Sports network ESPN will have a presence on Chinese online video provider Tencent's platform following a deal between the two companies. Under the agreement, ESPN will create and distribute locally-focused live sports content in China across Tencent's digital platforms.
The deal gives ESPN access to a "huge pool" of online viewers in China, SY Lau, senior executive vice president of Tencent and president of its online media group, said. "Every single day, hundreds of millions of people watch streamed sports games and read sports news on Tencent."
For Tencent, the deal will help it bring high-quality sports and related content to its customers. "It will accelerate Tencent's development as a comprehensive and professional digital platform and set benchmarks for the Chinese sports media sector," Lau said.
Tencent competes with retail giant Alibaba, which launched an SVOD service last summer in mainland China, in an OTT market worth at least $6 billion. To keep pace with consumer demand for content and competitive pressure, Tencent has scored distribution deals with other U.S. companies including HBO. Another competitor, Sohu, distributes select Netflix (NASDAQ: NFLX) series like House of Cards in China.
ESPN's visibility on the OTT service will begin with live coverage of the 2016 NBA Playoffs, where its experts will provide analysis on-site, in Mandarin Chinese, of five games per week. This will be the first time that Chinese-language live analysis has been available during the playoffs, CNN Money said.
Chinese viewers will also be able to watch March Madness games exclusively on the streaming service, along with more than 100 regular-season college basketball games. The X Games is also on tap for Tencent subscribers.
ESPN's expansion into mainland China comes at a critical point for the network. In the U.S., the sports broadcaster has been under scrutiny by industry analysts and pundits who question its high per-user retransmission fees versus the value of its content. Getting access to a new viewer base numbering in the hundreds of millions could provide a nice boost to its revenues as well as putting it on the front edge of U.S. media companies, like Netflix, that are looking for a profitable entry into China.
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