The Federal Court’s decision yesterday to allow Optus to broadcast sports matches online and on mobile phones is landmark one.
While in theory, good for Australian sports lovers, it’s a terrible for the likes of the AFL and NRL, which rely on the revenue they receive from selling their exclusive mobile rights.
The AFL has said it is “highly likely” that it will appeal the decision, and surely the NRL and Telstra will follow suit. The case is fairly simple – the Optus TV Now service allows people to record and watch TV (free-to-air not pay TV, which is important to note) on their computers and phones.
The Federal Court ruled that the service had not reached copyright because it was the users were responsible for recording the NRL and AFL games, not Optus, and they were made for private and domestic use. This seems to miss the point – Optus is helping consumers do this, which hurts its main rival, Telstra, which holds the exclusive online and mobile rights.
The battle between the telcos is getting ugly, and the sporting landscape is getting caught up in it. Telstra sits squarely in the camp of the NRL and AFL, as a sponsor and broadcaster partner, while Optus is a digital media partner and major sponsor of the FFA.
Why would Telstra pay millions to the AFL and NRL for exclusive content rights, when Optus customers can get similar sports content for free? Simply, it won’t. They are no longer exclusive.
At the moment, Telstra pays the AFL $153 million for its online and mobile rights. The NRL only gets about $4 million from Telstra for its rights, as well as $10 million in sponsorship, but it is currently negotiating for a much bigger upgrade as part of its larger improved broadcast deal. This decision puts that possibility in danger.
Telstra may now also try and get out its broadcast deal with the AFL in the law isn’t changed. With both the AFL and NRL engaged in expansion and competition for new consumers, not to mention contending with other sports like football and rugby union, every dollar is crucial.
This is a critical time for both sports fans and sports bodies. The way supporters consume sports content is changing, as well all know, with the rise of technology, smartphones, fast broadband, YouTube and the like. With the advent of the National Broadband Network and increased connectivity with mobile devices, the value of online and mobile sports rights will only increase. Less time will be spent watching sport on TV, as more time is spent watching sport on PCs, phones and tablet devices like the iPad.
This certainly won’t be the last we hear of the this case, a larger conflict involving politicians, possible legislation changes, media companies and sporting organisations is just beginning.
At stake are millions of dollars, and more importantly the way in which we as sports fans watch, engage and participate in our favourite sport, not to mention how much we pay for that privilege.
We live in interesting times.