Recently on the Roar, Mike Tuckerman wrote that free-to-air-TV can’t save the cash-strapped A-League.
He said, “… the sticking point – aside from the fact that Fox Sports essentially subsidises the A-League and are understandably reluctant to give away their own product – is that no free-to-air network has shown a willingness to stump up some cash and actually pay for it.”
This position has existed for some time now and isn’t a new reality for football fans or the networks, but what may be the game changer is the recent blockbuster AFL rights deal – and not in the way many football fans may think.
With Fox Sports securing the right to show every single AFL game live, the argument has been floated that more people will be willing to migrate to pay television and pay to get a superior product in terms of the availability of games and coverage that will be interruption-free.
On Offsiders the other week, Gerard Whateley made this bold statement:
“…this is a tipping point for pay television in this country and if the NRL mirrors the same deal, then we’ll go very quickly from 34 per cent, I believe, to double that.”
To go from having pay television in one out of every three households to two out of three households is a big step, but what will happen if it actually does occur?
What would this mean for football in Australia in terms of expansion?
Should football fans be worried that there isn’t an A-League component on free-to-air-TV?
If pay television does expand its reach into Australian homes by marketing itself as the premier network for sports coverage, then perhaps, it is not such a big issue that pay television is the horse upon which the local game has hitched its wagon.
If the AFL and NRL fans in this country begin forking out the dollars to watch their winter codes, then this expanded audience will also have the opportunity to watch sport over the summer and, in most cases, the scheduling will be such that they don’t have to choose between football and cricket.
In this situation, does the A-League and the FFA really lose out by not negotiating with any free-to-air networks?
The value of the product is enhanced by the exclusivity of the A-League being on pay television, which will hopefully mean a bigger deal for football in terms of the dollars on the negotiating table.
One of the primary concerns held by football fans has been that only getting A-League games live into about one-third of Australian households (and possibly less) is not going to help grow the game.
But if pay television starts to grow and doubles its audience on the back of bumper deals for the AFL and NRL, then this argument gets weaker.
Whilst it is a big assumption upon which to base an argument, if pay television becomes the way in which the majority of Australian households choose to watch their sport, is it the right thing for football to be going against the grain in that regard?
The two big holes in this scenario are that unlike football, both the NRL and AFL already have games on free-to-air networks and that no matter how much growth pay television experiences, until it has 100 per cent coverage of households, it will never have as broad coverage as free-to-air.
I have always firmly been in the camp seeking live games on free-to-air-TV, but these latest developments have got me wondering whether fans need to start to recognise that in Australia, football and free-to-air-TV just don’t mix and that it might not be as big a problem as once imagined.
It is clear that I am posing a lot of questions without providing many answers (if any), but that is just a reflection of my uncertainty in regards to this issue.
It’s one that is likely to be a live one for quite some time and won’t be resolved until the impacts of the new deals become apparent.
But if pay television does double its audience in the next few years, then many fans will be forced to reassess their positions.
As John Maynard Keynes once said, “When the facts change, I change my mind.”
peter care
Guest
What type of cable do I need to connect my phone to TV? (Have an I Phone and Sony Ericcson phones, and LCD TV).
TheMagnificent11
Roar Guru
There's no real motivation for Foxtel to negotiate better deals. They're a monopoly and they can pass the extra cost to the consumer. Sure better deals for them could mean better deals for consumers, which in turn could lead to more market penetration that might increase profits. However, as long a profits increase each year there's no need to change a winning formula. Furthermore, by paying a premium for the best content, they make it hard for competitors to come into the market because they've got the rights. The most likely source of competition for Foxtel would probably be internet TV. It is becoming more prevalent and can take business of Foxtel with their cheaper subscription fees because internet rights tend to be cheaper than TV rights. Unfortunately, Foxtel and Telstra would probably team up, get into the market first and pay handsomely for the rights to try and prevent competition. Perhaps if Australian has similar laws on monopolies to the United States (I don't know what they are, just heard that they exist).
peter care
Guest
The 25% News Corp stake in Foxtel is irrelevant. The real money is in Fox Sports and News Corp owns half of that. Fox Sports over charges Foxtel (50% Telstra owned) for it's service. That's why Fox Sports makes a fortune and Fox Sports barely makes a profit.
peter care
Guest
Independent telecommunications expert and commentator Paul Budde predicted years ago that Foxtel will never get near the 70% or so penetration rate of North America and Europe. Why? It is simply too expensive for most Australian families, i.e it is not good value for money. It basically is a luxury product. Part of the reason for its expense is price gauging from that monopoly Foxtel, and part because Foxtel pays too much for programming esp to Premier Media for the use of Fox Sports and way too much to the Hollywood studios for the movies. If Foxtel really wants to increase the penetration rate to about two thirds of households it must reduce the cost by at least 30% and offer a smartcard only service, like they do in Europe.
TheMagnificent11
Roar Guru
Even with so much NRL and AFL being live on Fox, I'd be surprised if Foxtel went from 1/3 to 2/3. Perhaps 1/2. The reason being that the price of the sports package will go up to cover the cost of the TV rights. A lot of Australian families already have tight budgets so if they don't go for it $80/month (basic package + sports package + IQ2 + HD channels), what makes you think they'll go for it at $100/month? NRL and AFL will still have a free-to-air presence so there's no big motivation to change. You won't see a big jump until the whole of the AFL or NRL goes to pay TV like when the English First Division converted to the EPL and went exclusively to Sky Sports.
PeterK
Guest
And Swampy, can you understand those of us willing to spend much to attend live games locally (because that way we are supporting our club), but not willing to buy Pay-TV or even to go to a pub for regular games. I suppose we are expected to buy Pay-TV and tell ourselves that we are supporting our club that way. I've been paying much more than $25 (every second week) to go to my "local" A-League game which is actually 140 km down the road from where I live. Petrol alone has always been about $40 (and probably increasing from here on?).
