With popular global sporting events like the European Football Championship (UEFA EURO) and the Rio Olympics driving momentum, there is no doubt that 2016 has been a year of sports. It is also a year in which China’s internet industry has thrived. The competition in the personalized news app market that began in 2015 has evolved into a content war in the overseas market, while personalized recommendation technology is being used in more and more applications. Short video blogger Papi’s successful fund raising inspired a myriad of short video content startups. 2016 also saw a fierce battle between live streaming app developers centered around technologies, content and social features.
At present, most sports apps in China have already quietly added a wide range of features, including personalized news, video, live streaming, statistics and real-time rankings. Sports apps are utilizing advancements in the mobile internet, while mobile internet companies are sparing no effort as they advance into the sports industry.
1.Sport Apps Ranking in China
Using data from libra, Cheetah Mobile’s big data analysis platform, Cheetah Global Lab has compiled a list of China’s top sport apps based on the number of active users. (Note: Exercise apps are not covered in the current study.)
Cheetah Global Lab categorizes sports apps into three types:
The first type consists of sports statistics apps which users download to check scores. These apps constantly update stats and push game scores and team rankings to users. This is the most basic type of sports app, and because these apps generally lack language or cultural barriers, they have attracted users from all over the world.
The second type offers comprehensive sports content, including statistics, video clips, in-depth analysis and live streaming. Right now the No.1 sports app in virtually every country falls into this category. However, it is hard for these apps to go global because of the difficulty in localizing content in other markets. This type of app also includes apps specifically designed for and therefore named after a single sporting event, such as EUFA EURO, America’s March Madness and the Indian Premier League. These apps rapidly gain traction as an event is in progress, but fade out as soon as it’s over.
The third type is pure live streaming apps.
The competition in this app category mirrors the ongoing content war between all of the major internet companies—content is king.
2. Case Studies of China’s Sports Apps
Based on the above sports apps rankings, we can see China’s internet giants looming in the sports app market.
LeTV has been heavily investing in sporting event copyrights ever since it was founded. In August 2016, LeSports renewed the 2016-17 game broadcasting rights with the England Premier League and invested in WSG, Asia's leading sports marketing, media and event management company. Its efforts in the live streaming market have also helped pave the way for its sports business. Lastly, LeTV’s strategic cooperation with China Sports Media Ltd., which owns the broadcast rights to the Chinese Football Association Super League games, provides the company with an additional advantage over its competitors.
Just like LeTV, Tencent’s strategy in the sports business is "purchase broadcast rights + build live broadcasting infrastructure." In May 2015, Tencent paid 500 million USD for the exclusive online broadcast rights to the NBA for the next five years. According to Cheetah Global Lab’s Report on Global Live Streaming Apps, there are 11 live streaming apps associated with Tencent. On the one hand, this is part of Tencent’s efforts to maintain its domination in China’s SNS market, while on the other hand, the company is establishing itself in the live sports broadcasting business.
Both Tencent Sports and LeSports feature live streaming on their front page, which shows that their major investments in the sports app segment consists of buying online broadcast rights and then live streaming the content. In contrast to LeTV and Tencent’s intense race to be the no. one sports app by acquiring broadcast rights, Sina Sports, the traditional leader in the sport media business, is stagnating in this market.
Sina was the leader in sports websites back when news portals were dominating the web. Sports content was an important part of the Sina media portal and Sina spun off a vertical app, Sina Sports. However, Sina Sports is in an awkward position now since other companies have licensed most of the popular sports content. On the other hand, Sina’s talents on the sports business are also being lured to other internet companies.
Rich Person’s Game
Judging from the amount of money spent on sports copyrights by Tencent and LeTV, it’s safe to say that this business is a game for the rich. Small app developers can’t afford to buy broadcast rights which makes it hard for them to survive in this capital-intense market. According to data collected by IT Juzi, more than 200 sports app developers had received funding as of November 2016, but only three developers were post-Series B—Zuqiu Mofang and LeTV Sports obtained Series B funding and Dong Qiudi received Series C. Perhaps these three apps have only risen so high in the rankings because they are well funded.
