Song Zheng, CEO of Tiansheng Media: The promotion of pay-per-view mode of premier League has become the public enemy of fans
At 2pm on February 12th, 2007, Tiansheng European Football Channel held a press conference in Beijing to officially announce the acquisition of the exclusive broadcast rights of the English Premier League for the 2007-2010 season.That means fans in mainland China will have to pay to watch the Premier League in the next three years.Package 188, package 1880 (later reduced to 588), but also install the price of thousands of yuan of special set-top box.For a time, Tiansheng media CEO Song Zheng became the target of public criticism, public enemy fans!Before 2001, ESPN bought the rights and distributed them to TV stations across the country.Domestic TV stations pay lower costs, some directly take advertising time offset copyright fees.As a result, football fans will be able to enjoy premier League football through free public channels.However, with English royalty rates rising at home, the premier League authorities are reluctant to sell overseas rights too cheaply.In November 2006, the Premier League made a reference offer of us $100 million for three seasons in mainland China, hoping that television agencies would “bid”.There were six international media giants in the bidding, but the price was well below $100 million.According to reports at the time, ESPN offered $35m, compared with $50m for the newly formed Tiansheng European Football Channel.Although the bid was not an easy one, the premier League officials opted for the highest bidder.Tiansheng side to “commercial secrets” on the grounds of “50 million” this price is not whether or not.A few years later, Song revealed that the figure was $36.8 million.Such a high price is impossible to recover through advertising, only pay to watch this way, and Tiansheng is ready to do so.Song Zheng, born in 1968 in Shanghai, graduated from the Directing Department of Shanghai Theatre Academy.His original dream was to shoot high quality art films, participate in major international film festivals, and become a master director.Song Zheng also made efforts to this end. In 7 months, he almost went to all the counties in Guizhou to collect wind and shot 6 films.Of course, his films are not very formal and you can’t find them on Douban or other professional websites.One of the films won an award, and Song zheng got a chance to study in the United States.In 1996, Song zheng and Jiang Nanchun teamed up to buy the domestic broadcast rights of the Tyson/Holyfield fight from tang Jing, a shrewd broker, at a low price of $50,000, and then sold it to a local TV station, earning their first fortune of 1 million yuan.Tyson’s $30 million appearance fee for the fight is undigestible through advertising, relying on user fees.With a price tag of $50 – $60 and 8 million subscribers in the US, it generates over $400 million in revenue.The experience opened his eyes to the idea of bringing pay-TV to China;But at that time, the domestic cable TV network has just been built, the hardware facilities are not mature.Song went on to do the business of distributing sports rights, handling la Liga, France’s Ligue 1 and the World Youth Championships.In 1999, Song moved to Hamburg, Germany, where he lived in semi-retirement.In 2005, Jiang nanchun’s Focus Media was listed on NASDAQ, which made the elder brother also itching to re-establish a new career.By this time, the PREMIER League had been broadcast on the mainland for more than a decade, with 30 million regular fans.That’s the equivalent of nearly half the population of the UK, making premier League officials salivate.The original copyright fee is 100 million pounds a year in Asia, mainly relying on Hong Kong, Southeast Asia and other places to recover costs.Fans are crazy about the English Premier League, and the habit of paying for it has been formed.Under the new broadcast cycle, the PREMIER League has divided the whole of Asia into market segments to maximize profits.In Hong Kong, China, which has a population of just over 7 million, it was sold for 200 million US dollars. What kind of market potential will it have in Mainland China, which has a population of 1.3 billion?Song Zheng felt this was an opportunity to put his dream of many years ago into practice.On March 31, 2006, Tiansheng (Shanghai) Digital Television Development Co., LTD., under which he served as chairman and CEO, was registered.The registered capital is usd 5 million, and the enterprise type is LIMITED liability company (wholly foreign legal entity), and the sole shareholder is “EUROSOCCER DIGITAL TV HOLDINGS LIMITED”.The foreign shareholder penetrated further, and media speculated that it was mainly a group of venture-capital institutional investors, possibly including jiang Nanchun, his former partner.Song Zheng Taboo about this, said in an interview, is his circle of more successful individuals: “we are taking their own money to do investment, will not take their own money joke.”Later documents show some of the company’s financing: IDG invested $20 million in 2006;In May 2007, Haina Asia invested $15 million, Goldman Sachs $10 million, IDG additional $5 million…The foreign-funded company could not obtain a domestic TV business license, but was authorized by Guangdong Nanguang Media Digital TV Co., Ltd. to “take charge of the nationwide marketing and promotion activities of Guangdong TV’s European Football Channel.”The fans are very dissatisfied with the sudden emergence of the Tiansheng company and Song Zheng, if it were