When Sponsors Become Daddies (金主爸爸) : a Look Into China’s Entertainment Industry

The Rise of Sugar Daddies (“金主爸爸”)

In today’s China, everyone would use a term to describe clients in the entertainment industry and all the other business: “金主爸爸” (Sugar Daddies). Sometimes people would even refer to their clients simply as “爸爸” (Daddies), setting up a submissive power dynamic between two parties like never before.

It all started in 2014, thanks to a specific variety show and one guy.

6 years ago, when online variety shows became immensely popular in China, production teams were struggling to break through the traditional advertisement model that often seemed abrupt and ineffective. Ma Dong, the former content director of iQiyi and now the CEO of a leading entertainment production company in China, first came up with his “fancy verbal endorsements” (花式口播) for sponsors - who Ma called his Daddies - in the debate show You Can You Bibi (奇葩说). Being an experienced talk show host, Ma managed to sneak in the sponsors and their slogans into his show in a humorous, self-mocking way. As You Can You Bibi rose in popularity online, Ma’s verbal endorsement itself became a highlight of the show. His blunt expression of gratitude towards his “daddies” was not only well-received by audiences, but also pricked the bubble of the entire industry: it is because of the sponsors that we get to see these wonderful entertainment productions nowadays.

The Daddies were acting in grace, and we must count our blessings.

When Ma called out the brand sponsors, the screen popped up with a sticker labeled “Time to Make Money!”

Season 2 of U Can U Bibi, in 2015, became the first online variety show in China that made over a million RMB worth of advertising sales. All of a sudden, the marketing geniuses were awakened, and all the production teams broke the leash on their way of pleasing the sponsors. If the audiences didn’t mind Ma’s funny call out to “daddies”, it surely means there’s space to fit more ads and product placements into other domestic entertainment productions. After all, we all know who the boss is now.

From the variety show The Big Band, currently airing on Iqiyi.

Platforms in Dilemma

In China, there are today four major video-streaming platforms that offer PGC content: iQiyi (invested by Baidu), Tencent Video, Youku (invested by Alibaba) and Mango TV (a constituent company of Hunan Province’ public television network). All the popular entertainment productions in recent years, mainly TV shows and reality variety shows, have been co-produced by one of these platforms with other private companies like Ma’s.

In 2015, iQiyi first began to explore the possibility of paid membership by charging about 20 RMB a month. Thanks to a number of top-rated TV shows it co-produced back then, the platform managed to gain a meteoric rise of membership in the first several years. In 2019, it announced that its paid members population broke through 100 million. By then, all the other platforms had also launched their own membership programs at a similar price point.

But this was far from enough in terms of sustaining the business. Paying for digital content was, and still is a new concept in China, and users were not accustomed to paying subscription for entertainment shows even at a much lower price comparing to western platforms such as Netflix. Pressured by investors, platforms which were struggling to become profitable came up with “super memberships” and other extra paid-services which quickly flopped in terms of public reception. In December 2019, iQiyi and Tencent video launched their “super-advanced streaming” service for the hit show 庆余年 (Joy of Life, a fantasy drama), on top of the paid subscription, the services offered “advanced access” at the cost of 3 RMB per episodes for those who wanted to watch the most recent episodes. Such service received a massive backlash from its paid members, some even sued the platforms in the courts calling for compensation.

Poster in promoting the "advanced access" program.

So here is where all the Chinese video platforms are standing today: after years of burning cash for content production and attracting new viewers, the income from paid memberships is still far from enough to cover the costs. Pressured by capitals, they are left with no choice but to turn to advertising sales at the expense of user experience. Reality shows thus became a fertile land for product placements and brand endorsements; one minute two celebrities were having a heart-to-heart chitchat about personal lives, the next minute one would offer goat milk to the other, praising its nutritional value and good taste. TV shows are not exempted either; reality-related television series would be filled with brand-related plots, often with the characters sedulously mentioning certain brands in order to bury it seamlessly into dialogues.

Some of the countless product placements in this year’s hit TV Show 三十而已(Nothing But Thirty).

What used to be quality first has now officially become profitability first. As a friend who works in Tencent Video told us earlier this year, their logic of producing a show has changed from assessing its quality to assessing its business potential. Today, platforms would no longer give green light for a production unless the marketing team has already found sponsors to cover the production cost.

We get it, dear platforms, you guys are struggling, you must work hard. We like the shows you produce so we won’t complain, but we, your consumers, have a baseline too. At the end of the day, don’t we have the right to just complain a little?

We do have such a twisted love-hate relationship with our Chinese platforms.

With the economy stagnating, it is getting harder for shows to find a single-title sponsorship to cover the entire production cost. Instead, we are witnessing an explosion of co-sponsors, sometimes up to a dozen of them, putting brand logos and product placements every few minutes on the screen.

As Vivo is a sponsor of Sisters, all the scenes of celebrities using other phones were blurred, even when a candidate was having a sentimental face-timing moment with her mother.