3. Internet + Sports User Profile: Competition for High-Quality Paying Users
There are two reasons that sports app publishers are spending huge sums of money to fight for what are known as "high-quality users."
a. Sports apps are vertical apps, and vertical apps in general have specifically targeted user groups and therefore have higher conversion rate, both in terms of advertising targeting and monetization.
b. Sports fans generally have high purchasing power. Fans not only buy tickets to games, but sometimes they travel to other cities, or even other countries to see their favorite teams play. It’s a big investment of time and money. If publishers are able to attract these consumers to their mobile platforms, they can offer a variety of in-app purchases, such as game tickets, transportation and merchandise.
According to libra, of the 20 most used apps by LeTV Sports users, Baidu Map, Alipay, JD.com, LeMall, Meituan, Didi, Taobao, Wechat and QQ all have payment features. In addition to shopping and payment apps, these users also prefer transportation apps (maps and taxi hailing), entertainment apps (video and social) and news apps.
SOURCE: Cheetah Global Lab, as of september, 2016
The above graph shows the percentages of users who are willing to pay for sports content among different age groups.
As for future trends, although young users generally have lower incomes than users aged 30-35, they are actually more willing to pay for content, and this percentage is likely to increase in the future.
Most sports app users are male. The ratio of male to female users is higher than 5:1.
4. More Sports Users Are Hidden in Other Apps
The penetration rate of sports apps is relatively low with ample room for growth. This does not mean that sports fans are not yet mobile internet users, but rather, there are too many other app categories with sports features.
Cheetah Global Lab did a survey during the Olympics, asking users how they got sports information through their mobile phones, and the results showed more than 85% of respondents receive sports news through their mobile phones.
Personalized news apps are the most common way that sports fans consume sports information. Most news apps now have the same personalized recommendation, video and live streaming features as sports apps, except with broader coverage and more comprehensive information. At the same time, internet users also like to read sports news and discuss related topics with other people on social media.
5. Internet + Sports Industry Trend: Vast Industry Chain
Sports have been loved by people all over the world for decades, which basically guarantees the monetization outlook of sports-related businesses. Traditionally, sports, along with politics, economics, entertainment and culture, are all irreplaceable industries. As the internet continues to permeate every facet of our lives, certain trends are emerging with the convergence of sports and the internet.
a. Sports and Internet are Becoming Integrated in More Areas
The sports ecosystem is booming and the internet is a big part of it. We’ve seen the internet revolutionize the dining, transportation and movie industries through the O2O model, and there is no doubt that the internet will bring further changes to the sports industry as well. The internet is a great tool that can be utilized in every link of the sports industry value chain, be it sports team operation, sports star commercialization, sports field management or ticketing services. Therefore, investors are betting big on startups with the concept of "Sports +."
China is paying more and more attention to and reinforcing the protection of intellectual copyrights. Generally speaking, whoever acquires the most copyrights will win the news, video or sports live streaming markets. Traditionally in China, the competition for broadcast rights has been fought among the TV networks, but now Tencent and LeTV have joined the battle, showing the sports market the power of the internet.
Ticketing and E-commerce
In the same way that travel apps and movie review apps brought ticket sales online, sport ticket sales and ticketing features will likely be added to apps with sports news and other information. Once users become accustomed to in-app purchases, app can add other e-commerce services, which represents a much larger opportunity for app publishers. Specifically, apps can add sports equipment sales, team merchandise and even lottery services, if policies permit.
In the beginning, the combination of internet brands and sports primarily manifested in the sponsorship of major overseas sporting events by mobile phone brands for the purpose of increasing brand awareness. But now in the domestic market, internet companies are adopting a similar strategy. LeTV acquired a stadium and named it the LeTV Ecosystem Center and Bilibili sponsored a Chinese basketball team, both were meant to promote their brands.
