Mobile firms feed off CCTV’s FIFA coverage
As Brazil and Croatia compete for the first point in the kickoff match of the 2014 FIFA World Cup, Chinese Internet companies are joining an equally intense head-to-head scuffle at home, trying to score big from the world’s most popular sporting event that happens every four years.
Mobility, a winning ingredient for a soccer game, also is the key word in Web firms’ World Cup playbooks this summer.
Mere days before whistles blow in Sao Paulo’s Arena Corinthians, e-commerce giant Alibaba Group Holding Ltd’s cloud-computing subsidiary said it was launching a mobile application with China Central Television to provide “the nation’s only” live stream webcast of matches for mobile users.
The number of daily users of the app is likely to break 10 million, according to the developer.
Think CCTV as team Brazil in the soccer arena. China’s longtime No 1 TV network took in approximately 1 billion yuan ($161 million) in advertising profits from the 2010 World Cup.
To buy the rights to air the 2010 and 2014 World Cups from FIFA, CCTV spent $115 million five years ago. New deals are yet to be announced.
“CCTV will focus on content production during the World Cup, andWeb companies such as Alibaba will take care of the technical problems,” said Wang Wenbin, head of Alibaba’s cloud unit.
Working with CCTV is a difficult deal for many companies, which end up being secondary webcasters under the broadcasting Godzilla.
For example, Tencent Holdings Ltd, a big spender in the webcasting sector, couldn’t provide live match video in China this summer because CCTV refused to sell live stream broadcasting rights to other platforms.
Local video websites were forced to purchase match webcasting rights from CCTV, but only top-tier sites can afford the stratospheric licensing fees. Six Chinese websites purchased replay rights of the previousWorld Cup in 2010 from CCTV. Each site ended up paying CCTV 1.5 million yuan.
Prices for Brazil World Cup replay and on-demand match replay rights remain unknown.
Tencentwasamongthe seed teams who had pockets deep enough to cut such a deal with CCTV.
Only able to webcast replays online, the company, based in Shenzhen, Guangdong province, decided to bypass the wall CCTV put up. It announced it would bridge its online video platform, mobile app and social networking resources together for the soccer event this summer to provide “a fresh game watching experience”. The company will exploit its popular social networking apps, including WeChat and the mobile edition of QQ, to let fans discuss the game and predict scores. WeChat has roughly 600 million users globally.
Sohu.com Inc also came up with a newtactic to lure traffic since the Web portal couldn’t air live matches on its own. It inked a deal with China Telecom Corp Ltd to provide the mobile traffic used to watch CCTV’s official live webcast free of charge. Analysts said Sohu’s move was the first public tryout of waiving traffic charges for mobile users. Industry regulators have encouragedWeb companies to purchase traffic fees from telecom carriers ahead of time and then distribute them to individual smartphone users free of charge.
Companies such as LeTV Information Technology Co and Qihoo 360 Technology Co Ltd also announced World Cup strategies for their mobile businesses.
Industry insiders business model for firms remains although different said the Internet
simple types of partnerships were made public.
Selling advertising slots remains the major revenue source for Web companies, industry consultancy iResearch Consulting Group said.
“Based on the experience of the 2010 World Cup, more than 85 percent of Chinese netizens will pay attention to the event. This alone is a perfect reason for advertisers to spend big this summer,” said iResearch.
In addition, the company said more than 60 percent of Web users will pay extra attention to online advertisements during the monthlong World Cup.
With so much at stake, CCTV is on high alert, defending its interests during the event.
On Wednesday, the station issued a strongly worded warning about unauthorized online match video sharing.
“No news organization, enterprise or individual should show game content of any kind on TV, radio, the Internet, IPTV or mobile applications until the end of 2014,” CCTV said.
Unlike theWorld Cup itself, more than one top video site will declare victory after the event wraps up: Small, illegal live streaming domains are also likely to get a cut from the huge advertising market that the world’s biggest soccer tournament has helped create.
A quick search of “World Cup live webcast” on popular search engine Baidu gave more than 100 million results. Novice sites providing unauthorized live services line up below popular platforms such as Sina, Letv and QQ.
A dozen or so video apps on Apple Inc’s iOS also promised to provide live streaming of the games, most of which did not sign a partnership deal with CCTV. The number of such apps on Android-based devices should be significantly higher due to weak regulatory measures on the open-source platform.