Watch Sports online in China

Chinese online sports media platforms: How does Tencent engage sports fans in China? | Daxue Consulting

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Chinese online sports media platforms

The Chinese online sports market

In 2014, the State Council of China issued the No. 46 document Comments Relevant to Accelerate the Development and Consumption of Sports Industry. The Chinese government stated that sports industry would be lifted as a part of a national strategy; and by 2025, the total output of sports industry in China would be 5 trillion RMB. The policy triggers the development of the sports industry of China. As a result, the Chinese online sports market is also booming.

The scale of the Chinese sports market

In 2018 , the market size of sports industry in China is 2.4 trillion RMB, while there is a 2.6 trillion RMB gap between the current market size and the goal of the Chinese government. In addition, according to the data of Forward-The Economist, the percentage of contests and performance in the sports industry of China is only 1.05%, which is tiny compared to 25% in the sports industry of the U.S. This indicates that the sports industry in China has large room for further development.

According to the estimate of PwC, the sports sector in China will embrace a tremendous annual growth to 15% in the next five years, which outpaces the expected annual growth of the world.

The number of people who watch sports online in China

Statistics offered by General Administration of Sport of China and Bohai Securities shows that the online sports audience in China rose from 80 million in 2012 to 410 million in 2016.  The 100 million average annual increase reflects the continuous growth of Chinese online sports market.

Online sports media platforms

With the sports industry initiative of the Chinese government and the number of people who watch sports online in China, the IT giants in China are establishing their own Chinese online sports media platforms. Tencent, one of largest tech companies in China, has performed the best in distributing sports information to Chinese sports fans through its established Chinese online sports media platform, Tencent Sports. Tencent Sports provides sports news and information not only related to China, but also reports on the global sports scene. The biggest achievement of Tencent Sports to open its market is that it cooperates with NBA in the U.S. to broadcast all NBA games, helping the NBA improve its influence in China. Based on Tencent’s vast social network services, Tencent Sports easily spreads to every corner of the nation and garners a large number of users, and it successfully became the main source of sports content distribution in China.

Sina, another IT giant company in China, set up the first Chinese online sports media platform Sina Sports to provide sports content in China. Sina sports is a popular Chinese online sports media platform and it has huge influence on the internet in China as it leverages the network of Sina Weibo by sharing marketing and sports information, and therefore convertsWeibo users to its own users.

Chinese Online sports media platform
[Source: Sohu “Electronic sports≠games, the electronic sports path of Alisports”]

New entrants of the sports media platform market are also noticeable. Alisports, a new Chinese online sports media platform backed up by Alibaba Group, entered the market in 2015 and have spent a good deal of money to grab its market share. Began with the e-sports in China, Alisports expanded its platform by cooperating with several international sports organizations and games and sponsoring advertisement, human resource and technical support to improve its popularity. Alisports can establish a new retail sports platform that gives different parties chances to share and exchange sports resource and information.

Tencent Sports: Tencent online sports media platform

Tencent Sports
[Source: Sohu “Analysis of operations of sports matches live streaming app – Tencent example”]

Tencent, as one of the three biggest internet companies, has built up its own Chinese online sports media platform and has taken an important position in the market. It is also a good example to unveil the Chinese online sports media market at present.

The establishment of Tencent Sports

Tencent Sports used to be a part of Tencent’s web portal as an informational channel called “sports channel” which provided sports content in China since 2003. At that time, Tencent’s “sports channel” performed just like other online sports media, merely acted like an online sports reporter offering a sports newsletter.

In 2008, Tencent Sports began to develop Tencent live streaming to broadcast a few games. As the number of competitions was not sufficient to support continuous user inflow, Tencent’s “sports channel” picked out some highlighted matches for Tencent live streaming to attract Chinese sports fans to visit the website.

Development of Tencent Sports: starting from the NBA Tencent game

In 2014, Tencent Sports started its business independently and now is led by Zhao Guochen, who is former deputy editor-in-chief of Tencent’s website. Unlike what it did in the past years, Tencent Sports determines to be a more comprehensive online platform and offers a variety of functions. At the beginning, Tencent Sports negotiated with the NBA and bought out its broadcasting rights in China for five seasons to improve Tencent Sports’ popularity. The NBA Tencent game stimulated users inflow to Tencent Sports, and Tencent Sports began to introduce more sports association and obtain their games broadcasting rights in China on the net, such as the English Premier League and the National Hockey League. Tencent Sports acted like an online TV station on which Chinese sports fans can watch sports online in China just as on TV through its website, app and other Tencent online platforms. With stable and high-quality images, Tencent Sports soon became the most popular Chinese online sports media platform.

