text | Tong Linlin
Lanxiong Sports received news from multiple sources that the NBA has reached a contract renewal agreement with Tencent and completed the contract signing today. The digital media copyright of the new cycle (2020-2025) will continue to remain with Tencent. The contract The amount is expected to be US$1.5 billion in five years, almost three times the amount in the previous five-year cycle. Contract renewal negotiations between
began last year, but no agreement was reached before the end of the exclusive negotiation period at the end of March this year. Then Ali joined the fray, and the two companies conducted several rounds of negotiations with the NBA on whether to be exclusive and how to cooperate. In the end, they both clearly demanded exclusivity.
According to Lanxiong Sports, NBA China reported the two plans to the NBA headquarters last week. There is not much difference in the quotations of the two sides. They both showed their sincerity in winning, and the "boss" of both sides are Liu Chiping and Cai Chongxin. Considerable effort has been invested in . NBA headquarters also held a special meeting for this purpose, but no decision was made immediately. After several days of thinking, NBA President Adam Silver finally chose Tencent.
Before this renewal, the exclusive copyright of NBA new media in the previous cycle was in the hands of Tencent. At the beginning of 2015, Tencent obtained the exclusive broadcast rights of NBA digital media for the 2015-2020 season for US$500 million. More than a year later, it bought out the rights to League Pass for the 2016-2020 season for a total price of 200 million yuan. Finally, after the cooperation For four years, it has the digital media broadcast rights for all 1,230 regular season games and all playoffs in the NBA season.
At the end of 2018, NBA China announced its cooperation with Bytedance and Migu . Both cooperations are for one and a half years, which is consistent with Tencent’s current NBA cycle.
Among them, Toutiao , Douyin , and Xigua Video have obtained NBA short video rights, while Migu has obtained NBA short video rights in mainland China and some live broadcast rights in Hong Kong and Macao.
So far, in mainland China, in addition to Tencent occupying exclusive live broadcast rights, short videos and League Pass, platforms with rights to NBA digital media content include , Weibo, , Toutiao, and Migu, short video rights holders. At the TV level, TV stations such as CCTV still have the right to live broadcast, and BesTV has the right to live broadcast the games of IPTV. In addition, Alibaba’s Tmall also signed a contract for NBA short video rights.
Digital media broadcast platforms including Tencent, Weibo, Toutiao, and BesTV have contracts with NBA China until the end of the 2019-20 season. As of the end of March 2019, Tencent and NBA China were in the exclusive negotiation period for contract renewal.
During this period, China Mobile's Migu and Alibaba's Youku were also in constant contact with NBA China regarding cooperation on short video rights.
Lanxiong Sports has previously learned that is in renewal negotiations, and Tencent hopes to obtain truly exclusive digital media rights in the next copyright cycle. The fully exclusive digital media copyright mentioned here means that there is only one partner, Tencent, on all digital media platforms such as PC, mobile, social media, OTT, and mobile news aggregation platforms. Tencent's logic in expressing this appeal is naturally to hope to gather all NBA video resources, avoid any diversion, obtain more traffic, and on this basis, maximize the income scale of paying members.
A small suspense at the moment is that the NBA can finally persuade Tencent to give up its short video, League Pass and IPTV live broadcast rights. In order to maximize dissemination and expand cooperation, the league certainly does not want any one to own all the copyrights, which will lead to BesTV, BesTV, Weibo, Toutiao, Douyin, Bilibili and other channels are restricted, which is inconsistent with the NBA's overall strategy of expanding user boundaries around the world. According to information obtained by Lanxiong Sports, if Tencent gives up this part of its rights, the price of the overall copyright package may drop to around US$1.2-1.3 billion.
's insistence on "never distributing" is also related to the business opportunities of the NBA event itself, that is, the NBA belongs to North America and mainly occupies the morning time slot in terms of broadcast time - it has a unique advantage in attracting Chinese audiences, which is very conducive to capturing higher ratings, which provides great benefits to platform advertising investment.
During the negotiation process, competitor Alibaba had similar thoughts.
Compared with Tencent, which has been operating NBA copyrights for many years, Alibaba’s main competitive point lies in its data-driven traffic monetization business: whether it is , Taobao, , or Tmall, it accurately pushes consumers’ preferred products or content to drive traffic conversion. For consumers, the "88 Membership" is launched to encourage users to consume, entertain, and share shopping experiences within the Alibaba system, thereby increasing user stickiness and repurchase rates. In addition, through Youku, UC Browser, Weibo and other methods, it has also successfully penetrated into users' entertainment and social time, reaching potential consumer groups in an all-round way, and relying on big data for precision marketing, it has effectively increased e-commerce traffic entrances.
