In January this year, Cheng Yizhong, then CEO of LeTV Sports , revealed to Hong Kong media, including Ming Pao, that the company is negotiating media copyrights in the NBA Hong Kong region. At present, the senior media person has resigned in a low-key manner, but LeTV Sports’ purchase of NBA Hong Kong copyright has resulted in the results.
5 exceeded US$100 million
On September 14, LeTV Sports and NBA China jointly announced that LeTV Sports will become the official media partner of the NBA in Hong Kong and Macau for the next five seasons (2016-2021 season).
During the cooperation period, LeTV Sports has obtained the rights to play NBA content on smart TVs, TV boxes and mobile Internet platforms in Hong Kong and Macao. These include live broadcasts of at least 400 games (regular season, playoffs, All-Stars) per season, NBA drafts, and multiple NBA own programs.
At the same time, the cooperation between the two parties also covers authorized products and e-commerce. Among them, authorized products include two parts: physical and virtual. The physical part is LeTV Sports has been authorized by the NBA and NBA team LOGO, and can be used for some terminal devices such as TVs and mobile phones produced and sold by LeTV.
According to information obtained by Lazy Bear Sports from insiders, the cooperation between LeTV Sports and the NBA is a five-year contract with an annual increase in annual price, with a total price of more than US$100 million. In the description of NBA China, LeTV Sports Hong Kong Company is positioned as "the largest partner in the NBA's history in Hong Kong and Macau."
It should be noted that although LeTV Sports has obtained sufficient copyright resources, Hong Kong and Macao users can still watch NBA games by purchasing League Pass. League Pass is a paid streaming subscription service that includes almost all regular season games in the NBA. There are 30 teams in the NBA, each team plays 82 games in the regular season, which will bring a total of 1,230 games, and in addition to this, it is the playoffs.
Hong Kong's "Sign Up" pointed out that Hong Kong users have always been able to purchase alliance passes directly through official channels and watch the NBA on their tablets or mobile phones. This is quite similar to LeTV Sports' business positioning, which may face competition, so it requires more effort to seize users.
In this regard, NBA China COO Qian Jun explained to Lazy Bear Sports that in Hong Kong, the league pass exists in the past and present, and will also exist in the future.
In fact, whether in Hong Kong, Macao and Taiwan, Europe, America and Japan, the league pass has existed for a long time and is officially operated independently by the NBA. However, due to the lack of regulatory licensing and other reasons, the NBA cannot become a direct content provider in the mainland and must provide this service through partners.
"This is a global consistent product and will not have an impact on partners," Qian Jun said.
htmlOn August 24, Lazy Bear Sports reported that the rights and interests of the league passes in the mainland for the next four seasons have been attributable to the owner, and the buyer is LeTV's competitor Tencent (both sides have not officially announced this news to the public at present). Previously, in the competition for new media copyright in the mainland NBA, LeTV Sports lost to Tencent. At that time, a source once revealed to Lazy Bear Sports that LeTV Sports bid higher, but the NBA finally chose Tencent, which has more obvious user scale and platform advantages.LeTV's high-priced strategy
This time, the NBA threw the hydrangea toLeTV Sports, not Li Ka-shing's son Li Zekai 's now TV. According to Hong Kong media, LeTV Sports has come up with a quote that is "uneconomic principles".
Before LeTV Sports took over, now TV broadcasted the NBA for six consecutive seasons, and was even exclusive in the last five seasons (except for the league pass). In early September, Hong Kong media, including Ming Pao, broke the news in advance that LeTV had obtained the copyright in the NBA's Hong Kong region. At that time, now TV responded that although it had submitted a competitive offer, it still failed in the end. The company believed that the other party's bidding had reached a level of "uneconomic principles". Xinbao pointed out that LeTV Sports’ contract price is 4 times higher than the last winning bid.
NBA Hong Kong copyright was once owned by now TV
This is another time after LeTV Sports defeated now TV with a high-priced strategy after the Premier League copyright war.
According to foreign media reports such as Sports Business Daily, the exclusive copyright of the 2016-19 Premier League Hong Kong spent $400 million on LeTV Sports.Although LeTV Sports CEO O Lei Zhenjian denied this number, it also admitted that it was higher than US$200 million - the price of PCCW (now TV's parent company) last Premier League broadcast cycle.
LeTV Sports also has the major copyright of the World Cup in Hong Kong. Many Hong Kong media, including Ming Pao, reported in January this year that LeTV Sports has obtained the media copyright of the 2016-18 FIFA event in Hong Kong, becoming the first mainland company and non-TV institution to obtain this right.
Except for the chairman of LeTV Holdings, Jia Yueting, , mentioned this on some occasions, LeTV has never officially announced it. Cheng Yizhong's response to the media at that time was "the price is very cheap", but according to past experience, it has become a trend to double the price of the World Cup broadcasting rights.
