One of the most interesting elements of the upcoming sporting broadcast rights deals is that they won’t kick off for two years and look likely to last for five.
Can we really look so far into the future to understand what both free-to-air and pay television will look like in two years in a media environment so filled with uncertainty?
Foxtel is no doubt hoping it can as it positions itself for a range of different scenarios.
It’s rumoured that the new NRL rights deal could be worth as much as A$1.7 billion, a large increase on the A$1 billion for the previous deal.
The AFL and NRL are both set to strike five-year rights deals, with the AFL’s to run from 2017 to 2021 and the NRL from 2018 to 2022.
While some argue that the Nine Network will retain the free-to-air rights for the NRL, the recent Foxtel share purchase into Ten could see the two establish a combined deal. This would see Foxtel and Ten make one sole bid for the rights for each of the codes, controlling the way sport is distributed.
Analyst firm UBS recently placed a halt on any growth by the free-to-air Australian television networks in the coming year. It cited Netflix and its rapid growth in uptake locally as a key indicator.
Despite being a threat to the current television entertainment broadcast model, Netflix appears disinterested in sport. Netflix has continually made it clear that it doesn’t see its future in live streaming and in particular sports, without ruling it out. In the company’s earnings callearlier this year the message was the same.
Ted Sarandos, Netflix chief content officer, stated:
“I think part of our core consumer proposition is on demand. We make viewing certain kinds of content better, because they’re on demand. And I don’t know that on demand sports is markedly better than live sports. So that’s why we haven’t been that excited about it. Why we haven’t chased it. There’s economic reasons as well. I think in general, that sports is great for live television.”
Reed Hastings, Netflix CEO, has also weighed into the discussion:
“If we can anchor the entertainment side for movies and TV shows for every consumer and somebody else, or other set of leagues, anchor the sports part, which is still over the Internet, then the Internet TV proposition is even more powerful for consumers.”
Telstra, too, during its announcement for Telstra TV, said live sports would be a key reason for customers to stay with free-to-air and pay TV (Foxtel) in Australia.
This raises a few questions in regards to Australian sport broadcasting rights. Who could or in fact will be, that “somebody else” that Netflix suggests, and how will it change the way sports are broadcast to Australians in the future?
Telstra currently holds digital rights for both the NRL and AFL. In addition, both leagues also provide live streaming of games via smartphone and tablet apps, in conjunction with Telstra. Arguably it will be the digital rights that will be closely looked at as part of the new rights agreements.
This is due to the change of focus by the Australian television industry in relation to distribution via digital platforms. All free-to-air networks have catch-up services available and two of the three commercial free-to-air networks are involved with video-on-demand (VoD) services. This shows some of the older players have begun to adapt to the changing media landscape .
Foxtel’s share purchase of Ten raises some very interesting questions as to the future for both Ten and Foxtel, particularly for sport broadcasting in Australia.
Netflix is clearly leading the VoD space in Australia. Both Seven and Nine have stated their intention to be in the space, with respective joint ventures in Stan and Presto. Foxtel is partnered with Seven West Media on Presto, and has also offered Ten a 10% stake in Presto. Nine has partnered with Fairfax on Stan. But both services are well behind Netlix and it’s unclear if both will survive in the future.
Ten is yet to move into the VoD environment. The market is arguably already flooded, and still harmed by piracy.
Ten could use its now strong association with Foxtel to establish a live streaming and VoD service that is focused on sport. This is a market not established in Australia, and due to the “live” element, not harmed by piracy.
This could also become part of the broadcast rights that Foxtel and Ten present to the AFL and NRL; to incorporate the digital rights. A move like this would potentially remove Telstra, a 50% stakeholder in Foxtel, as the digital rights holder for the two codes.
Ten has already attempted a sports only channel, OneHD, but it failed. There are now more advantages and options for it to realign its focus with sport once again.
Not only would the new services work for the large sporting leagues, like the AFL and NRL, there’s also potential for minor sports codes, some of which were axed by the ABC recently due to budget cuts.
Marc C-Scott is a lecturer in media at Victoria University. This article was originally published on The Conversation here, and republished under Creative Commons.
Steve
Guest
Revisiting this, two big deals and no TEN. Cricket rights aren't up yet for a while. Leaves only football.
3 Hats
Guest
96 Matches mate as 24 rounds X 4 matches = 96 games. ONE of the "25" Rounds is STAND ALONE i.e. NO NRL on ORIGIN 2 WEEK.
Midfielder
Guest
MF Check my maths if they play 25 rounds at 4 matches per round thats 100 games + 3 SOO + finals that a huge amount per game...
Midfielder
Guest
Massive news they still have pay, streaming and digital to add.
Mister Football
Roar Guru
BREAKING: NRL TV rights deal done. Four games live on free to air, Nine retains, worth $925 million. Story on http://smh.com.au soon - presumably that's just the FTA component?
