Tencent Sports Has Been Downsizing For So Many Years. Why Are We Still Losing Money?

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On May 18, Tencent released its first quarter earnings of this year. Since Tencent was listed in Hong Kong in 2004, the 23% figure is the largest decline in net profit in history, and its revenue has only increased by 0.1% year-on-year, with little growth. The group is having a hard time. What should we do? Of course, it is to adjust the non core business. This is not what I said, but what President Ma said himself.

Then the unlucky Tencent sports became the first batch of optimized objects.

On May 19, Tencent sports abolished six business groups, and the proportion of "graduates" was as high as 1 / 3.

After that, Tencent's sports department has only the business groups with liquidity, such as sports copyright operation group, sports brokerage, event live broadcast, program group and so on.

In other words, so many domestic Internet companies have entered the field of sports. They all have a strong economic foundation and deep Internet experience, but when it comes to Internet sports, the results seem to be not very good.

For example, Sohu sports retired from the Jianghu a long time ago, and LETV sports stormed one after another.

Then last year, the vice president of PP sports left office, and a large number of employees left. At the beginning of this year, sina sports also carried out a wave of layoffs, and finally it was Tencent's turn.

It seems that sports programs really don't match the Internet, and the phenomenon of acclimatization is very serious, but why are these internet giants "giving heads" one after another?

Because sports shows are really NB.

According to the survey of ESPN in the United States, 51 of the 100 most popular cable TV programs in 2011 were sports programs, which increased to 95 by 2021.

What does that mean? It shows that sports programs are loved by the people, and any entertainment news award ceremony must stand aside.

But why can't such popular things make money on the Chinese Internet?

After all, it is still a matter of broadcasting rights. After all, these events are not held by streaming media platforms, and streaming media platforms have to pay for broadcasting.

The pricing of broadcasting rights is closely related to the salary of players. The more expensive the broadcasting rights are sold, the League will be able to give more dividends to each team.

The team will give players higher salaries, attract better players, make the game more beautiful, and then attract more audiences, forming a virtuous circle.

For example, in 2015, the rights of Premier League football version sold for £ 5.1 billion in the UK alone**

When it comes to the broadcast rights war in China's streaming media industry, we have to start with our old acquaintance Jia Yueting and his LETV sports.

When a large number of domestic streaming media saw the business opportunities of sports events, they all began to buy the exclusive broadcasting rights of the network, but they all lost to LETV, which was rich and powerful.

When others buy copyright, they have to choose clothes for a long time and pay a price from time to time. LETV is like entering a supermarket with promotion and discount, and empty the whole shelf with a big hand.

From 2012 to 2015, LETV sports bought 310 event copyrights, 72% of which were broadcast exclusively

Among them, there are top-level events such as China Super League, Champions League and Premier League, as well as minority competitions such as golf and car racing. It can be said that all heroes in the world enter our hub.

In the remaining top-level events at that time, Tencent sports took the NBA that remained unchanged for ten thousand years, and Suning (PP sports) bought the five-year exclusive broadcasting copyright of La Liga. If you want to watch other big games, you have to go to LETV.

This large amount of money was thrown down, which made LETV sports gain a large number of paid members and exploded another old sports streaming media from the perspective of traffic.

There were so many big capital in China at that time, how can we bear to watch LETV riding face output In addition, the strong admission of LETV has muddy the water, and other video platforms have to increase the cost of broadcasting rights

Take the CSL for example. In 2015, a company called ti'ao power participated in the CSL signal production copyright bidding meeting and offered a price of 8 billion yuan over five years, toppling the 4 billion yuan of CCTV and 4.3 billion yuan of five-star sports.

Sports Olympic power is actually a "general agent". He spent 8 billion to win the broadcasting right of CSL, which is used to sell to big bosses such as PP sports and Tencent sports.

You should know that the broadcasting right price of CSL in 2015 season is 70-80 million.

If you count it down, the price of this exclusive broadcasting right must be increased by at least 20 times, so that ti'ao power can break even**

As a result, Sports Olympic power overestimated the Chinese market, and no one was willing to be the wrongdoer, and finally smashed the copyright in his hand.

You can also guess that the foam has been blown so big that ti'ao power can't make money at all.

Finally, the broadcasting right of CSL was bought by PP sports at a price of 11 billion yuan in 10 years, a third less than 8 billion yuan in 5 years**

Sports Olympic power is a miserable loss, so it seems that PP sports that "picked up the leak" has made money? Obviously, No.