"Ming Pao" pointed out that when TVB executive director and general manager of the group, Li Baoan , he revealed that the bidding and production fee were about HK$400 million, while Hong Kong cable TV station (CableTV) won the World Cup broadcast rights for three consecutive times since 2002, the fees for winning the World Cup broadcast rights for three consecutive times were more than HK$62 million, HK$117 million and HK$265 million. When TVB won the World Cup broadcast rights for France in 1998, it was only more than HK$15 million.
LeTV Sports’ series of actions in Hong Kong
LeTV Sports’ radical playing style has not only attracted controversy in the mainland, but also in Hong Kong. According to Xinbao, marketing scholar Xi Riming said that in terms of short-term economic benefits alone, it is not worth buying NBA copyright at a high price, and new user income may not offset the copyright cost.
Senior advertising agent Zeng Jinqiang also pointed out in an interview with Xinbao that although the NBA copyright price has increased several times, LeTV Sports’ advertising revenue in Hong Kong may not be able to increase, so this copyright input and output may face losses.
However, as a new player in the Hong Kong market, LeTV Sports has its own development strategy, and it is difficult to make money by relying on the NBA. However, relying on the successive high prices to gain copyright, it quickly expands the scale of users, seizes market share, and builds the brand's influence in Hong Kong. This is probably the real purpose of LeTV.
Globalization Strategy Test Field
"In Hong Kong, in terms of copyright fees, the NBA is very different from the Premier League." Yu Hang, COO of LeTV Sports, who is responsible for connecting with Hong Kong business, told Lazy Bear Sports that although LeTV Sports is expensive to purchase copyrights, if it is included in the integration and linkage with LeTV Group's other businesses, the overall revenue may be different in the end.
A year ago, LeTV TV entered the Hong Kong market. Since then, LeTV has successively launched mobile phones, boxes and other products in Hong Kong, and adopted a software and hardware combination strategy of membership plus TV or mobile phone discounts in sales.
This is also what the NBA values. After all, LeTV's cross-border operation of multi-platform and multi-terminals is conducive to the promotion of NBA content and brand.
"We will also pay attention to whether their (multiple business cross-border) expansion will cause limitations in terms of capital, management energy, and business capabilities. Whether the plate is too big and the front line is too long. From our comprehensive judgment, the advantage lies in adopting more innovative methods and providing customers with high-quality services in a forward-looking manner." Qian Jun told Lazy Bear Sports.
In mainland China, LeTV Sports is trying to promote the concept of payment. The Hong Kong market is a better driving range, which may bring more experience to LeTV Sports.
As we all know, Hong Kong people have always loved watching live sports, especially football, and have a strong willingness to pay. Although the NBA is far less popular in Hong Kong than in the Premier League and La Liga, in LeTV Sports' view, this means market potential and opportunities.
"Hong Kong's NBA users are very young and are highly consistent with LeTV Sports' target users." Yu Hang pointed out.
At present, Hong Kong is the test site of LeTV Sports
At the same time, LeTV Sports is fighting the Hong Kong market, which is more or less a bit of a bottom-buying meaning. It is obvious to all that the Hong Kong TV industry has already passed its heyday and its market space is limited. The general environment of the Hong Kong sports media industry is not ideal now. Commentators including He Hui and Ding Weijie come to the mainland to expand their business, and there are only few TV stations such as now TV in the platform that broadcasts professional leagues all year round.
This also means that compared with the mainland sports copyright market, which has become a red ocean, LeTV Sports faces little competition in Hong Kong, and has a relatively loose environment and can make various attempts. If the business model that combines its own software and hardware can be properly operated, LeTV may have the opportunity to seize the commanding heights.
In addition, for LeTV Sports, Hong Kong's sports business also shoulders the mission of globalization. Compared with other businesses, sports is one of the most unblocked global languages. Standing in Hong Kong, LeTV Sports may look forward to Southeast Asia and even the broader overseas market.
"Hong Kong business is a very important position for LeTV Group in the process of globalization. The Hong Kong market is also the most mature and highly commercialized regional market in the world, which is naturally in line with LeTV Sports' complete payment attempt in Hong Kong." Yu Hang said.
Hong Kong is LeTV Sports’ first stop to launch a paid model, earlier than the mainland. After buying the content, LeTV Sports also made attempts in software services, such as launching its Hong Kong version of the app before the start of the European Cup, and then Hong Kong launched several sub-channels such as 24-hour sports news, comprehensive sports, Chinese Super League events, and Axiannu (Arsenal), most of which are paid channels. Yu Hangxiang Lazy Bear Sports revealed that after obtaining the NBA Hong Kong copyright, LeTV Sports has the right to choose to charge all fees.
"On the one hand, we use this payment habit and business logic in Hong Kong, and on the other hand, we use LeTV's unique ecological strategy to make it more competitive. We have tried to do a payment model in the mainland, and have also learned a lot of experience and practices in the Hong Kong market." Yu Hang said.
Statement: This article is original or compiled by Lazy Bear Sports. Please indicate the source for reprinting: http://lanxiongsports.com
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