Ever wondered how Chinese people watch the Olympics? Well for the first time ever, they’re probably (legally) streaming it on their mobile devices via one of the country’s two biggest internet companies.

China’s state broadcaster CCTV resold the airing right for the Rio 2016 Olympics to Chinese internet giants Tencent and Alisports, the online sports arm of Alibaba, for 100 million yuan ($15 million USD) each. Under the deal, the two internet firms will be able to stream the 17-day Olympic games within the Chinese mainland.

It marks a huge shift in China’s approach to airing international events. The deals represent the first heavyweight sales of Olympic airing rights by the Chinese state to an outside entity, and instead of TV stations, they’re internet companies.

Since internet streaming rights were officially opened for the Olympics in 2008 (which happened to be the Beijing Olympics), CCTV has sold Olympic content to around 10 online content providers, but never on the scale of the deals settled with Ali and Tencent.

The whopping broadcasting fee reflects the huge appetite for mobile streaming content in China, particularly in sports. But the scarcity of potential bidders indicates another hard fact about the mobile broadcasting market: you have to have some serious cash to take part.

According to an analyst who spoke to 21 Century  Economics Guide, the high broadcasting fee eliminates conventional broadcasting channels from the competition because they lack the network of monetization channels needed to make up for the costs. Top domestic top portal sites Sina, NetEase, Sohu and LeSports have all made jaw-dropping investments in online broadcasting, but were absent from the Olympic bid.

State-media also launched the bidding process less than two weeks before the Olympic Games started, leaving little time for the bidders to seek ad resources. The schedule was made intentionally by the state TV station to fend off ad competition for its in-house online platform CNTV, local media claims. During a similar bid for London 2012 Olympics, the process allowed double the time for bidders to source advertising.

Furthermore, Tencent and Alisports are only allowed to air events 30 minutes after they happen, which means that the higher fee is paid for on-demand content rather than a live broadcasting rights.

The International Olympic Committee sold the rights to telecast the 2014 and 2016 Olympics in China to CCTV for an estimated $160 million USD in 2012. This means the recent sales to Ali and Tencent recoup almost 40 percent of CCTV’s investment for the 2016 games.

Tencent will stream the games through their online platforms and related content will be available on Tencent News and Tencent Sports. As a leader in China’s social networking market, Tencent has rich media and distribution channels, including WeChat, QQ and Tencent Video.

For AliSports, the Olympic content will be integrated into Youku Tudou, the online video subsidiary acquired by Alibaba this April. The sporting unit also cooperates with Alibaba’s core e-commerce arms, streaming sports contents to Alipay and Taobao users via live streaming features.

Major sporting events also brings customers to Alibaba’s e-commerce platforms. Data from Alibaba showed that online searches for ‘Olympics’ on Taobao’s shopping engine spiked 30 percent during the London Olympics four years ago.

Three years ago, the bidding prices would be hard to imagine in China, when the state-backed broadcaster monopolized the broadcasting right for almost all sporting events. Both the 2012 London Olympics and the 2014 Sochi Winter Olympics were broadcasted exclusively by the state. The turning point happened in 2014, when China released an ambitious plan to accelerate the development of the country’s sports industry.

According to the plan, the country expects to see sports grow into a 5 trillion yuan (around $800 billion USD) industry by 2025. A set of relaxed taxation policies were also released in an attempt to encourage industry investment.

The effect of the plan was huge. Alibaba established a separate group to tap the emerging market. Broadcasting rights for popular sporting repeatedly hit record-breaking highs.

Tencent signed a five-year exclusive agreement with the NBA to stream the league’s online content for $100 million USD. LeSports, an arm of online conglomerate LeEco, purchased the online streaming rights for China’s top soccer league for 2.7 billion yuan.

Avatar photo

Emma Lee

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via lixin@sixthtone.com or Twitter.

Leave a comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.