According to the report of 36 krypton, the membership income of PP sports in 2019 is 250 million yuan, which is a drop in the bucket compared with the sky high 1.1 billion yuan a year.

LETV next door spent 1.35 billion yuan to buy the copyright of China Super League. Guess how much it took back?

50 million, just a fraction.

LETV didn't go out of business immediately because it lost more than a billion. That's because boss Jia, who has a tongue like lotus as a god of PPT, can fool into financing to fill this hole.

Other companies don't.

In 2020, PP sports, which has paid the broadcasting fee for four seasons, has reached the limit and can't afford money at all.

Subsequently, CSL also terminated the contract with the middleman ti'ao power and returned to the distribution mode from the "agency mode".

In other words, the broadcasting right of CSL is not exclusive, but each platform bids for it.

Until this time, the copyright cost of each video platform was diluted and there was hope of profit.

However, this profit is only for the CSL, because the copyright price of some foreign events is still very expensive. The total price of the five-year contract signed between Tencent and the NBA in 2019 is as high as $1.5 billion**

Facing such copyright price, what can Tencent sports do? Only the fees of member prices can be raised again and again, finally adjusted to 88 yuan per month and 898 yuan per year**

Even if the price is so expensive, Tencent sports still can't make money because no one is willing to buy it.

Compared with foreign fees, this price is actually very cheap. I looked at how much it costs to see the NBA in foreign countries. I found that the minimum price is $15 a month, corresponding to 30 yuan in China.

Like other video platforms, it costs 65-95 dollars a month**

Even in Europe, where there is relatively little NBA watching, the cheapest price is 15 euros a month. You can only watch live TV and can't watch it back freely.

At this price, people still have millions of users to buy, and they earn a few years more than Tencent sports in a month. How do you say Tencent sports makes money?

A colleague in the company said that when he studied in the United States, he bought Tencent sports members to watch NBA games because the prices of ESPN and TNT over there were too expensive.

Even so, the membership price of Tencent sports has greatly exceeded the payment desire of domestic users. Many users will choose to unsubscribe during the off-season after watching the current season.

And more users will choose to watch all kinds of bootlegging.

This also caused another major reason for the difficulty of platform profitability: lack of advertising.

In addition to member income, these platforms can naturally rely on advertising to make profits, but the problem is that there are not as many people watching pirated domestic genuine event platforms, and how many advertisers dare to advertise in this field?

You don't know how many years these sports events have been dominated by the big three of condoms.

When explaining the game, the commentator always gives you a sentence: "jasbon, an international famous sports protection brand, reminds you that it's overtime" "ensure safety and don't panic when shooting". Can you stand it

Although most of the people watching these games are rough old men like me, I still get goose bumps every time I hear them over the years.

I'm not saying that these brands can't work. It's just that these brands have been advertising for so many years. It can really show that on the brand side, they really don't care about these live sports events in China.

As a result, China's sports live broadcast has become a vicious development: the pricing of broadcasting rights is high → the platform is forced to raise the price of members → users lose members because of high prices → advertisers can't see it after the traffic is reduced

If we want to trace back to the core of the problem, it is because foreign live TV began to appear as early as the 1970s. Since more than 50 years of development, it has formed a perfect and mature industrial chain.

Take the commentary level as an example. NBA games will be distributed not only to TV stations, but also to various local radio stations.

This is a great test for the skill of interpretation. Interpretation must have a thorough understanding of everything that happens on the court, and be able to analyze various tactical strategies and even psychological games.

In this way, those who can't see the picture can know what happened on the field.

Not to mention the differences in consumption levels at home and abroad, the long-standing sports cultural atmosphere, the complete membership system and services, and so on

Under this mature commercialization system, users' consumption habits are cultivated, and they will naturally be happy to pay for the program.

In China, sports live broadcasting has developed for more than 20 years, and there is still much room for improvement in all aspects.

Moreover, in many people's hearts, the positioning of sports events is not much higher than entertainment such as TV dramas.

They are used to spending more than ten or twenty yuan a month as members of TV dramas, but they may not be willing to pay a higher price to watch sports programs

This is why the sports of those Internet companies have been frustrated.

Now Tencent sports has cut down most of the original content teams, and it can still watch the live broadcast. It can be said to be the only blessing.

Just don't know, how long can Tencent tolerate Tencent sports losses? If even Tencent fails, who else will try to eat this market that is destined to need long-term cultivation?

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