000 yuan ($702) a month, according to a 2022 industrial report by the China Association of Performing Arts. “They are breaking the contracts because they are physically and mentally exhausted,” Liu said. 

Jason Jiang, a lawyer in Hangzhou, where many influencer agencies are based, said livestreaming contracts sometimes demand the equivalent of hundreds of thousands of dollars in compensation in cases of breach. Some agencies sue streamers who broke their contracts as a way to deter others from leaving, he said. 

Liu, the calligrapher, said that the rosy singing career promised to him was a lie. He has hired a lawyer and is filing complaints against the talent agency to government officials. “I’m not going to livestream any more,” he said. “It’s degrading.”