not for their interference, the copyright of the English Premier League would probably fall to ESPN, but also can continue to watch the free English Premier League.Song denied this, saying that if foreign big TV companies had acquired the rights, they would still have to pay for them, possibly at a higher price.His ambitions go beyond the Premier League to monopolise the rights to as many high-profile football games as possible.Song announced at A launch ceremony in Guangzhou, A day before the opening of the Premier League season, that he had secured the rights to broadcast Serie A packages for the next three years.Serie A officials are less short-sighted, dividing the year’s 380 matches into A and B packages.The B-pack, consisting of two games in each round and a total of 68 games, was sold to CCTV at a relatively low price and allowed fans to watch it for free.However, milan, Juventus and other strong teams are placed in the A pack, must pay to watch.His ambitions are not confined to football or sport.Tiansheng invested 40 million yuan to establish a national largest digital TV channel call center in Nanning, collecting customer information according to users’ watching behavior, and carrying out accurate marketing for other businesses in the future.This is similar to the personalized recommendation idea of “thousands of faces” in the era of mobile Internet!Remember, 3G licences had not yet been issued.06 Perhaps the road before too smooth, Song Zheng is very conceited, often put himself on the opposite side of the fans.In his and Tiansheng’s dictionary, there is no “fan”, only “user”.This attitude angered fans, who posted on major forums to boycott Tiansheng and curse the company for bankruptcy.Mr Song ignored all this and followed Mr Murdoch’s example.In the early days of the Premier League, Rupert Murdoch’s Sky paid six times as much for the rights and introduced a pay-per-view model.English fans took turns carrying coffins, burning portraits and throwing eggs before reluctantly accepting the protests.A few curses from fans did not hurt Song, but providing links to sources of piracy on the Internet did harm to his interests.However, Song faces more than fan resistance. He also faces practical operational problems.$50 million for naked signals, a Chinese version, and some of the best commentators in the business.As Guangdong has the largest number of premier League fans, cantonese commentary is required.Local sports stations lost the broadcasting rights of the English Premier League, so they had to look for other matches to replace them, such as the cheap Ligue 1, The Netherlands and the SPL, which had mediocre ratings and affected their advertising revenue.Local cable networks, which have close interests with local channels, are also reluctant to promote European football channels.Tiansheng had to expend a lot of energy on marketing and building a nationwide distribution network, which cost no less than the copyright itself.At the beginning of the new season, with the exception of Guangzhou, where Eurofootball channel is based, several other big cities have been slow to land.Among them there is tiansheng’s base camp Shanghai, which is embarrassing!Beijing Gehua cable thinks the monthly fee is 188 yuan too high, dozens of other fee channels are packaged but dozens of pieces.Finally, the deal was finally negotiated, and it only grew to more than 5,000 users a year.Shenzhen asked to provide one or two free games a week, but Tiansheng refused, so it did not land.Some estimate that at least 1 million users are needed to break even.Ideal is full, reality is very skinny!At the beginning of 2008, according to British media reports, there were fewer than 20,000 users on the mainland, with fans opting for free alternatives like Serie A and Germany’s Bundesliga.Most of the less than 20,000 users are still concentrated in Guangdong, especially Guangzhou.In Zhuhai, a city of more than two million people, tiansheng has just 70 users, according to data obtained by reporters.Song maintained a strong stance in an interview, but avoided mentioning specific achievements.Although the stance is still very tough, but the company also adopted some changes in strategy.For example, the network broadcast rights were sold to lottery website 500WAN at a price of nearly 10 million yuan, charging 3.9 yuan per game;But the Internet speed at that time did not have the conditions for live broadcast, the effect was very poor.Tiansheng also works with three TV manufacturers to buy TV sets and send channels to cultivate user habits.As a result, some fans called for boycotts of all three TV brands.After a series of setbacks, Song finally admitted in front of the media that he had been too aggressive in the past and should not have challenged fans and made many mistakes.In the 2009 season, Tiansheng’s last defense was broken, and some of its matches were distributed to local channels, so fans could finally get free premier League matches again.Three years later, the management of the disastrous tiansheng and Song Zheng withdrew from the stage of history.09 Capital is still optimistic about the payment model, the establishment of New England Sports, quietly with 30 million DOLLARS to win the English Premier League’s new three-year cycle of the exclusive rights in Mainland China and Macao;It was renewed for another six years.At that time, the media commented that Song’s failure may have opened up a new way for the later payment model.But is the paid model working?Lesports and Suning are broken halberd in this road!