Video platforms compete with the Olympic economy, who can catch this "sky-breaking wealth"?

With the arrival of the 2024 Paris Olympics, the battle for traffic among video platforms has become increasingly fierce, kicking off a commercial competition for the Olympic economy. This article will explore in depth how video platforms can use the Olympic Games, a global event, to attract traffic, improve user experience, and maximize commercial value.

Unlike the "relaxed feeling" of the explosive opening ceremony of the Paris Olympics, the battle for traffic outside the stadium has long been filled with smoke.

This year, Tencent, Migu, Kuaishou, and Douyin reached a cooperation with China Media Group on Olympic broadcasting copyrights, with long and short video platforms each accounting for half.

Now, the video platforms that have obtained the broadcasting rights are competing intensively to attract traffic, and Tik Tok has also joined the battle for Olympic traffic for the first time.

The entry of Douyin and Kuaishou has iterated the commercialization model of sports events.

Unlike the long video platforms that previously relied on advertising and broadcasting as their main monetization channels, the smooth flow of content and shelf fields on short video platforms, coupled with the linkage of local life businesses, have turned the Olympics into a "consumption field" for the whole nation to enjoy.

After the launch of models and gameplay such as "sports + e-commerce" and "sports + local life", can the platforms that have paid high copyright fees catch this "earth-shattering wealth"?

1. “Long-in, short-out”: Douyin and Kuaishou’s battle for traffic

As a global sporting event, the Olympics has always been an excellent opportunity for major content platforms to attract fans and traffic. The competition between video platforms is imminent, and behind the fierce battle for traffic is a grand battle for gold.

This time, four platforms won CCTV's broadcasting rights. Among them, Migu is the only live broadcast copyright partner. It has reached copyright cooperation with CCTV in the fields of public Internet and telecommunications operators, and will have rights including real-time broadcast, delayed broadcast, on-demand (including replay), etc. Tencent, Douyin, and Kuaishou have obtained the rights to cooperate in video on demand and short video copyright.

The reason why long and short video platforms are rushing to bet on the Paris Olympics is their thirst for traffic at a time when traffic has peaked and the growth rate of active users is slowing down.

In recent years, major Internet platforms have gradually reached bottlenecks in acquiring traffic and attracting new users. The Olympic IP, which contains huge traffic and commercial value, has become a card for video platforms to attract new users and alleviate traffic anxiety.

According to data from mobile data analysis platform QuestMobile, the scale of active mobile Internet users in China reached 1.231 billion in March this year. The growth rate of active users narrowed and the increase in users declined.

Among them, from 2020 to 2023, the combined monthly active account growth rates of WeChat and WeChat were 5.2%, 3.5%, 3.5% and 2% year-on-year respectively; the daily active growth rate of Kuaishou in the past three quarters (2023Q3, 2023Q4, 2024Q1) was 6.4%, 4.5% and 5.2% year-on-year respectively. Single-digit growth rates are becoming increasingly difficult to achieve.

Under the dual pressure of high broadcasting rights and dwindling traffic, the platforms holding the broadcasting rights have picked up the weapons they are good at and used "fancy methods to divert traffic" in order to seize the Olympic IP traffic to the greatest extent.

It is worth noting that this is the first time that Douyin has obtained the Olympic broadcasting rights, and it is also the first time that it has competed with Kuaishou in the Olympic broadcast.

Looking back at the changes in the rights-holding broadcasters of the past two Olympic Games, we can clearly feel the trend of "short-in, long-out". In addition to Migu's strong position in obtaining the live broadcast rights, the opening ceremony and event replays can almost all be broadcast in short videos.

This change will start in 2021.

During the 2016 Rio Olympics, CCTV began distributing online broadcasting rights to long video platforms such as Tencent and Youku. In 2021, in addition to Migu Video becoming CCTV's top partner for broadcasting the Tokyo Olympics, Kuaishou also appeared among the cooperating short video platforms, ushering in the era of Olympic short videos.

This marks the official entry of short video platforms into the game to share the resources of top sports events.

At the 2024 Paris Olympics, TikTok entered the game for the first time. In addition to CCTV, the platforms participating in the live broadcast and on-demand broadcast of the Olympic Games this year just showed that long and short videos each accounted for 50%.

For video platforms, sports are both an attractive cash cow and a powerful tool for attracting traffic.

As early as 2018, Douyin began to frantically buy sports event copyrights. That year, ByteDance and the NBA reached a global partnership and entered the track of major sports event rights for the first time. At that time, the NBA's digital media broadcasting rights in China were still exclusively held by the number one player Tencent Sports, while the short video rights were shared by Tencent, ByteDance and Weibo.