Big data and machine learning are the mainstream trends for the future of the mobile internet. As we mentioned before, sports apps attract high-quality users whose big data has great value. Within a comprehensive sports app, users can read articles, watch videos and make payments. Using the data of these user activities, app operators can deduce users’ interests, habits, travel schedules and purchasing power.
Big data can also be used in the sports lottery business. Currently one of the top ten sports apps in China is a lottery-focused app, and if policies permit, lottery could become a segment with huge opportunities. With big data, apps could predict who will win and even predict the scores.
Multi-Dimension Integration of Sports, Internet and Verticals
Take the hottest trend in China’s internet market – bicycle sharing through a mobile app – as an example. Even this has numerous ways in which to integrate with the sports industry. Bicycling as we know is a sport. Currently people are using bicycle sharing apps for short-distance transportation, but the apps have the potential to become communication platforms for the bicycling and sports community. On the other hand, sports and outbound traveling have the potential to integrate with each other as well. One-stop services for Chinese tourists traveling overseas including ticket sales, visa applications, hotel and flight booking would bring convenience to sports fans.
b. Vertical, High-end Sports Apps Emerge
As China’s economy grows rapidly, high-end sports like Golf and Formula-1 start are becoming more and more popular. The opportunities provided by these sports is huge in areas such as ticket booking apps and vertical sport apps. On the other hand, there will also be comprehensive apps developed specifically for a single sports event. For example, official apps for this year’s UEFA EURO 2016 tournament and the Rio Olympics had top rankings when the competitions were in progress.
Note:Active penetration rate = app WAUs/Germany’s total mobile WAUs, as of 19, june of 2016
We can tell from the names of the three apps—EC App 2016: Live Scores, EC 2016 Match schedule, and UEFA EURO 2016 Official App—that they were specifically designed for the UEFA EURO 2016. In June, when the games were being played, these three apps ranked No.2, No. 5 and No. 6 in Germany’s sports apps rankings. Then, as expected, when the games were over, these apps quickly faded out.
c. The Internet Makes Sports "Intelligent"
The advancement of technology will eventually be manifested in the sports industry. Google, Baidu and internet companies both big and small are all developing autonomous cars, which could create new sports altogether. Alibaba, LeTV and many startups are pursuing VR technologies, and when the VR technologies are ready, they will change how people watch sports, giving fans a more direct experience than what TVs, computers and phones currently offer.
We’ve been amazed by how the internet has changed our lives over the years. Whether we watch games on TV by ourselves, in a bar with strangers, or watch them on a computer, iPad or phone, advancements in technology are changing how we experience sports. As the market landscape of sports IPs becomes more and more clear, our relationship with sports will reach a new high.
1. On August 2016, Cheetah Mobile’s Big Data platform libra (formerly Appinsight) officially expanded its data sources, significantly increasing the amount of available data, including DAU, WAU, MAU, new installation rate, retain rate, etc. providing a more comprehensive and accurate picture of the app market. Based on this data, Cheetah Global Lab will be able to provide more authoritative and accurate mobile internet industry reports.
2. Unless otherwise noted, the data in this report is taken from Cheetah Mobile 3.5 billion installations and 612 million MAUs worldwide.
3. Cheetah Mobile collected all data legally, in accordance with all relevant laws and regulations.
4. Libra’s data are limited to the user scope and distribution of Cheetah Mobile’s products and are limited only to the Android platform.
Libra (formerly appinsight) is Cheetah Mobile’s world leading Android data analysis platform. Libra utilizes data from nearly 50% of the world’s Android users and leverages Cheetah Mobile’s Big Data technology to perform deep dive research and analysis. Through analysis reports, data products and cases studies, libra provides users with insights into the changes and trends in the mobile internet market.
Log into the official platform at libra.cmcm.com to get even more data information!