Market Insight

NFL and Tencent ink content deal to boost audience

September 01, 2017  | Subscribers Only

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The US National Football League (NFL) and Tencent signed a deal on 21 August, which gives the Chinese internet giant exclusive rights to digitally stream games online in China for three years until 2019. Details of the financial terms were not disclosed.  

Tencent will be the official digital partner to stream both NFL live sports and on-demand content, including NFL’s Monday Night Football games, Thursday Night Football games, Sunday Night Football games, Post-season games, and Pro Bowl and Super Bowl. The deal also includes programming rights to the NFL Draft, NFL Combine, and NFL Game Day.

The NFL content will be streamed across a range of Tencent’s mobile and desktop platforms. These include Tencent Sports, Tencent Video,, Kuai Bao, Penguin Live, Tencent Sports app, Tencent video app, Tencent News app, QQ, and its flagship Weixin, aka WeChat. Weixin and WeChat collectively commanded more than 960 million monthly active users at the end of Q2 2017.   

Our analysis

Sports have always been a key pillar of Tencent’s content strategy

Tencent is a leader in acquiring sports rights, and the NFL deal is the third American digital partnership that Tencent has secured. Tencent has previously signed a digital partnership with the National Basketball Association (NBA) for five years in 2015, one of the most popular sport events in China, and the National Hockey League (NHL) for five years in 2017. IHS Markit expects Tencent to sign more deals with other sports content owners.

Acquiring foreign sports right is part of a wider content strategy to retain users or encourage users to spend more time with Tencent’s various platforms. The Chinese video advertising market is currently dominated by Baidu iQiyi, Alibaba Youku Tudou and Tencent. Collectively they control 73.8 percent of the Chinese online video ad market. Facing fierce competition, exclusive content remains as ever a distinctive feature for online platforms to differentiate themselves from competitors and to retain users.

Leading online video platforms have invested heavily in both content acquisitions and developed original video content. Foreign content acquisition usually promises a high viewership, particularly programming from the US and the UK, as well as South Korea and Japan. However, Chinese media owners are subject to heavy Chinese government regulations, which limit foreign content on a platform to no more than 30 percent. On the contrary, there are fewer restrictions on foreign sports content in China, which provide a lucrative funding opportunity to advertising properties.

Being the third largest online video player in China, with many live-streaming and video on-demand platforms, and its hegemonic position in social media, Tencent offers a large audience to advertisers. Online advertising revenue is increasingly becoming an important source of revenue for the social media giant, it made up 17.8 percent of its total revenue in 2016, compared to 10.5 percent in 2014. Tencent’s online ad revenue grew 54.4 percent in 2016 year-on-year, of which online video totalled to CNY 5.0 billion, 74.0 percent growth year on year. With additional ad inventory for both for banner and online video ads, the social media giant is on track to another year of strong growth. We expect Tencent’s video ad revenue to grow by 62.0 percent in 2017.

NFL is bidding for higher viewership abroad

As for NFL, the deal comes amid its declining TV viewership.  According to Nielsen, a US TV ratings company, NFL games viewership declined 8.0 percent from the previous season. The decline was partially caused by audience saturation and also caused by the shifting viewing habit from TV to online.  Within this context, China is an ideal market to benefit from the digitisation of sports viewing and expand NFL’s audience base as the Asian country has almost 1 billion online users.

This is not the first time that NFL has tried to push into the Chinese market and the Chinese community. Previous efforts including creating reality TV shows with a Taiwanese pop band, it also signed a deal with another Chinese social media company Sina to stream a single game, and it sold broadcast rights to Chinese provincial TV channels. However, the latest deal with Tencent is NFL’s biggest push in China.

American football is not as popular as NBA and European football in China and thus choosing its domestic partner will need some strategic calculation.  Tencent’s dominant position in the Chinese social media ecosystem makes it an attractive partner for any foreign content company. That’s why after an initial partnership with Sina, which also offers video content, NFL has opted to form alliance with Tencent instead. Tencent’s 960 million monthly active users, triple the US population but only two thirds of the Chinese population should help NFL to expand its reach.

Going forward we expect the role of sports in online advertising to become even more important, and partnership between sports content owner and social media will increase.  


China USA
NFL Tencent
Research by Market
Media & Advertising
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