Sohu, Sina, NetEase and QQ, as well as a host of other websites, were thought to be taking part, with bids expected to exceed US$10 million. The rights were originally thought to belong to Sohu, which is the official internet content sponsor of the Olympics, but its contract reportedly only covers online highlights of the Games.
The online broadcasting rights would allow the winner to broadcast live coverage of the Games on the web. CCTV, which already holds terrestrial TV rights, is also expected to enter the bidding.
China has 140 million internet users, offering great potential for IPTV.
However, only half a million people subscribe to internet television. “The reality is that there’s a lot of hype around it, but I’m not sure how many people are going to watch the Olympics online. It’s really just for bragging rights,” said a media agency source.
She suggested that the winner may not be able to recoup the high cost of the rights, putting off some of the larger sites. “This is a great chance for smaller Chinese YouTube-like sites - like Yoku - to make a name for themselves. It would be huge for them.”
IPTV’s potential for generating advertising revenue is so far unclear.
In addition, tight regulations on ambush marketing from both the Chinese Government and the Olympic organising committee may put advertisers off.
David Wolf of Wolf Group Asia, a Beijing-based communications consultancy, argued that the cost of the rights may be prohibitive for smaller websites.
He suggested a large television organisation, such as Shanghai Media Group, could see it as an opportunity to make a mark in IPTV as well as challenge CCTV’s TV coverage. “It would certainly have the capital,” he noted.
