New digital media and its rising role in Chinese sports reform

There has been a severe battle for pricy media rights among digital media platforms since China’s biggest Internet enterprise Tencent Inc. sealed the broadcast rights to NBA for US$500m in May. And the most recent and typical case must be the RMB8b-deal for rights to produce and broadcast Chinese top tier soccer league for the next five seasons by Ti’ao Power which beat traditional TV stations led by CCTV in the bidding process.

How could these digital media brands guarantee profitability with such heavy cost?

This confused many who have remarkable experience in Chinese sports industry, which includes Ma Guoli, former head of sports department at CCTV and now President of Infront Media China.

Mr Ma recently recalled his old time at CCTV that he’d talk to the Advertising Department and work out an estimated number before bidding for any media rights in order to guarantee the advertising revenues. But in an age of rapidly rising new digital media, however, the price these platforms can offer for seemingly profitless sports events rights is unaffordable for most traditional television stations which “cut their coat according to their cloth”.

The argument that new digital media would be a big threat to traditional ones appears to be reasonable as these sites are set to become bigger players than the traditional channels in sports broadcast sphere. But Mr Ma doesn’t see that happening, instead, he believes new digital media would be an alliance with traditional TV channels. And more importantly, these sites would be playing a major role in boosting market-oriented reform around sports in China.

To defend his argument, Mr Ma says the approach taken by Chinese new digital media in sports rights is similar to that by major TV players in the US and Europe. And the approach is a great enforcement to the developmental course of Chinese sports and will help decision-makers release the origin of sports which is based upon community sports.

The examples in Western countries have told the stories that media pay high price for sports rights and brands offer enormous sponsorships fees or advertising fees because community sports ensure long-term market needs. And that was why media tycoon Murdoch and his Sky Sports would risk everything over two decades ago acquiring the broadcast rights to English Premiere League, which is part and parcel to a number of communities in the UK.

Despite the ongoing transition from a medal-driven strategy to mass sport, the new media is trying to make up what has been overlooked in China over the last 3 decades.

Days have gone that broadcast ratings being the only indicator. And communities, which were neglected by conservative Chinese television stations in the past, are key to the rising new media in their efforts to build lifelong consumers in the long run. To do this, new media are advantageous in knowing their users by spotting their consumption habit or their interesting contents through tracking systems.

Accordingly, in Mr Ma’s eyes, year’s efforts could possibly lay good foundations for their market share in twenty or thirty years of time. And it partly explains the reason why new media agencies are determined to compete for the rights to major sports events even with a seemingly ridiculous price.

Above all, new media will also provide solutions for reforms around mass sports in the country with more broadcasted grassroots sports events, personalized training scheme backed by big data or customized screening for VIP users and sponsors. Additionally, online shops make it a lot easier for consumers to select sportswear or other equipment.  

As a result, the new media in China, with big names like Tencent, Letv and PPTV as representatives, have the potential to make impact in the course of market-oriented sports reform and could play a significant role in boosting mass sports in the country.

Note: This article quotes viewpoints from an article published by Mr Ma Guoli, President and CEO at Infront Media China. The Chinese article is: “中国特色”的数字媒体和中国体育, "Digital Media and Chinese Sports with Chinese Characteristics". Link: http://ytsports.cn/news-8021.html.