Rumor: CNTV to Resell 2012 Olympics Broadcast Rights
National Business Daily, 6/08/12
A source at an online portal site involved in talks with China Central Television (CCTV)'s national online TV station, CNTV, reported to the National Business Daily today that CNTV will resell new media broadcast rights to 2012 London Olympics coverage according to a three-tiered system of plans. Plan A, priced at RMB 55 mln, includes live broadcast, on-demand broadcast, and CCTV program coverage of the games. Plan B, priced at RMB 35 mln, offers live and on-demand coverage, while Plan C, at RMB 28 mln, offers only on-demand coverage.
Last September, CNTV deputy general manager Xia Xiaohui said that CNTV would not resell its Olympic coverage rights. Xia said the International Olympic Committee had expressed its displeasure with CCTV International Networks' previous resale of coverage rights, stating that it considered only CCTV and CNTV's platforms to be in compliance with IOC requirements.
Doubts were shed on this, however, when the chief editor of an online portal said Xia's remarks were intended purely as a way to draw interest and set favorable negotiating conditions for CNTV prior to resale talks. "Going by the experience of the World Cup," the editor said, "CNTV will announce its sales policy at the last moment, as a way of buying time while it attracts advertisers."
CNTV has not revealed publicly how much it paid for new media rebroadcast rights to the 2012 Summer Games, but industry speculation puts the total cost to CCTV and CNTV at RMB 200 mln, at least, for full coverage rights in Mainland China and Macau. In addition to rights costs, CCTV will also bear bandwidth costs. For the World Cup, the portal editor estimated, bandwidth requirements for live and on-demand coverage were likely 300 Gb, billed monthly at RMB 50,000 per month, resulting in a likely total of RMB 15 mln for bandwidth costs, not including server costs and other expenses.
A source inside CNTV confirmed that the company will open its broadcast streams to portal sites and video sites this year, as the result of cost pressures, rather than forcing sites to embed CNTV's own video player. "Internally, CNTV is exploring the scope and the overall environment for new media rebroadcast rights reselling," the source said, "as well as the scale of what this will bring in."
Reportedly, no portal sites have yet signed deals for any of the licensing packages. Tencent (0700.HK) had reportedly intended to sign a deal for Plan A, but is still in talks with CNTV regarding price, as Plan A also includes rights to the Euro Cup, which Tencent had already purchased from CCTV Sports.
In its Euro Cup 2012 coverage plan announcement in April of this year, Tencent said it would be CCTV's sole internet platform partner for the event.
A source inside Tencent revealed that CEO Pony Ma had announced internally that the company's goals for Olympic coverage would be: #1 in traffic, #1 in ad revenue, and #1 in influence.
Wang Yongzhi, Tencent's deputy chief editor, said that the company would invest several hundred million yuan in its coverage of this year's Olympics, with money going to purchase large volumes of servers and bandwidth, acquire exclusive champion interview content, and build a vast original content team. "Tencent will identify potential medalists and secure exclusive interviews with them," Wang said, adding that the company had already signed 80% of the necessary agreements.
Rival portal Sohu (Nasdaq: SOHU) will focus on competing through differentiation. Liu Chun, Sohu chief editor and COO of Sohu Video, will oversee Olympic coverage, and has arranged for Sohu Sports and Sohu Video to work in close concert. In addition to competing for event coverage rights and medalist media resources, Sohu will also debut a self-produced drama series, Xi You Lundun Ji (Unofficial translation: "Journey to the West End") (http://london.sohu.com/). The company has also joined with more than 30 major media outlets to form an Olympic reporting alliance for front-line interviews and reporting. Portal Netease (Nasdaq: NTES) meanwhile, will offer Lundun Shi Ri Tan (Unofficial translation: "Ten Days of Chats in London"), an original talk show hosted by deputy chief editor Yan Qiang.
Sina (Nasdaq: SINA) has not yet announced its Olympic strategy.
Editor's Note: For more information on this topic, please see "CNTV Won't Resell 2012 Olympics Broadcast Rights," MD 9/29/11 issue and "Netease Reveals 2012 London Olympics Strategy," MD 2/21/12 issues.
Keywords: Wang Yongzhi Pony Ma Netease Internet portal Tencent CCTV CCTV International Olympics Sina Sohu 0700.HK NTES CNTV Xia Xiaohui Liu Chun Yan Qiang broadcasting rights online video
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