After 20 years of development, China's Internet demographic dividend has basically peaked. The growth of mobile Internet users is decelerating, and it is increasingly difficult to attract new products. Competing for user attention, cultivating existing users, and increasing user usage time have become the focus of competition for each company. . In Alibaba’s existing traffic system, sports is its weakness and also its potential user growth point. Therefore, the NBA, as the top portal for online traffic in the sports field, naturally has great attraction for it.
Alibaba has already tasted the benefits in this regard last year. They only secured the new media copyright three days before the start of the World Cup. According to Lanxiong Sports, although the copyright cost 1.6 billion yuan, they eventually gained about 20 million new users.
However, compared to Alibaba’s e-commerce logic, Tencent’s successful operation of NBA content in the past few years, as well as its control of basketball resources, user accumulation and recognition, are its important advantages.
has the ready-made advantage of Tencent. With the rapid rise of Tencent Video in recent years, has allowed Tencent to accumulate enough CDN bandwidth to support millions of people watching live sports events in high definition and Blu-ray quality on the Tencent platform at the same time. , without causing unclear picture quality or streaming media lagging.
high-traffic entrance is also critical. Compared with film and television variety shows, sports are still only a niche consumer field in China. Therefore, for a platform, in addition to the 20% core sports users, whether it has another 80% of large pan-sports users is also a matter of success or failure.
At this point, Tencent has a huge advantage over all previous competitors. In addition to the two major user platforms of Tencent Video and Tencent News, Tencent also has WeChat, QQ browser, QQ, mobile QQ, and the growing Tiantian Kuaibao to participate in the distribution of sports content. The media collection, editing, production and operation capabilities of the
platform itself cannot be underestimated.
"20% of the final operation of an event's copyright depends on the IP itself, and the other 80% depends on the size and operating capabilities of the operating platform. Except for major events such as the Olympic Games and the World Cup, other events must pass through this fortress. If you are looking for a partner, then Tencent is waiting for you here," Zhao Guochen, deputy editor-in-chief of Tencent and general manager of and Tencent Sports , said in an exclusive interview with Lanxiong Sports in 2017.
Zhao Guochen, deputy editor-in-chief of Tencent and general manager of Tencent Sports Operations.
According to Zhao Guochen, as of the end of 2017, Tencent Sports had about 350 employees, and the overall editorial team had grown by 50% compared with before he transferred from the chief editor's office to the sports business. Among them, the number of graphics and editing staff is about 70-80, and more than 150 people have been invested in the NBA project; in terms of studios, there are currently 5 studios in the Sigma Building and 6 studios in Jiuxianqiao, and there will be more in the future About 4 were built to meet the peak demand for studio resources brought about by a large number of concurrent games; Tencent broadcast more than a thousand NBA games last season, and most of the games were accompanied by commentary, and only a dozen games were without commentary. Go out naked.
However, due to the new business cycle, copyright prices have risen to an unprecedented US$1.5 billion in five years, which is an average annual price of US$300 million. This cost pressure is a huge challenge to Tencent's liquidity.
Previously, according to Zhao Guochen, Tencent Sports’ NBA project won the NBA League Pass copyright for four seasons in 2016. The copyright cost increased gradually, but in the 2016 and 2017 seasons, the gross profit basically reached a break-even level (copyright + operating hard costs). Among them, membership income accounted for more than ten percent in the first season, and about 20% in the second season.
Although Tencent has not officially announced the specific data of paying users, considering the user attention throughout the season and the number of Tencent's own users, this number will not be bad. If we insist on obtaining the full exclusive copyright of digital media in the true sense, it should be A side note that Tencent is relatively satisfied with the data. In the past few years,
has been involved in copyright operations including content production, media production, membership services, and the use of new technologies, or in promoting basketball through offline and online entertainment + sports cross-border methods. In terms of the commercialization of projects at both the 2B and 2C ends, Tencent has achieved achievements that are praised by the industry and outside.
From the perspective of membership payment, in the past few seasons, Tencent Sports has launched its own paid broadcast system, designing three plans: 30 yuan for 1 month, 88 yuan for 3 months, and 298 yuan for 12 months. Members can watch events including All-Stars, Eastern and Western Conference Finals, and Finals for free. They can watch at least one free live broadcast through Tencent Sports every day, while paying users can enjoy member-only content such as exclusive games and Blu-ray quality.
However, with the surge in copyright fees in the new cycle, the existing membership payment system is obviously unable to meet Tencent's demand for revenue. It is probably imperative to open up a larger membership market and even increase membership prices in the future. measures.
However, after winning the exclusive rights for the next cycle, Tencent’s paid live broadcast plan has more possibilities, such as launching a team-exclusive package for Chinese Warriors fans, with more precise target users and more directional marketing.
The NBA’s choice of Tencent will have a domino-like impact on China’s sports industry. According to Lanxiong Sports, Ali’s recent integration negotiations with Suning PP Sports have reached an impasse. After losing the NBA this time, Ali cannot be ruled out accelerating the pace of negotiations and integration.