Data on Tencent Sports

Data reveals that Tencent Sports has advanced performance in the Chinese online sports media platform market compared to other counterparts. Besides, it also shows that Tencent Sports room to develop.

Picture of users of Tencent Sports

Chinese sports fan
[Source: Baidu index “Age distribution of Tencent Sports searchers”]
Chinese Online sports media platforms
[Source: Baidu index “Sex distribution of Tencent Sports searchers”]

Data on Baidu index reveals most users of Tencent Sports mainly concentrate on people in their 30’s and 20’s, which make up 80% of those who search Tencent Sports.

When it comes to the gender distribution, Baidu index shows that males are more interested in Tencent Sports than females, with almost 90% of the searchers are male and remaining are female.

Tencent live streaming
[Data source: Jianshu “Analysis of Tencent Sports products”]
Tencent Sports community
[Source: Jianshu “Analysis of Tencent Sports products”]

Data extracted from Tencent Sports app is somewhat different from what is shown on Baidu index. The age distribution of Tencent Sports users is basically identical with what is shown on Baidu index, with age groups under 35 are the majority of Tencent Sports users. The percentage of female users of Tencent Sports is higher than that of searchers of Tencent Sports, which may suggest that females are more easily converted as loyal users than males, or it could be explained my males use Tencent Sports at a higher frequency.

Profits and cost of Tencent Sports and its users

Although no public financial data has been provided from Tencent Sports, the CEO also admits that the Tencent online sports media platform, just like other online sports media platforms in China, has not obtained any profits.

The cost now is too high for Tencent Sports, and it mainly consist of the broadcasting rights in China of different renowned sports leagues. Taking the NBA as an example, Tencent Sports signed the broadcasting contract with the NBA in 2014 the five following seasons, and it took Tencent Sports about 500 million USD to win the contract, which is a great deal of money. The prices of broadcasting rights in China of other top sports leagues are also rising, which is a huge burden for Chinese online sports media platforms.

Tencent online sports retailing market
[Data source: 36Kr “Tencent spares no effort on content and users after obtaining full broadcasting rights in China of NBA”]

As for the fees collected from the audience and users, Tencent Sports charges much less money than its counterparts abroad. At present, Tencent Sports charges fees for add-value services like better quality of images, which is different from foreign counterparts who deliver authorized matches services after the users and audience pay the fees.

How does Tencent Sports operate and make their marketing and advertisement

Tencent Sports now is the most successful and representative Chinese online sports media platform, and its success should give the credit to Tencent Sports’ operation, especially its marketing and advertising strategies.

Seize top sports rights and cooperate with top leagues and authorized TV channels

By utilizing the NBA’s broadcasting rights in China, Tencent Sports soon gained a lot of attention from Chinese sports fans. The NBA successfully helped Tencent Sports market itself as a Chinese online sports media platform. This cooperation between Tencent Sports and the NBA is mutually beneficial, as Tencent Sports began to pursue vast cooperation with other top sports leagues to expand its influence on Chinese sports fans. On the other hand, sports leagues that cooperated with Tencent Sports became more popular than before in China, as their matches had more opportunities to be exposed to Chinese sports fans and was broadcasted on Tencent Sports, which is a perfect platform to showcase itself to more potential audience.

But Tencent Sports doesn’t act irrationally, as it gave up to contend for broadcasting rights in China of all the top sports leagues with other platforms or TV stations. Instead, the cooperation between Tencent and ESPN was put forward to help Tencent to fulfill as much sports content distribution in China as possible. The cooperation between Tencent and ESPN allows both parties to share the broadcasting rights and broadcasting channels with each other. Besides, by providing editing and producing Tencent live streaming of matches for other TV stations who own their broadcasting rights in China, Tencent Sports can get access to these matches with fewer cost and expand its influence in the market. The pattern of the cooperation between ESPN and Tencent is also used by Tencent Sports with other TV stations.

Tencent Sports advertisement

As most TV stations and live streaming platforms do, Tencent Sports inserts advertisements between the breaks of each match’s video on Tencent live streaming. Except for the users who pay for the add-value services, all common users will go through the advertisements when they watch sports online in China, and this may trigger a lot of potential consumption of these companies who sponsor the advertisements on Tencent Sports.

