Who cares about the Chinese consumer? That’s not something you’d expect to hear from the typical chief executive. Most are increasingly focused on their plans to capture a greater chunk of the China market.
So some kudos must go to Richard Scudamore, chief executive of the self-proclaimed richest football league in the world, the English Premiership.
Because that’s what he appeared to be telling the UK’s Daily Telegraph last month, as the new English football season began. “Cracking China is a non-essential for the Premier League,” he confided.
No doubt some will see it as further proof of the commercial appeal of English top-tier football elsewhere in the world. An abundance of television rights riches means that missing out on a few hundred million Chinese doesn’t really seem to register.
Still, some critics think more could be done in China and point to the exclusive three-year deal signed in 2007 with pay-TV operator WinTV as something of an own goal.
At the time, expectations were high. WinTV president Song Zheng was particularly bullish in his “Say goodbye to free Premier League. No more free lunch in future” assessment.
But saying goodbye to the football viewers might have been a more appropriate vision, as audiences soon plummeted from the tens of millions to the tens of thousands.
The deal, in which WinTV planned to sell digital access through local cable networks, did generate another $50 million for Premiership coffers. But most fans balked at the proposed Rmb188 ($28) monthly subscription fee, especially when they were used to free-to-air access. It also cost a lot less to buy bundled packages incorporating a series of channels elsewhere.
Prices were later reduced, but it has proved tough to boost sales – CBN Weekly claims that at least two thirds of the country still lacks access to a digital signal. So Song turned to the internet but then had problems with the quality of online transmission. Then he tried deals offering free sign-up on newly purchased television sets.
More progress was made selling match coverage through bundled packages offered by set-top box operators, although this meant sharing revenues. And although exact subscriber numbers are unclear, they still seem to have stalled at a fraction of the free-to-air market.
So with a season left on the deal, WinTV has changed direction again and is selling fixed numbers of games per week (plus highlights packages) to a series of free-to-air channels.
Games will again be offered on the internet, with Sina.com and QQ.com both announcing live streaming of matches. China Youth Media, which operates a campus internet TV network for 45 million students, is also publicising a deal.
WinTV says that the new arrangements will generate demand for the fuller subscription arrangements, and that it is serious about renewing its exclusive relationship with the Premier League.
Others see it as more of a last ditch attempt to recoup earlier losses. They wonder too why the Premier League would want to restrict audiences in this way and compare its approach with that of the NBA, which has traditionally given away its television rights for free but then reaped returns in sponsorship and merchandising. Perhaps it is no coincidence that China is generally thought to be one of the few countries in which basketball is ahead of football in the popularity stakes.
The Premier League argues that it cannot copy the NBA approach – where ownership of the team franchising model makes for a very different business proposition. Instead, it has thrived on cutting lucrative TV deals rather than merchandising and sponsorship sales.
In fact, at the moment the League doesn’t even have a shop (or an office) in the country.
Still, Scudamore seems unperturbed. China is not a “mission critical” situation.
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