The Nine Network this week secured the broadcast rights for the NRL, in a five-year deal to start from 2018. This has removed the possibility of Foxtel and Ten establishing a combined bid for NRL, although the AFL rights are yet to be confirmed.
The deal will see Nine pay $185 million annually for the NRL rights, which some argue will see Nine not place a bid for the new AFL rights.
The amount Nine will pay could be lower if the NRL allows pay simulcasts of games, although Foxtel has not yet confirmed its interest.
Former NRL adviser Colin Smith was unimpressed, saying the rights deal announced by Nine and the NRL was disrespectful toward Fox Sports, a long-term broadcaster, and left them with “crap content”. He says the the public announcement of the deal, before “ever going to market properly”, could make it more difficult for the NRL to secure a deal with Foxtel.
Digital is the future
One of the biggest surprise shifts to come from the new deal is associated with digital rights. As part of Nine’s deal it has secured the streaming rights, with no confirmation how this will impact the previously titled “digital rights”.
It comes as Telstra this week revealed growth in streaming of both AFL and NRL games which “increased by over 70 per cent and 100 per cent respectively in the past year”.
Nine boss David Gyngell has said the NRL deal is “transformational” because it enables “viewers to see the best of the NRL, live and free, four days per week, anywhere, on any device”.
This statement in itself shows commercial television broadcasters are no longer solely concerned about TV content being viewed on TV sets. Content is king, regardless of the platform it is viewed upon. It also shows that live sport, as many have already argued, will be a key contributor in the future success of free-to-air broadcasters, particularly in Australia.
What about digital rights?
If Nine is to hold the streaming rights, what does this means for the digital rights currently held by Telstra?
It appears from the NRL’s CEO, Dave Smith, that digital won’t be segregated in the same way it has for previous rights deals. Smith says:
“By 2018, the digital world will be very different and we want to be in the best possible position to take advantage of any changes. So negotiations with the pay-TV and digital providers will continue and, again, our focus will be on ensuring the most widespread coverage on whatever platform fans choose to watch rugby league.”
Recent reports are making it unclear as to how Telstra will approach the new rights of both the NRL and AFL. It has been reported that Telstra will pull back from paying any big fees to gain the rights for both codes. In addition, it could be that Telstra doesn’t make a bid at all, yet could still be able to stream games via its services.
Sports subscriptions
There are various ways Telstra could still stream games, if they were not bid for the rights. The first would include Foxtel, which Telstra has a 50 per cent share in. If Foxtel were to make an agreement with the NRL for broadcast rights, Telstra could provide the stream to its customers via the Foxtel Sports app.
Another option relates to Nine and the way in which it may utilise its rights to stream NRL games. Nine is currently involved in two online ventures that could be utilised for streaming of the games – 9Jumpin, which is the networks catch-up TV service and also Stan, its video-on-demand service; a joint venture with Fairfax Media.
Stan is currently struggling to compete with the other major video-on-demand (VoD) service, Netflix. To ascertain a point of difference, the streaming of games in addition to other exclusive content via Stan, could give the service the difference needed to claw back some of the lead gained by Netflix. Netflix has said it is not interested in live sport.
The VoD service Presto could also take the same approach, with its joint partners Foxtel and Seven. Foxtel has used Presto subscription figures to lift its overall result. It could use Presto to stream the NRL content if it was to obtain the rights. This may provide fewer issues, than Nine and Stan, due to Nine’s rights associated with free-to-air, where as Foxtel and Presto are both subscription services.
But how would this help Telstra?
Telstra the all-in-one provider
Telstra has recently announced Telstra TV, and has been in negotiations with the three prominent VoD providers, Presto, Stan and Netflix to have all three services available via this new service.
This could see Telstra take on a role as a media aggregator, a role used to describe itself in its 2015 annual report.
Telstra says:
“Rather than restrict our customers’ choices, we are open to hosting all Subscription Video on Demand services on our platforms and making it easy for them to get all the content they want in the one place.”
This could see Telstra less focused on obtaining the digital rights themselves, but rather providing the digital rights holders alternative platforms for content distribution.
The announcement of the NRL rights with Nine and the lack of clarity for any additional bidders raises many questions for the future of sports broadcasting and the rights in Australia. Could it be the sporting organisations themselves that obtain the digital rights and provide the services currently provided by Telstra, removing the middle man?
The urgency by Nine and the NRL to announce the rights deals, of which only part has been confirmed, is also questionable. The NRL rights will not start until 2018. This is a year later than the AFL’s, which is yet to announce any of its rights agreements or any make any suggestions of deals.
The announcement this week could impact the new AFL rights and it’s yet to be seen if it will be a positive or negative one. What the announce does signal is a change in the way in which Australians will view sport in the future.
