The Tokyo Olympics kicks off today. How do Chinese companies dig money?

The Tokyo Olympics is late but still attracts gold.

The Tokyo Olympics was originally the Olympic Games closest to China in the past 20 years after the 2008 Beijing Olympics. Chinese tourists are also expected to become the largest group of overseas spectators for this Olympic Games. 

However, due to the epidemic, the Tokyo Olympics, originally scheduled to be held in 2020, have been postponed for one year. Until tonight, the Tokyo Olympics will officially open. 

Different from the crowds, shouts and cheers at the opening ceremony of the previous Olympics, there were no audiences at the opening ceremony of the 2020 Tokyo Olympics. Instead, the recording of the cheers of the audience at the previous Olympics was played in the opening ceremony. 

The Tokyo Olympics kicks off today. How do Chinese companies dig money?

Photo Source: Official Weibo of the 2020 Tokyo Olympics

The Olympic Games were held, but the epidemic is still affecting its progress. At present, the number of new crown cases in Tokyo is still on the rise. According to the information released by the Tokyo Olympic Organizing Committee, a total of 58 Olympic-related personnel were diagnosed with the new crown virus from July 1 to 19. 

Although the Tokyo Olympics is “untimely” and frequent accidents, it does not affect the gold-absorbing ability of the super-large IP of the Olympics, especially the rule that overseas audiences cannot watch the game live, which will stimulate more traffic to be diverted online Broadcast platform. 

This will stimulate the revenue of Olympic broadcasters to climb. Take NBC as an example. In March last year, it announced that it would broadcast advertisements during the Tokyo Olympics. The advertising revenue was worth US$1.25 billion. Therefore, NBC Universal CEO Jeff Schell said that the Tokyo Olympics may be a part of the company’s history The most profitable Olympics. 

Chinese companies are also aiming at this business opportunity. From broadcasters, brand sponsors, and agents, they have not stopped their “participation in the Olympics”. Until the eve of the Olympics, some domestic companies are still striving for opportunities to cooperate with the Olympics. 

As the best stage for brands to tell stories, the Olympic Games do not want to let go of the opportunity to “borrow light”.

The broadcast rights of the Olympic Games are still being scrambled for 

The postponement of the Tokyo Olympics provides Internet broadcasters with “tickets” for latecomers.

As we all know, the broadcast rights of the Olympic Games have always been regarded as “a battleground for military strategists.” Since 2008, CCTV will distribute Olympic copyrights to new media platforms, and there are many domestic Internet giants such as Tencent and Ali who participate in the purchase of broadcast rights . 

So far, the Internet copyright dispute of the Olympic Games has lasted for more than ten years, competitors have also changed several times, and the way of broadcasting the Olympic Games is gradually changing. It now appears that the weight of Internet companies in Olympic broadcasters is constantly increasing. 

Unlike the 2016 Rio Olympics, CCTV only announced that Tencent was the company that distributes the new media copyrights of the Rio Olympics seven days before the opening. The domestic broadcast rights for the Tokyo Olympics this year have been “famous.” 

On May 21, 2021, Tencent and Kuaishou two major platforms have successively announced their official cooperation with China Central Radio and Television Station to win the video-on-demand and short video rights for the 2020 Tokyo Olympics and the 2022 Beijing Winter Olympics, officially becoming the Tokyo Olympics and The rights-holding broadcaster of the Beijing Winter Olympics. 

Kuaishou and Tencent are actually late entrants. The first Internet platform player to get the “cake” of the 2020 Tokyo Olympics broadcast rights was China Mobile ‘s subsidiary Migu , which first reached a cooperation with China Central Radio and Television as early as December last year. 

At this point, the copyright structure of the Tokyo Olympics, including the Beijing Winter Olympics, has basically taken shape: led by CCTV, combined with China Mobile Migu, Tencent and Kuaishou three major network platforms. 

It is worth noting that although the three companies have the right to broadcast, the specific powers are not the same. Among them, Migu owns the live broadcast rights of the Olympic Games. Tencent and Kuaishou have not purchased the live broadcast rights with a larger amount, so they only have video-on-demand and short video rights. 

The prices of the three methods are different. Taking CNTV’s sale of the new media broadcasting rights for the London Olympics as an example, the distribution plan is divided into three categories: A package for a broadcast price of 55 million yuan (mainly including live broadcast + on-demand + CCTV programs), and category B 35 million yuan (live broadcast plus on-demand), and 28 million yuan for category C (on-demand). 

