China Sports Business Weekly | 24th May
Updated: Aug 27, 2019
Here are the top China sports business news stories you need to know from this week, and my From the Top interview is with Li Shuangfu, President of Chinese sport business media Lanxiong Sports, where we talk about the current sports digital broadcast landscape in China.
Alibaba & Suning to Team Up Chinese conglomerates Alibaba and Suning are reportedly looking to expand their relationship by establishing a joint venture dedicated to the sports industry. The deal is yet to be finalised, with the name, launch date, proportion of share, executive structure and sports assets of the new entity all still to be decided. Read more on SportsPro (English) and Lanxiong Sports (Chinese)
Mailman Take: If this happens, there will be huge reverberations around China’s digital broadcast industry. Previously rivals, the two Chinese behemoths will spark fear into competitors should their ties deepen. With no clear market leader and a growing list of companies fallen, Alibaba & Suning may realise going alone isn’t the right strategy in China. How Tencent, iQiyi Sports, ByteDance and the rest react will be intriguing to watch, and will another fall…
UFC Announces Shenzhen Fight Night The world’s premier mixed martial arts (MMA) organisation, the Ultimate Fighting Championship (UFC), announced it will host its first event in Shenzhen on Saturday, August 31, at Universiade Sports Centre. UFC Fight Night Shenzhen, presented by AirAsia, will be UFC’s third consecutive event in mainland China since its sold-out inaugural outing in Shanghai on November 2017. Read more on UFC English & Chinese
Mailman Take: Fight Nights in Shanghai and Beijing have inevitably lead to the third taking place in the high-tech city of Shenzhen in southern China. The country’s local female favourite Zhang Weili should be facing a top female contender which should help UFC reach another sell-out event and keep its sponsors happy.
AFL to Open China Office The Australian Football League (AFL) is set to continue its push into the Chinese market with the opening of an office in Shanghai in June. The new office team will oversee the development and growth of Australian rules football in China, with a primary focus on driving commercial outcomes and building long-term partnerships with either Australian companies trying to grow into China or Chinese companies trying to grow into Australia. Read more on Sport Business (English) and Sohu (Chinese)
Maiman Take: Australian rules football is very much a challenger sport in China and faces tough competition for eyeballs from many other international leagues and federations trying to crack the China sports code. Half-empty stadiums have highlighted just how difficult a proposition they face. Establishing an office is the right step to growing a footprint and finding potential partners, but the AFL will have to define its strategy and personality if it wants to genuinely grow the sport and its fanbase across the mainland and throughout Asia.
Huya Looks to the US Huya, a Chinese live streaming platform for gaming content, is expanding beyond China and eyeing up the US, as the company looks to tap the fast-growing esports market internationally. Read more on CNBC (English) and ifeng (Chinese)
From the Top
This week I spoke to Li Shuangfu, President of Chinese sport business media Lanxiong Sports, where we discussed the current sports digital broadcast landscape in China.
1. What are the biggest changes you’ve noticed in China’s OTT landscape in the past 5 years? We’ve witnessed China’s development of its OTT market in the sports industry go from from zero to one, and China is becoming a leader in OTT technology worldwide. China has only ever had one dedicated traditional sports Channel in CCTV5 (CCTV5+ later) and that isn’t enough to service the demand of sports fans in the digital age. Fans want to watch sports away from the TV and that’s why phones and pads are so important for sports consumption.
I believe LeSports was good for the market on that perspective and they brought OTT into a new era in China. Since what happened with LeSports, a lot more platforms are paying more attention to the business side of things.
Are the current business models being used sustainable? I think right now it’s not a sustainable model. One of the key reasons is that Chinese sports fans are not used to paying to watch sport. They’re willing to pay small amounts to watch individual games but not yet there where they pay large amounts of money for season passes. The subscription model isn’t working now especially with the rights fee being that high.
However, we’re now seeing more forms of content produced, such as the NBA working with Alibaba and ByteDance on content – fans are being given more options. With the NBA rights up for tender soon we could be seeing a huge shift of fans should Alibaba win that bid and a change in strategy
What key trends do you expect to see in the next 3-5 years? I think now platforms are creating more video IP compared to a sports IP. With sports fans not willing to pay for lots of sports content, we’re seeing a shift to try and reach more entertainment fans and cross that boundary. Entertainment is such a big industry in China compared to sports. Another point is how can they reach out to more female fans.
Recently there’s been a lot of focus on the importance of content outside the 90 minutes, where fans want to see their favourite players in their daily life and the dressing rooms. These factors will give OTT platforms more opportunities to gain more viewers and diversify their content offerings.
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