3 Hats
Guest
Sorry I meant DAVID Gyngell of NINE he is Bruce Gyngall SON. * The Nine Network will up the ante by more than $100m in its joint bid with Fox Sports. Nine paid $475m as part of the NRL’s landmark $1.025b deal in 2012; TEN offered I think it was $600m last time. * Rugby league’s showpiece, State of Origin, is valued at around $150 million, well shy of initial $500m estimates; * Nine will consider taking on four games and screen one live on Saturday nights. Fox is bidding to show every NRL game live from 2018; * State of Origin will not be sold as a stand-alone package as has been previously touted; and * A second Brisbane team would be worth $30m annually to the new broadcast deal. Further Reading: http://www.perthnow.com.au/sport/nrl/david-gyngell-says-a-second-nrl-side-in-brisbane-would-boost-tv-deal-as-nine-prepare-to-up-bid/story-fniablzd-1227475426614
boonboon
Roar Pro
Is it wierd I am agreeing with you both yet have Foxtel live streaming the NRL on my laptop - we don't have it on TV just on Fox Go with an apple TV much more convenient for a renter and we have had no internet problems ever
Alex L
Roar Rookie
I would sincerely hope the ACCC blocks it, I don't trust them to do their damn job, but given ch10 has done things with Rugby Union like not showing games they have the rights to (on the end of year tour last year they showed games like Australia vs Ireland but skipped the Australia vs England game which would easily have drawn a bigger audience) any scenario in which they have coverage shared with Foxtel worries me.
3 Hats
Guest
No mate TENS offer was much more than NINE but Ch9 invoked its clause of "the last rights bidding" that they had from the previous inept deal. So the NRL by law had to accept less, however no such clause exists in the current deal. The BIG wigs at Ch9, Bruce Gyngell and Co. as a Roosters director he seems to manipulate the powers that be at the NRL...Politis eg. has tremendous influence. The NRL this time can throw it open to all party's. As in the previous RADIO rights also, 2GB had exclusive rights...Now we have 2GB and Triple M plus ABC Grandstand. I welcome Ch10 and Ch 7 to knock off NINE. The NRL need to select which games to be on free to air, not the television stations themselves.
Emcie
Roar Guru
Correct me if I'm wrong but didn't 10 miss out last time because they wanted to on sell the games to fox? Meaning their offer was less than 9 and fox combined? Or have I miss read your comment?
3 Hats
Guest
Yes true because NEWS LTD owns the Broncos... unfortunately!
3 Hats
Guest
I may be wrong but... The ACCC did allow for a combined NINE/FOX partnership last time, for a deal for the NRL rights... Remember 10 offered the highest $ figure but NINE kept the Rights. As with AFL FOX/7 outbid 10 and kept the Rights So.... Anything is possible. This 10 and 9 competition interests me. 9 is run by the Roosters and 10, James Packer owns about 10% of it/ Rabbitohs. I say lets get rid of 9s biased and PATHETIC coverage and give 10 a go. The last time 10 had the RIGHTS it was a fantastic coverage. I am getting sick of RABS, Fitler and the like.
no one in particular
Roar Guru
Not adding a second team in Brisbane was a condition of News Ltd's exit
GTW
Guest
I don't care who wins the rights as long as the product is shown in HD and on TV. Having said that, the less I hear of the Nine NRL commentary, the better.
Mark Young
Roar Guru
Great to have you writing for TheRoar Marc!
Mark Young
Roar Guru
No-one from the NRL seems to walk to talk about it openly, but Expansion is a massive issue for the game.
TheSmak
Guest
One thing to take into consideration is all the subscriptions that Foxtel will be hoping for if they do close the deal. Like many have commented already, 1.7 is a lot to dish out, albeit split with another company. All i can say is that if Foxtel do get this deal, then i will be subscribing to Foxtel, and that's what they're hoping for. They're not spending all this money just to 'stay in the picture' (pun intended), they want return on their investment. Yes, advertising revenue is part of their aim, but new subscriptions and more market control is the bonus objective their really hoping for. If they can achieve that, then they'll be in a stable position for the term of their contract, while all the VoD turmoil and powerplays swirl around them.
jamesb
Guest
CC, I agree I am so fed up with Nine, its not funny. They have had the rights continuously since 1992. My dream is for Seven to get Origin, Ten to get the NRL and Tests matches, while Nine receives bugger all. I really hope Ten and Fox can work together with the bid.
Mister Football
Roar Guru
cc I agree - I think $1.7 billion is achievable even without a 9th game, but if there's a 2nd Brisbane team in the comp, then $1.7 billion will represent the floor in the value of the rights.
Crosscoder
Roar Guru
A couple of points worth noting. Currently any deal obviously will be based on a 16 team competition.Any expansion to say another Brisbane side will involve further negotiations for the add on.Gyngell of 9 has been quite emphatic, in suggesting another Brisbane side is worth $200m to a 5 year deal. When you get a buyer to make such an emphatic statement ,one suggests there has to be a decent element of truth in the comment. Monday nights will be gone and 10 will IMO be the beneficiary of Thursday night NRL. Telstra will have to pay a hell of a lot more for the NRL due to traffic flow for the code,and Optus is sniffing around and wants to be part of the action. One hopes ch10 gets FTA ,one for a breath of fresh air,and two to display to ch9 how commentary should proceed. It's a nice position for the NRL to be in.