For the advertisements that Tencent Sports makes for itself, as a subsidiary of Tencent, Tencent Sports takes advantage of Tencent’s vast social media network to reach every corner of the internet. For example, Tencent Sports leverages Tencent and Weibo to create sports topics that are reported in Tencent Sports and attracts the Weibo users who are potential sports fans in China to visit Tencent Sports and therefore achieves the sports content distribution in China, which may improve its popularity and brand-awareness. In addition, with a great deal of users on WeChat, Tencent Sports can distribute sports content in China by the links of game results and game forecasts on WeChat and redirect the users to its own platform.

Tencent biology: Sports + games, online and offline social interactions

broadcasting rights in China
[Source: Tencent Sports “Community of Sports Equipment”]

To expand Tencent Sports’ influence and market sports content in China, Tencent Sports utilizes online and offline resolutions to build up its biology chain in the market. On the net, Tencent Sports uses Tencent mobile apps like Tencent Sports, Tencent news to grant users more accesses to the matches videos or Tencent live streaming. Besides Tencent Sports assigns games commentators to renowned athlete or sports experts to interpret each game. It also leverages social media like Weibo and WeChat to create sports discussion topics, such as sports stars, matches forecast and sports teams, for sports fans in China. Teams and athletes can also create official accounts to operate their marketing activities and advertisement. Tencent Sports also maintains a Tencent Sports community, an online community for users to discuss sports, which allows user of Tencent Sports to obtain extra sports content in China provided by UGC (User Generated Content) and PGC (Professional Generated Content). Users in Tencent Sports community can not only obtain professional analysis of specific sports events and athletes, but also participate in or even create interesting sports topics and discussions, marketing the sports content in China more comprehensively.

Tencent Sports also arranges different events with KOLs or famous athletes to market sports content in China. For example, Tencent Sports invited pop stars and sports stars to compete in contests, which attracts not only sports fans in China but also the fans of the pop stars, gradually influenced the latter ones to pay attention to Tencent Sports who distributed the sports content in China and became the users of it. In addition, as the contests of events attracted a lot of attention in China, many brands like Benz and Nike sponsored Tencent for such contests in exchange of their advertisements during the contests. The cooperation between ESPN and Tencent also helped Tencent Sports to broadcast its contests via ESPN’s channels in different languages, and therefore made the contests be widely viewed around the world.

Apart from what mentioned above, Tencent Sports also plans to set up Tencent online sports retailing market. The market is a part of Tencent Sports to attract users to immerse more in the platform, and Tencent online sports retailing market mainly provides the commodities relevant to the sports leagues it has broadcasting rights in China. For example, Tencent online sports retailing market can sell products endorsed by Kobe Bryant who is a popular NBA star. Currently, Tencent Sports community shoulders part of this function by letting users to share their collection of sports kit, and therefore some of the users may trade among themselves, which incurs the inspiration of the users to immerse in the platform.

What does it mean to potential partners of Tencent Sports?

The pattern of Tencent Sports’ operation is inspiring for potential partners of Tencent Sports, especially the NBA Tencent game is a good example for Tencent Sports partners to evaluate the cooperation with Tencent Sports. Besides, there are also aspects for potential partners to consider when they want to enter Chinese market via Tencent Sports.

Tencent Sports may be monopolistic in the online sports media market

Chinese online sports media platforms are led by three main platforms, respectively are Tencent Sports, Sina sports and PPTV. While Sina sports is the traditional Chinese online sports media platform and PPTV is a emerging platform, Tencent Sports has been the most leading sports platform in China, as it leverages the influence of NBA and NBA Tencent game successfully attracts more users than broadcastings on other platforms. Besides, Tencent Sports establishes cooperation with different sports leagues, making it become the most influential Chinese online sports media platform. With substantial influence and the most users who watch sports online in China, Tencent Sports becomes monopolistic in the market and a suitable platform to market sports content in China.

Weaker negotiating power as Tencent Sports become more mature

As mentioned above, Tencent is more and more influential in the market, and counterparties may lose negotiating power when Tencent Sports expands more because other platforms have fewer contests to watch, which attract less attention from Chinese sports fans and is disadvantageous for newly entered sports leagues to market sports content in China.

A good deal of audience based on Tencent users

Tencent Sports utilizes its network shared with associates within Tencent Group and can market sports content in China more conveniently. Partners that cooperate with Tencent Sports have more incentives to sell sports content in China via Tencent Sports and more access to WeChat to spread content and convert users to using Tencent Sports to watch sports online in China.  The cooperation between ESPN and Tencent is a good example model for potential partners.

Author: Dennis Deng


See our report licensed sports merchandise market in China:


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