PeterK
Guest
Yes, Futbanous, I agree. While I have no desire whatever to have Pay-TV, I would probably be willing to pay a little in order to get JUST FOOTBALL.
PeterK
Guest
Before I read the prices you mention, Peter, I was of the opinion that I don't ever want Pay-TV. You've completely firmed up my opinion. Those prices are exorbitant.
Jaceman
Guest
The Socceroos and A-League are on Pay-TV till 2013 - why would FTA promote it?? O'Nelll took the money in 2007? and knew there would be pushback from FTA. The 3 other major football codes have a mix of FTA/Pay so are more widely exposed. Despite poor ratings in their non major state, 1.2m people are interested in the Swans performance and 800K are interested in the Storm..
steve ellis
Guest
The australian media landscape is still a boys club for a small band of ego driven media owners reeking in conflict of interest.... It has much to do with promoting your own 'product' as with 'excluding' your rivals.. on FTA its a 'win-lose' mentality...... which is why Ch7 has to pump and promote so much AFL adnauseum live into sydney regardless of the games abysmal ratings and questionable following in NSW.... in contrast...ch9 satuirates NSW with league coverage and promotions .. but its sister station gives bugger all coverage of the game in melbourne.....or adelaide..or perth.. Socceroos games ..especially WC qualifiers on in a decent hour and with a speck of decent promotion would easily outrate league's kangaroos or a regular season AFL game on a National basis....i.e. over 1 mill viewers. yet vested interests at the state level mean an FTA channel would prabably want to purposely limit the exposure of the socceroos to 'protect' their main local AFL/NRL product....
Brian
Guest
I disagree with Gerard from the insiders on this one. The pay TV rates of 66% are based on what was achieved in Europe/US a decade ago when pay TV became a must have. In the 1990's pay TV was about live sport and movies. The movies are gone and this is why Foxtel paid $600m for AFL, it had to. The net has killed the first release after cinema movie experience and live sports all thats left. Pay TV won't reach 2/3 households because hard as it is to believe almongst roarers some people don't care all that much for sport, very soon they will get more value investing in high speed internet than foxtel. Products like Slingbox in the UK will mean pay TV will struggle except with diehard fans who must watch all games live.
Jaceman
Guest
Peter Wilson, The media analyst's predictions (I have seen a hundred media analysts over the years always predicting the demise of networks and News Ltd had a vested interest in running this story) were incorrect by a mile - not only did they get more they got a lot more - he didnt factor in that they were offering more content, underestimated the halo effect, was incorrect that the media groups share price would fall and forgot history where the network that has lost the AFL rights has suffered extensively in the ratings in the following years. It has been the experience in the US that sports rights become more attractive in a fragmented market because it is the only way to get big audiences all watching at the one time eg Superbowl has outrageous numbers. Because Nine has had the NRL rights for ages, there is no "fear factor" built into their bid. All I can say is - diddams to you...
Peter Wilson
Roar Guru
Don't you pay attention. A couple of people have already posted this link in other Roar articles. Read this: http://www.theaustralian.com.au/business/citigroup-warns-1bn-rights-may-be-too-high/story-e6frg8zx-1226027693030 Citigroup global markets analyst Justin Diddams said in a report that on a combined basis, the AFL rights lost money for the free-to-air television broadcasters -- "generating $75m in ad revenue per year and costing $93m to acquire (plus production costs)" -- and that that scenario was unlikely to change with TV audiences continuing to fall. The only ones to make money out of the last deal were the AFL. It will be the same again for Foxtel - I believe they paid too much - it will cost them and they won't get many more subscribers because of AFL.
Pete
Guest
Actually heaps of League videos have over 500k viewers, including some with over 1 million. I am not sure what you were searching but if you but if you search just NRL then you might not find much because the majority of NRL videos get cleaned out every couple of months due to copyright infringements.
nordster
Guest
maybe at the wholesale level, but there'll be a whole bunch of providers that can offer web access and direct streaming TV over NBN to consumers/retail. (Some are already getting started on the IPTV side of things.)
Midfielder
Guest
WOW ... that is amazing ....
Whites
Guest
British Services Broadcasting Service I presume.
Swampy
Guest
Peter Wilson - 7 & 10 lost money on the last AFL deal? This is news to me, I hadn't seen the figures for this. Very compelling argument against paying big money for the AFL rights and 7 were silly enough to do it again! Can you please post the link from which you can reference this extremely valid point of view. Many people on the Roar need to see this. -- Comment left via The Roar's iPhone app. Download The Roar's iPhone App in the App Store here.
Swampy
Guest
Midfielder, I shall laud you if the A-League ratifies a deal worth half the AFL deal (I assume you mean $550m or half of $1.1b). Otherwise expect to receive an incredibly large amount of derision. What I don't understand is people who claim they can't afford the $25 per week for pay tv but instead will prefer to go to a local to watch a single event. Exactly how much does it cost to go to the pub? I know if I go to the pub $50 is not enough these days. Do this twice a month and well, the maths isn't hard. Seriously though if you plan on going to pubs to watch games for free and spending no money, then (a) I don't want you as my mate for the next shout and (b) the pub should ban you cause you are not the consumer the pub had in mind when they forked out big dollars for a commercial pay tv subscription. -- Comment left via The Roar's iPhone app. Download The Roar's iPhone App in the App Store here.
David Heidelberg
Guest
I am currently in Afghanistan, and via BFBS we got a weekly A-League highlights show through the season, all finals matches live and the Grand Final was broadcast live and replayed about half a dozen times over the following week. We get one NRL match a week and zero AFL.