LeSports could have emerged as the largest sports streaming platform in China. But they failed to achieve so due to their own shortcomings. Let’s know why they failed?
Also, don’t forget to download our Android app which contains startup case studies and business book insights, verified business concepts, and no bullshit!!
Founder Details
LeSports was based in Beijing, China. It was founded by Lei Zhenjian in March 2014. They had a mission in mind to provide customers with the best sports entertainment by creating a content platform, acquiring resources in the industry, and expanding their user base.
Revenue Model
The main source of revenue is subscription fees and advertisements. The subscription fee varies with the number of devices and on the quality of content. Tenure of a subscription is also one of the criteria in fee fluctuation. The second source of revenue is through advertisements. While watching content on the website there are must-watch advertisements that users can’t skip through. These advertisement companies pay to stream websites to showcase their ads.
They also offer premium plans offered by the streaming platforms so that users don’t have to see any advertisements in between. Premium services are costlier than normal plans.
Funding and Investor Details
LeSports have undergone 3 rounds of funding. They have raised a total of CN¥ 8.8B ($ 1.35 billion). They were funded by 10 investors among which Yunfeng Capital, Prometheus Capital, Puxi Capital, and Orica were few investors. They also acquired 2 organizations. The most recent organization acquired by them was Octopus TV in January 2016 for $ 46M. Their last funding Series B round was raised on May 10, 2017.
Business Model
Soon after its lunch LeSports became China’s No. 1 Internet sports Industry. They became a leading video-streaming company claiming to be home to the largest amount of sports content in all of China. They manage to get exclusive rights to the Chinese super league, Formula One, and Wimbledon. They spread their services to Hong Kong by attaining exclusive rights to the English premier league, also most importantly NBA and Fifa World Cup in Russia. They covered about 10,000 matches and 300 sporting events worldwide.
Their services weren’t limited to sports streaming, it involved gaming, e-commerce, ticketing, O2O training. In August 2015, they launched a smartphone and a superbike. They didn’t leave any field untouched regarding sports. LeSports brought the International Champions Cup to China and overseas promotion of Women Super League, marathons, races through event organization.
In 2016, they sponsored various sports centers as well as events like Beijing Wukesong Culture and sports center. They grow at a very fast pace to emerge as the biggest sports media empire in the country.
Competitor Analysis
LeSports neglected behavior has paved the way for competitors to rule the market.
FloSports:
FloSports is an over-the-top stream broadcasting and streaming service based in Texas. Initially, the video content was free of cost, later the company shifted to a subscription model. Besides sports streaming, it also includes news, films, expert commentary, documentaries, and much more.
FITE:
It is a digital hub for global sports. Besides offering subscription services like any other streaming company, it also offers a pay-per-view service. Customers can only pay for the content they are watching. It was launched in 2012 and based in New York.
FuboTV:
Originally launched as a soccer streaming service in January 2015, later pivoted to all sports services. It is based in New York and mainly focuses on streaming live sports channels.
Failure Analysis
The main reason for their failure was the fast-paced and early growth that they yearned for. While putting legs in every domain of the sports business, they were unable to manage any of it.
In order to fuel the expansion, the company was piled in huge debt. Sudden expansion into event management, TV sets, smartphones, and even electric cars made them suffer a cash crunch. The result of all these was to face legal challenges.
- A petition was issued by an international sports broadcasting company as they were unable to pay them.
- The user base had a sudden downfall as the website revealed almost no sports content after a few months.
- Customers’ complaints were increasing day by day because after subscribing to the channel they had to watch blank screens.
- LeTV failed to broadcast FA Cup Finals due to their payment defaults.
- Despite granting several payment reductions and referrals from broadcasting units, the company faced huge financial trouble which seemed impossible to overcome.
Eventually, customers started filing complaints in fear of no refunds from the company. Ultimately the company had to shut down.
Possible Fixes
Besides receiving a good amount of investment LeSports failed to emerge as a successful startup. As fame grew through its broadcasting services, the company’s hunger grew. They thought they would become big if they expanded fast. The outcome was quite obvious. Revenue kept reducing while they were investing in other domains hence lost the track of expenses and earnings. Capital earned from sports streaming wasn’t enough to cover the expenses of other businesses they wanted to acquire.
Sometimes it’s really necessary to understand that you can’t do everything at one go. If they had focused on providing the best streaming services to the audience, their competitors wouldn’t have taken their place in the market. The hype that they created with an enormous user base was lost in a flash.
A small step at a time would have made a difference. If they added more services and premium features from time to time to lure users to buy their subscription would have easily brought in revenue. Companies like Amazon Prime, Hotstar, and Netflix are a great example of a perfect video streaming business model. They are leading sites that have planned growth and aimed to achieve short term goals. Planning to achieve short term goals would easily lead to success. LeSports highly lacked planning and management to work on long term sustainment business. Promises made by them lasted only a couple of months and remained just in words.
Do Share Your Thoughts
Do tell us all your thoughts in the comments section below, we look forward to reading all the comments in the section below.
Also, don’t forget to download our Android app which contains startup case studies and business book insights, verified business concepts, and no bullshit!!
Related Articles:
- Why Did PRIM Shutdown? Here is the complete analysis!
- Why Did VINE Fail? Here is their complete failure breakdown!
- What Happened To Weave? Here are the reasons for its failure!
- Why Did Stayzilla Fail? Check their Failure Analysis here!
- Why Did Rafter Fail? Check their Failure Analysis here!
What was LeSports?
LeSports could have emerged as the largest sports streaming platform in China. But they failed to achieve so due to their own shortcomings. Let’s know why they failed?
Who founded LeSports?
LeSports was based in Beijing, China. It was founded by Lei Zhenjian in March 2014. They had a mission in mind to provide customers with the best sports entertainment by creating a content platform, acquiring resources in the industry, and expanding their user base.
The way you write make it very easy to read. And the design you use, wow. Thats a really decent combination. And I am wondering what is the name of the design you use?
Just wanted to say thanks and keep doing what you’re doing! Great website Enjoy!
Your website is excellent. Thank you greatly for delivering a lot of very helpful information and facts.