The willingness to pay determines the different styles of play. 

Although Tencent is not the first broadcaster to enter the Tokyo Olympics, it has a lot of experience. Since the 2008 and 2012 Olympic Games, Tencent has participated in Internet broadcasting related work; In 2013, Tencent became the only Internet service partner of the Chinese Olympic Committee; in 2014, it undertook the construction and daily operation and maintenance of the official website of the Winter Olympics bidding committee; After that, he won the internet broadcast rights for the 2016 Rio Olympics and the 2018 Pyeongchang Winter Olympics in mainland China. 

It can be said that in the field of long video, Tencent Video has become the main participant of the Tokyo Olympics with an absolute advantage. 

In addition to the coverage of all Olympic events and all events, Tencent has also borrowed its own multi-platform and Internet technology advantages to create diversified Olympic content, such as “Win Tokyo”, “My Family Have Champions”, “A Hundred Years Championship” and more than 40 Files of original video programs, which will attract more sports users to Tencent. 

Unlike Tencent, which has many big IP copyright operations experience, Kuaishou belongs to the Internet platform that participated in the broadcast of Olympic events for the first time, but it opened the “Olympic short video era” and explored the gameplay of Olympic sports content under the short video ecosystem.

According to official sources, during the Tokyo Olympics from July 23 to August 8, Kuaishou will broadcast all the games of the Olympic Games through on-demand, and release multiple innovative videos covering the pre-match to the entire event period. 

Unlike Tencent and Kuaishou, which are broadcasters of the 2020 Tokyo Olympics and the 2022 Beijing Winter Olympics, China Mobile Migu, which is on the rise, has invested heavily and won the 2020 Tokyo Olympics, the 2020 European Cup, and The rights and interests of the four major competitions of the 2022 Beijing Winter Olympics and the 2022 Qatar World Cup. More importantly, Migu directly bought the live broadcast rights of the Tokyo Olympics at no cost. 

The main reason that Migu is willing to spend such a large sum of money is that it is backed by China Mobile’s 5G commercial technology, which has advantages that other platforms cannot match. With the advent of the 5G network era, users have put forward higher requirements for viewing quality. The high-definition, smooth, and non-stuttering images have greatly improved the audience’s experience of watching sports events. In this regard, Migu also said that during the 2020 Tokyo Olympics, the main studio + XR studio will be built to bring the audience a more advanced watching experience. 

Why are Internet platforms vying for the Olympic Games broadcast market? 

The massive audience of the Olympic Games allows broadcasters to obtain sufficient exposure and advertising fees. For example, during the Rio Olympics, the daily active users, user stickiness, and installed capacity of the Tencent platform all increased several times.

But if you become an Olympic broadcaster, buying the copyright is also a big expense. Among them, the cost of copyright holding by CCTV is the most important factor affecting the price of copyright distribution. At present, CCTV has paid a total of approximately US$550 million in copyright costs for the four Olympic Games 2018-2024, which is approximately 3.6 billion yuan. 

The cost of winning the bid is so high, can the big pie of the competition for the broadcast rights of the Olympic Games bring benefits to the broadcasters? American TV broadcaster NBC believes that for broadcasters, the Tokyo Olympics may be the most profitable event in its history. Because of the need for epidemic prevention, many international tourists cannot come to watch the games. The Tokyo Olympics tickets have suffered heavy economic losses. The hotel, tourism, transportation and other industries have missed a lot of business opportunities, forcing traffic to flood the broadcast platform. 

This means that for major broadcasters and Olympic-related brand sponsors, the Tokyo Olympics is a good opportunity for “out of the circle” and “exposure”. In particular, this Olympics has the blessing of short video platforms, which may create more hot spots, and major cooperative brands can also “borrow the wind” and benefit indirectly.

Marketing war in full swing 

The Olympic Games is also a “gold rush” for advertisers to compete for marketing resources. 

It can be seen from the official website of the Tokyo Olympic Games that the sponsors of the Olympic Games are divided into four levels, namely the world’s top sponsors, gold partners, official Olympic partners and official suppliers. Among them, the world’s top sponsors have the highest ranking, and currently there are 14 companies, including Coca-Cola , Intel , Alibaba and other giants. 

The Tokyo Olympics kicks off today. How do Chinese companies dig money?