Since then, Douyin has become a partner of the 2020 European Cup and the 2021 America's Cup, and has won the broadcasting rights for the 2022 Qatar World Cup. This is a landmark event for Douyin in its fight for the copyright of world-class sports events.

Kuaishou started its foray into the CBA. In 2019, Kuaishou became an official partner of the CBA, and then in 2021, it officially became the official live broadcast and short video platform of the CBA league.

In recent years, Kuaishou has reached copyright and content cooperation with more than 50 international events such as the NBA, Champions League, NFL, MLB, etc., and has won the rights-holding broadcaster qualification for the 2020 Tokyo Olympics, the 2022 Beijing Winter Olympics, and the 19th Asian Games in Hangzhou in world-class sports events.

There is never a shortage of ambitious people in the circle of Internet mobile sports platforms, and Douyin and Kuaishou will not be the last.

2. Cost-effectiveness of Olympic marketing: long and short videos are different

The competition among platforms for the Olympic broadcasting rights depends largely on the commercial value brought by this world sports IP.

But you have to plant trees before you can enjoy the shade. Although the platforms did not disclose the price of the Olympic broadcasting rights this time, the copyright prices of top sports events have always been high.

According to public reports, the copyright fee for the 2016 Rio Olympics was as high as 100 million yuan. In the same year, PP Sports won the exclusive all-media broadcast of the Premier League 2019-2022 season for an astonishingly high price of 721 million US dollars, setting a record for the Premier League's overseas copyright; in 2019, Tencent won the 2020-2025 NBA China digital media copyright for US$1.5 billion; for the 2022 Qatar World Cup, there are reports that Migu and Douyin have spent more than 1 billion yuan for the broadcasting rights.

After obtaining the broadcasting rights, one of the most important forms of returns comes from brand cooperation.

Take CCTV for example, its marketing revenue from the Paris Olympics broke the record of all previous Olympic Games. Public data shows that up to now, nearly 50 companies at home and abroad have signed advertising contracts with CCTV for the Paris Olympics, including Alibaba, Nongfu Spring, Yili, Dongpeng Beverage and other companies.

World events are games of capital, and with the long-form video industry declining, the cost-effectiveness of broadcasting rights is becoming increasingly lower.

Since the monetization of sports event copyrights still mostly relies on copyright distribution and advertising revenue, the ideal model of relying on user payments to generate sustainable income has not yet become the main means of monetization.

Especially for long video platforms, which are already struggling to make profits, each company has begun to re-examine the return on investment of top sports event copyrights.

From Migu’s perspective, the long-tail effect of revenue does not seem to be good. According to the performance of the last Olympic Games, Migu Video had 36 million monthly active users during the Olympics, but after the Olympics, the number of users quickly dropped to 25 million, a decrease of 32.28%.

But short video platforms have their own path.

This was particularly evident in the Qatar World Cup and the Beijing Winter Olympics. Douyin and Kuaishou became a "portal" for world events, opening up the interconnection between user traffic and brand merchants' online e-commerce and offline stores.

The strong entry of Douyin and Kuaishou into the Paris Olympics is not only based on paying users, but also on the long-tail effect of active users in e-commerce and local life sectors. Kuaishou's achievements in the Tokyo Olympics and the Beijing Winter Olympics are also obvious to all.

Public data shows that the total number of views of Kuaishou's Tokyo Olympics-related works and topic videos reached 73 billion, and the total number of interactions within the platform reached 6.06 billion. During the Tokyo Olympics, the number of users who purchased goods on Kuaishou increased by 63.2% year-on-year, and GMV increased by 88% year-on-year; during the Beijing Winter Olympics, clothing and footwear, beauty and personal care, food and beverages became the top categories in terms of consumption, and the GMV of sports and outdoor products increased by 602% year-on-year.

The third quarter financial report of 2021 after the Olympics showed that Kuaishou's DAU reached 320 million, and the monthly active users increased by 66.7 million in a single quarter, the largest quarterly increase since the second quarter of 2020.

During the 2022 Qatar World Cup, Douyin’s live broadcasts of all matches had a total of 10.6 billion viewers and 1.3 billion user interactions.

For Douyin, which obtained the Olympic Games broadcasting rights for the first time this year, it almost mobilized the entire platform's e-commerce ecosystem to take on this wave of Olympic economic boom.

A relevant person in charge of Douyin said that Douyin e-commerce launched the "Hot Pioneer Season" theme event from July 20 to August 2. It will not only have official authentic 2024 Paris Olympic Games mascot "Frigee" peripheral products, but also Paris Olympic Games sponsor brands such as Procter & Gamble and Mengniu and Chinese national team sponsor brands such as Anta and Hisense participating in the platform activities.

