(Yicai Global) July 12 -- As Alibaba Group Holding's Youku, Baidu's iQIYI and Tencent Holding's video site -- the first-echelon video sites -- continue to expand their market share, China's second-tier streamers and their affiliates are allying to win the contest for competitive differentiation to withstand the ever more brutal competition within the sector.

Migu Culture, which stole the limelight with its exclusive right to livestream the World Cup, announced a strategic partnership with Suning, which owns the licenses to many sports events. Their collaboration will encompass the entire sports gamut, including broadcasting, content production, smart hardware, big data application, and sports facilities.

As the top three video sites collectively hog over half the market, second-tier sites such as Mango TV, Sohu and Migu frantically seek to come up with more strategies, among which cooperation is the most direct and effective, entertainment sector analyst Zhou Yi told Yicai Global.

The partnership between Suning and Migu presents a prime example. Migu, backed by data and bandwidth from China Mobile, is keen to stuff more content into its video platform, while Suning -- with 80 licensed sports resources -- can sate its hunger.

Global telecom operators are all making content, and Migu -- China Mobile's entertainment content unit -- also needs a larger lineup to support the development of its service, Fu Liang, an analyst with China Telecom, said in an interview with Yicai Global. Migu has achieved positive effects with its rights to livestream the World Cup, but still needs to infuse more content.

Suning's PP Sports holds the rights to many sports events, including top soccer events like Europe's big five football leagues and others. It shows more than 8,000 livestreamed athletic events every year, for which it has over 1.5 million paid memberships.

"The largest fruit of this cooperation is that Migu has secured Suning's rights to broadcast many sports events," an insider close to the partnership between Migu and Suning told Yicai Global.

"Migu wants to televise sports events, but it lacks enough licenses, and to buy new ones is difficult," Fu noted.

Migu is backed by China Mobile, and compared with other video sites, is more an adjunct to Suning in their partnership. After the two paired up, China Mobile was not only able to help Suning expand its user base, but also provide network support for it.

"For Suning, being Migu's partner reduces its expenses by relieving it of the burden of some of its licenses," Fu said.

The cooperation between the two sides is more likely to hold up expansion of the top three first-echelon video sites, in insiders' view. "Second-echelon video sites should team up in content, channels and technology, and then hone their edge in vertical markets, because competitive differentiation is for now the most effective response strategy," Zhu Yue, executive director of China Insights Consultancy, told Yicai Global.

A shifting kaleidoscope of these marriages of convenience thus seems likely to set the pattern for the future course of China's livestreamed sports sector.  

Editor: Benedict Armour