Olympic global partners, sourced from the official website of the Tokyo Olympics

The remaining three levels, including gold partner, Olympic official partner and official supplier, all belong to Japanese local sponsors, with a total of 67. 

It seems that the only Chinese corporate sponsor directly related to the Olympic Games is Alibaba Group. January 2017, Alibaba into the list of “Global Partner Program”, beat Amazon in the cloud computing and electrical goods category, join Olympic TOP cooperative partner row columns, sponsorship for a period of ten years. 

This means that in the three Winter Olympics and Summer Olympics from 2018 to 2028, Alibaba can use Olympic intellectual property rights, carry out marketing and other rights and related rights and interests on a global scale. According to the Beijing News , although Alibaba has not announced the specific amount, it is conservatively estimated that the sponsorship fee is not less than 800 million US dollars. 

In order to welcome the Tokyo Olympics, as the only Chinese company among the top sponsors of the Tokyo Olympics, Alibaba had specially formulated a set of marketing plans for this purpose. 

At that time, if according to the plan, from the start of the Tokyo Olympics to the opening of the Tokyo Olympics, various rhythms of marketing are intensive and orderly, Ali will deploy all resources to “all in” the Tokyo Olympics in 2020. 

The Tokyo Olympics kicks off today. How do Chinese companies dig money?

Taobao live broadcast “Golden Gas Station”, picture source Taobao APP

However, the sudden new crown epidemic has brought Ali’s Olympic marketing plan to an abrupt end. However, from the perspective of the cooperation cycle, the extension of the Tokyo Olympics only disrupted the marketing plans of related brands, and will not have much impact on subsequent cooperation. 

May 14 this year, Alibaba restart Olympic marketing “add oil Alliance ” program, Olympic marketing plan again in full swing. According to official sources, Tmall, Taobao, Alibaba Cloud , Tmall Global, Koala, Juhuasuan, etc. will all support and serve the Tokyo Olympics in a digital way. 

In addition, OBS Cloud, the Olympic broadcast cloud jointly created by Alibaba Cloud and Olympic Broadcasting Services, will provide broadcasters with cloud solutions. Alibaba Cloud will also provide cloud services for Olympic.com, the official Olympic website launched this year. 

The same is the official sponsor of the Tokyo Olympic Games the most praised help Toyota car, but before the opening ceremony of the “back down”, several other Japanese sponsors have already withdrawn the campaign. 

However, more Chinese companies are trying their best to “participate” in this Olympic Games. 

Many Chinese companies choose to focus their marketing on the Chinese national team and participate in the Tokyo Olympics by sponsoring national national teams. 

Qi Jiafu, the promotion director of Guowu Media , who has been in the sports industry for more than 10 years, mentioned to Time Weekly that the “empty Olympics” will have less impact on the domestic sponsors of the Chinese Olympic team, special sports teams and special athletes. 

Therefore, domestic companies that signed contracts with major Chinese teams have sprung up like mushrooms, and most of them are concentrated in the first half of this year. The Hanshu brand under the Summit Group has become the official partner of the Chinese National Swimming Team; Honor and Luzhou Laojiao have become TEAM. CHINA China National Team sponsor; Baidu Smart Cloud became the exclusive AI technology partner of China National Diving Team; VIVO became the official sponsor of China National Women’s Volleyball Team, and its sub-brand iQOO is the official sponsor of China National Rowing Team and Kayak Team …

Anta is also attacking in many ways, not only sponsoring the “Champion Dragon Suit” for the Chinese sports delegation’s award-winning equipment for the Tokyo Olympics, but also providing competition equipment and logistics for 10 Chinese national teams, including weightlifting teams, wrestling teams, and boxing teams, in 22 competitions. service. 

In addition, Anta will also provide members and staff of the International Olympic Committee with sports equipment including sports clothing, shoes and accessories, which can be described as “fighting” on the field all the time.

There are also companies that “curve to save the country”, through different marketing strategies, fancy sponsors the Chinese national team in all aspects of “food, drink, and clothing”. For example, the House of Swallows has become the designated bird’s nest product of the Chinese National Fencing Team, Sanyuan Extreme Milk announced that it will join the Chinese National Rock Climbing Team, and Luzhou Laojiao’s products have become the special celebration wine for the Chinese National Team… 

Senior sports consultant Zhang Qing once told Entrepreneur State that becoming a partner of the Chinese Olympic delegation, or a partner of the Chinese Olympic Committee, is the most realistic way for Chinese companies to participate in the Tokyo Olympics. 