ByteDance's Massive Engine has also begun to support the Olympics, creating "PICK My Sports Team" for different sports, and providing full-link commercial cooperation resources covering topics and searches to videos based on sports teams.

It can be seen that while top sports events can attract new users to short video platforms, more importantly, they can greatly increase user activity and improve the conversion efficiency of e-commerce and life service businesses.

On the other hand, Kuaishou stated that with the help of the 2024 Paris Olympics, it will further integrate e-commerce, local, commercial and other business ecological resources within the platform to create a new super consumption scenario.

Currently on Kuaishou, the combination of the two popular tracks of "sports + short dramas" and the top lineup of "famous directors + stars + athletes" will become a major attraction; "sports + e-commerce" will meet users' one-stop shopping needs of watching and buying through high-quality content identification and pre-embedded products; "sports + local" can promote user consumption and instant access to services through online and offline linkage in the OTO model.

Wang Qinglin, manager of the Ruidaheng Research Institute, told Business Data that in addition to distributing copyrights, advertising and other forms of capital recovery, short video platforms can use sports events to invite sports stars to join or increase the traffic of anchors, bringing more character IP linkages, program linkages, and video special effects linkages; they can also support the platform's sports brands and Olympic sponsors and other sales linkages, hold special events, and increase the platform's GMV; at the same time, it may also drive the creativity of sports champions' favorite brands, favorite restaurants, and other linkages with local life businesses.

3. The commercialization of the Olympics has begun, and the short video "consumption field" has begun

Unlike previous long video platforms that relied on broadcasting rights and interstitial advertising for monetization, the entry of Douyin and Kuaishou has opened the curtain on the Olympic "consumption field" and opened up new ideas for the commercialization of sports events.

In fact, there are three ways to monetize sports event copyrights: first, the platform obtains exclusive copyrights and then distributes them to B; second, the platform attracts advertising through live broadcasts and rebroadcasts of popular events; third, users pay for subscriptions to watch the events.

Since most of the monetization of sports event copyrights still relies on copyright distribution and advertising revenue, it is not easy for video platforms to achieve ideal results through the Olympics by increasing the number of new users, the activity of old users, and generating sustainable income through user payments.

According to data, Migu Video has previously spent tens of billions of yuan on the copyrights of five major competitions, including the 2020 Tokyo Olympics.

Precisely because the Olympic traffic is difficult to sustain, major video platforms have to try their best to broaden their commercialization paths and realize monetization. One of the means is to create an Olympic "consumption venue."

As short video platforms gradually improve their ecosystems in e-commerce and local life services, both Douyin and Kuaishou hope to leverage the Olympic Games’ marketing opportunities to create a “consumption venue” and bring more new gameplay and growth points to the platforms through the “sports + e-commerce” and “sports + local” models.

In fact, the path from sports events to e-commerce has been verified to a certain extent. Public data shows that during the Tokyo Olympics, the search volume of shooting champion Yang Qian's little yellow duck hairpins and carrot hair ties on e-commerce platforms increased by more than 100 times. During the Beijing Winter Olympics, derivatives such as Bing Dwen Dwen and Shue Rhon Rhon were also "hard to find".

Taking the 2022 Winter Olympics as an example, Bing Dwen Dwen has become a phenomenal Olympic mascot, bringing huge traffic and commercial value to related brands and businesses.

According to media reports, on the day of the closing ceremony of the Beijing Winter Olympics, the official online store achieved a single-day sales revenue of 266 million yuan. During the Games, offline retail sales also increased 10 times compared to the previous year, while online sales increased 450 times compared to the previous year.

It can be seen that Olympic mascots can not only bring income to businesses through their own sales, but also bring huge traffic and sales to the sales of peripheral products. And through Bing Dwen Dwen's sales of hundreds of millions of yuan, it is not difficult to see that the commercial value of derivative IPs such as Olympic mascots is also huge.

Although it is difficult to catch the huge wealth of the Olympics, it is still worth a try as it plays an important role in stimulating user activity on video platforms, supplementing high-quality content and traffic through user secondary creation and dissemination, and attracting advertising investment through influence.

It can be seen from this that the competition for the broadcasting rights of the Olympic Games content is actually a competition for the traffic and commercial value of the Olympic IP itself, as well as a competition for the commercialization of various IPs derived from it.

In addition, e-commerce models related to sports-related scenes and life service models linked to offline restaurants and clothing stores also bring a large part of the added commercial value to broadcasters, and can even bring long-term value such as user growth and paid conversion to some cutting-edge platforms.