Each year there is an auction for the chance to sit down for lunch with Warren Buffett. The proceeds go to charity but the bidders are hardly selfless, hoping for a flash or two of insight from the Sage of Omaha. Since 2009 at least three of the successful bidders have been Chinese (see WiC297), paying out over $2 million for the personalised pow-wow.
The auction uses a straightforward means to determine the value of Buffett’s time – eBay auction – but MiaoA, a Chinese firm that trades in the timetables of celebrities, says it has developed a more complex algorithm for selling access to Chinese stars.
Founded last year, MiaoA is the latest in a series of firms, such as e-Second and Timesks, that buys and sells time.
It sounds dystopian but these start-ups are essentially talent agencies selling access to their stars. Once celebrities sign up, the firm tracks variables such as the size of their fanbase, their activity on social media and their ranking in search engine indices. It then uses that data to determine how much each second of the celebrity’s time should be worth. Once MiaoA has determined a price it block-buys 240 hours of the celebrity’s time at a discount, and then pays out half to the star upfront.
These “time shares” are then floated at a fuller price on the company’s website where users can buy, sell, swap or utilise their favourite person’s time. As far as the last option is concerned, purchased time can be spent in online and offline categories. Online utilisations include buying voice messages and video calls; while offline uses (which are typically much more expensive) can range from going out to dinner with the celeb to other activities that the individuals are willing to do.
MiaoA takes a 3% commission on all transactions, plus a 20% cut from their signed celebrities.
According to ThePaper.cn, MiaoA facilitates up to Rmb500 million ($75.6 million) worth of transactions each month. At the time being, MiaoA has signed up a little over 150 notables, who are mostly athletes, artists and business leaders, although it aims to expand into an open market where anyone who believes that their time is marketable can register their own ‘time shares’.
Speculators on the new ‘time share’ exchange can make a quick buck. For example Yu Dabao, a football star on the national team, saw his price soar from Rmb1,000 an hour to Rmb30,000 after China won a match against South Korea.
Normally, most of the celebrity values, ThePaper.cn reports, peak quickly after they float and then level out closer to their initial value.
MiaoA’s marketing boss Liang Jie claims that some 60% of customers are speculators – separating the group evenly into long-term and short-term investors – while the remainder are genuine fans.
The fans tend to utilise their shares to buy a service from their idol.
Zhang Yuan, the lead singer of boyband Top Combine, for instance, will personalise songs for fans looking to redeem their time shares.
Admirers of Chen Xiao, meanwhile, a professional model and video gamer, can buy her time in order to compete with her in online games.
Over the longer term, the more speculative aspect of MiaoA’s business model might become a concern for financial watchdogs. The company is licenced as an app but it is operating like a broker in a commodities market. Liu Xinyu, a Shanghai-based lawyer, told ThePaper.cn that MiaoA’s trading practices may violate a number of regulations. Whether the authorities move to curtail this burgeoning industry remains to be seen.
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