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China Loves the NBA and Tencent is Making Sure the Love Continues via Mobile and Online Channels

by Adam Thorwart | Feb 10, 2015

Before getting into the particulars of how the NBA and Tencent each benefit from this partnership it is important to note that the NBA has a rich history in China. Dating back to 2006 (yes that was 8! years ago and I was still in high school) the NBA and Lenovo officially announced a partnership where Lenovo became the official PC sponsor of the NBA in the US and China. And in 2013, ZTE became an official partner with the Houston Rockets and with NBA China. Even the NBA players themselves are reaping the benefits of their exposure in China. Kobe Bryant, for example, sold millions jerseys and other merchandise in China throughout his career which included the height (no pun intended) of the Yao Ming era – who was the 7’ 6” center drafted #1 overall by the Houston Rockets in 2002. According to the NBA, Kobe was 4th in jersey sales in China in 2005, just behind Ming who was 3rd, however Kobe went on to be the top selling jersey in China for at least the next four consecutive seasons.

Now fast-forwarding to the present, the NBA and Tencent official announcement on January 30th 2015, revealed a new 5-year partnership that doesn’t come into effect until July 1st 2015. Through this deal Tencent and the NBA will increase content packaging by adding more original broadcasting of NBA events (i.e. more pre- and post-season games and stat/highlight packages) in China. Additionally, Chinese consumers will now have the ability to subscribe to the NBA League Pass where subscribers have access to a full season of live and on-demand games. Because of the time difference - a 7:30 pm tip-off in Boston is a 6:30 am tip-off in China – the on-demand feature is instrumental in providing the NBA with another level of visibility in China as subscribers can now watch games at their leisure rather than having to watch live with limited to no other options for playback. What does this deal provide each side?

From the NBA perspective: According to David Shoemaker – the CEO of NBA’s China branch – this expanded partnership with Tencent provides an outlet for the league to reach “hundreds of millions of daily users” across its multiple platforms, most of which had previously been untapped. This deal includes Tencent launching an interactive game for its game platform as well as the NBA Game Time mobile application that allows users access to extensive video highlights, news, and stats on a mobile device.

The NBA already has a substantial audience outside of North America. Recent stats highlighted by the league include:

  •  Game broadcasts in 217 countries and 47 languages.
  • Merchandise sales in more than 125,000 stores in 101 countries.
  • NBA.com sites recorded 26.9 billion page views during the 2013-2014 season; half of which were outside of North America.
  • The NBA is the No. 1 professional sports league on social media, with more than 750 million likes and followers globally across all league, team, and player platforms.

The Tencent perspective: According to Strategy Analytics’ Digital Media Dashboard the OTT video subscriptions in China will grow to almost $250 million by year-end 2015 and then to nearly $350 million by year-end 2017. With consumer spend increasing, for at least the next 3 years (and likely for all 5 years of the partnership), it makes sense for Tencent to secure the NBA rights, right now. Additionally, Tencent will now assume responsibility for the NBA’s social media presence on WeChat, QQ, and Qzone platforms. Currently one of its chief competitors – Sina Weibo – occupies real-estate on the NBA China website showcasing its 32 million followers and presumably after the exclusive deal starts Tencent’s platforms will replace any competitors on the site.

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