In addition, policy changes have also made domestic companies more flexible in “telling the story of the Chinese Olympics” this time. In July 2019, the International Olympic Committee approved a revised regulation on the business rules for athletes. 

Under the new regulations, while guaranteeing the interests of official sponsors (brand parties that have directly reached sponsorship cooperation with the International Olympic Committee) during the Olympics, athletes and other Olympic participants are allowed to use and appropriately expose their personal sponsored brands and increase relevant sponsors. The opportunity to expose the brand in the Olympic Games. 

This means that in addition to official naming cooperation, more brands have the opportunity to use athletes or related organizations to cooperate to enter the Olympic Games exposure field. The Olympic marketing battle of domestic enterprises will also become more intense.

The Tokyo Olympics is late but still attracts gold 

Even with heavy ticket losses, the Tokyo Olympics, which opened today, still sucked money. 

In general, the main sources of Olympic revenue are broadcast, ticket revenue, sponsorship fees and licensed products (license fees), among which broadcast and corporate sponsorship (global partner sponsorship program) are managed by the Olympic Committee, sponsored by the host country, and others. The naming license project is managed by the host National Olympic Organizing Committee. 

Since Tokyo has announced that it will not accept foreign audiences, the ticket revenue for the Tokyo Olympics will be greatly reduced. 

Toshiro Muto, chief executive of the Tokyo Olympic Organizing Committee, once said that due to the fact that multiple Olympic events will be held empty, the Tokyo Olympics ticket revenue will fall from the estimated 90 billion yen (about 5.3 billion yuan) to billions of yen ( About 58.74 million yuan). 

The Tokyo Olympic Organizing Committee has also stated that all venues in Tokyo will be refunded. The Olympic Games sold a total of 3.63 million tickets to the general public. 

However, it should be noted that tickets account for a small proportion of the overall income of the Olympic Games. The two major fixed incomes of broadcasting and sponsorship are the core sources of income, accounting for 70% and 20% of the overall income respectively. And these two parts of funds, the International Olympic Committee before the Olympic Games, has already been collected.

The Tokyo Olympics kicks off today. How do Chinese companies dig money?

Part of the video of the Tokyo Olympics, from the official website of the Tokyo Olympics

According to Reuters, before the announcement of the postponement of the Tokyo Olympics, the contract value signed by the Tokyo Olympic Organizing Committee and sponsors exceeded US$3.3 billion, three times as much as the 2008 Beijing Olympics held in Asia. 

Although more than 10 Japanese sponsors have announced their withdrawal from the Olympic Games and will not place Olympic-related advertisements in Japan, their sponsorship fees will not be refunded, which is a voluntary waiver of Olympic rights. 

As for the revenue of broadcasting rights, according to the Nikkei Chinese website, the total broadcasting rights fees for the Tokyo Olympics are around 300 billion yen (approximately US$2.73 billion). 

In other words, only the sponsorship fee and the broadcast fee, the Tokyo Olympic Games has already attracted 6.03 billion US dollars. 

The Olympic Games’ ability to attract gold continued throughout this year.

Since last year, some companies have successively sought cooperation with the Tokyo Olympics. 

In July of this year, Chaoxi Guangnian won the exclusive agency of the only officially authorized mobile game “Sonic at the 2020 Tokyo Olympics” in Mainland China for the Tokyo Olympics. 

Although the postponement caused the Olympic Games organizers to pay more costs, they also suffered a lot of losses. But in general, it is much better to postpone and hold the Tokyo Olympic Games empty venues than to cancel them outright. 

According to estimates by the Nomura Research Institute of Japan, if the Tokyo Olympics is held normally, it can bring about 1.81 trillion yen (about 17 billion US dollars) in economic benefits. If it is closed, the number will of course return to zero. 

The normal holding of the Olympic Games also gave sponsors, suppliers and related service industry chains an opportunity to “recover blood”. 

Among the various competition equipment used in the Tokyo Olympic Games-related events, about 50% to 60% come from Chinese suppliers . As a supplier of the Olympic Games, not only can they obtain economic benefits, but they also value the most important brand exposure opportunities. 

The Olympic Games is at the top of the pyramid in all sports events. Although it has been postponed for a year, its attention and ability to attract gold are still strong. This event will also become the hottest traffic pool this summer, attracting the attention of the world. 

(The picture at the beginning of this article shows the Tokyo Olympic venues, from the official website of the Tokyo Olympics.)

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