In the majestic mountains of Sichuan, China, Li Ziqi (李子柒) lives a tranquil and pastoral daily life. Frequently donning a traditional white qipao, her pastimes include harvesting fresh herbs, cooking with natural ingredients and making traditional Chinese handicrafts. Videos of Li partaking in such activities are beamed to millions of people in China and across the world on social media platforms. In 2021, Li broke the Guinness World Record for “The most subscribers for a Chinese language channel on YouTube.”
Li Ziqi is the top Chinese video blogger and Internet celebrity. Her videos are eagerly anticipated by 100 million followers globally. However, this July, Li mysteriously stopped uploading new content. In October, Tianyancha web confirmed that Li is suing the MCN (Multi-channel network) company Hangzhou Weinian Brand Management Co., Ltd. In addition, all “Li Ziqi” related products trademarks applied by the company were rejected by the government.
Li does not pull off her impressive videos alone. Behind her crisp and well-edited Youtube videos are an entire team, composed of employees of an MCN agency, that strategizes about Li’s monetization. Disputed ownership of the branded merchandise and several social media accounts, combined with opaque industry principles, has stirred conflict between the Chinese MCN agency and the rising China influencer class.
Questions abound about China’s elusive “influencer factories.” What is the relationship between the bloggers and the MCN agencies? Is the industry a regulated and fair market for both parties? What hidden rules must influencers abide by?
The MCN industry in China
The average Chinese person spends nearly six hours daily on their mobile phone, and one-quarter of that time is spent on short video platforms. In the past few years, the rapid development of short video apps like Douyin (developed by the same company as TikTok) has allowed the MCN market to balloon to 24.5 billion yuan in 2020, reaching an annual growth rate of 45.8 percent. The number of MCN companies was estimated to reach 28,000 in 2020.
In the Chinese influencer industry, bloggers are usually in charge of content creation, whereas the MCN agency also plays a major role in its assistance. “MCN agencies provide services including assisting bloggers to select relatable topics, refine content, edit videos, implement paid exposures and negotiate collaborations with brands,” says the co-founder of an MCN agency in China who wished to remain anonymous. “But for top internet celebrities like Li Ziqi, the model is different. In her case, the MCN agency would primarily focus on the commercial end rather than the creative end.”
The relationship between the creators and the MCN agencies is interdependent. For creators, another critical service these companies offer is monetization.
“Chinese MCN companies work with both creators and platforms to grow their business, like implement many different strategies to help them understand the algorithms of platforms, get more lucrative deals with brands, and get their community to grow and engaged,” says David Craig, professor of global communication at USC.
MCN companies help bloggers carry out stable content production and navigate commercial realization. Nonetheless, more conflicts between the content creator and the traffic generator have surfaced in recent years. While the development of social media platforms has created more job opportunities in China, the industry lacks market regulation. So far, there are no concrete laws to determine the boundaries of legal relations and obligations between the influencer and the agency. This legal blurriness lends easily to conflicts.
Conflicts behind the top IP
Behind the brand of “Li Ziqi” is a company named Ziqi Culture, which consists of two companies. One is an MCN company called Weinian that helps her manage the online community and monetize her brand. This firm owns 51 percent of the share of Ziqi Culture. The blogger herself owns 49 percent of the share, according to Tianyancha data.
The blogger and the MCN company officially established their collaboration in 2017. Deviating from the traditional MCN model, Li insisted that all of her content be conceived of and edited by herself. During a rare interview appearance on the New China TV, she revealed her collaboration model with Weinian. “After I gained popularity on the internet, MCN company came for cooperation. They provided advertising and market solutions for my account on Weibo. We shared the costs,” Li says.
During the period of their cooperation, Weinian registered as many as 96 “Li Ziqi” and “Ziqi” trademarks, covering various industries, including food and beverage, lamps, air-conditioners, machinery and furniture. For vastly popular bloggers like Li Ziqi, one of the biggest revenue streams comes from selling fast-moving consumer goods on e-commerce platforms with her IP. But even though Ziqi Culture owns multiple brand trademarks related to “Li Ziqi”, MCN company Weinian is the controlling party.
“MCNs have begun to explore new ways to profit and monetize their relationship with the creators, but often at the expense of the creators,” says Craig, “In Li Ziqi’s case, the MCN company is producing intellectual property, brands, and products that have nothing to do with her and that she seizes no money from.”
Where will the Chinese influencer industry go in the future?
Li revealed her side of the controversy in an interview recently, insisting on her reluctance to over-commercialize her content. She explained her vision is to keep creating content to promote traditional Chinese culture.
“I hope every video I make will still be searched many years later when people want to learn about Chinese intangible cultural heritage. Then it is very important to get my content right with clear logic and great accuracy, I want to make sure every detail is correct,” Li says.
Li attributes her success largely to “getting on the trend of short-video making as related platforms kept emerging”, which “coincided with a growing popularity of Chinese traditional culture in recent years.” While the blogger did not clearly point out her relationship with the MCN agency or any commercialization plan, it is clear that her simple wish is to continue making high-quality, historically accurate content.
To better regulate the influencer industry in China, some believe that multilateral governance is needed.
“MCNs need to be better self-regulated,” says Craig. “They need to be better regulated by the state and the platforms, and they need to be better governed by the creators and their loyal communities.”
“Until the content industry formulates a suitable operating system, the conflicts between Internet celebrities and MCN will not stop,” Jiemian Web commented. What happened between Li Ziqi and Weinian is a warning for video creators and MCN agencies. Establishing a stable cooperation model and finding an appropriate split ratio of dividends are the primary issues that the industry needs to solve.
Months after abruptly ceasing to post content, Li has not resurfaced on her channel. However, she said in an interview that she plans to keep creating content. Although uncertainty remains about how long it will take to resolve the dispute between the blogger and the MCN agency, one fact remains intact — Li Ziqi’s passion for creating content to promote traditional Chinese culture.