Marc C-Scott is Lecturer in Screen Media at Victoria University This article was originally published on The Conversation. Read the original article
Jay C
Roar Guru
Yeah. It's obviously not 25 million a game. I don't see how anyone could believe that. A simple multiplication shows that 25M x 4 = 100M x 25 Week long Season would be 2.5 Billion dollars to simulcast games from 9 per year. I have heard that Youtube are looking to expand into the live sport market which, if true, will be the deathknell of broadcast television. I would love for someone like Youtube to snap up the digital rights/simulcast. They could then sell subscriptions and I would probably never watch broadcast TV again.
Crosscoder
Roar Guru
No that's not what I'm saying.All I'm saying is should Foxsports agree to simulcast all 8 games,then ch9 will be paying $800m over 5 years instead of the current $925m . The difference of $125m will be lost if you like in the final figure Foxtel coughs up to the NRL. I have been researching a hell of a lot of print guff ,by various media outlets on the matter. Mate its not $25m a game.Do the calculations .Weidler should try it.I agree the ad side of it is a bummer. Pay TV still to come. Whatever that figure ends up I have no idea.Although one exec said the Pay Tv rights could be worth about $700m Sky NZ Internationals as the lafter two estimated to be worth $150m.Thjis they estimate to be worth about $1.7bn to the NRL.Online rights to be added. A comment made by Rupert Murdoch on then AFL: deal today"they (Foxtel) prefer the AFL." of course Lachlan has a different view. That comment just reinforces everything people have been saying about News and its swipes at rugby league over the years.Agenda driven drivel at times. And i agree with your points, Smith and Gyngell got in early and pushed the market.Foxtel has one choice despite they have the AFL now at a huge deal,try to get the NRL on the cheap and be snubbed ,lose it by not bidding at all,or be commercially responsible and retain your market with simulcasting. if 300,000 NRL subscribers flick Foxtel at $100per month thats $360m pa income ,plus advertising revenue that flows on to other slots . I watched Paul Kent cry in his milk tonight,saying the NRL did not show respect to Fox,or to Telstra by going alone and not telling the other bidders.Now he is spitting the dummy saying teh nRL will be lucky to get $1.5bn. This is the same News that nearly killed of rugby league,and he talks respect ,oh the irony. Gaz can you believe it? I'm, being moderated for outlining discussion points.
Gaz
Roar Rookie
I don’t think Danny Weidler is suggesting or performing any mathematics at all and is simply quoting Gyngell the Great. You are missing my point entirely and that is Foxtel have indeed been pushed into a corner by Smith and Gyngell. The NRL need Fox sports as much as Fox sports need the NRL but by accepting to go it alone deal from nine without Fox it means Smith has $900m of the $1.2B the NRL got last time. There is no way Fox will agree to simulcast at $25m a game or show all the ads they simply can’t do it. I understand there is also digital rights and sky NZ to add their bit but the way it stands to my reasoning is Smith now needs to make up the short fall of $300m over 5yrs is $60m a year to breakeven. You’re saying Fox to tip in $25M per year so it’s a big ask for digital and Sky to front up with a combined $35m. The ball is now in Fox’s court so Mr Smith will need every bit of his experience to wiggle out of this as Gyngell the Great takes a well-earned break with nobody able to wipe the smile off his face.
Crosscoder
Roar Guru
Tabakoff further notes" If the NRL is to achieve the $1,7bn figure it would need to reap $800m fro pay tV rights and online rights to all 8 matches around(including simulcasting) from fox Sports or some other player.It could expect to reap $100m from NZ TV rights."
Crosscoder
Roar Guru
Seriously Gaz you are quoting Danny Weidler in the SMH ,hardly the financial genius of the business world. If News simulcast the 4 live as Welder suggests at $25m per game.That would be $100m per week.LOL. No one is going to pay $25m per game,its not the NFL. I will repeat Nick Tabakoff business editor at large of the Telegraph on 11th August. "However if Fox sports or some other pay TV party pays for simulcast rights to Nine's games the FTA network is likely to pay $125m less ,or $800m for the rights." Pretty clear in my book.$125m over 5 years reduction in the FTA deal, if Pay wants simulcast. That is $25m pa , and not according to the Weidler school of mathematics $25m per game. So FTA pays the NRL less $125m over 5 years and the Pay Tv pays the NRL..............fill in the blanks. It reminds me of that rl hating journos in the Age, Caroline Wilson.She stated today when referring to a possible $2bn deal for the AFL over 6 years,that the NRL deal was over 4 years ,yet it was 5 years for the ch9 contract. Some journos do little checking before going into print ,and we suckers fall for it.Close enough is good enough.Hate them to do my tax returns.
Gaz
Roar Rookie
Sydney Morning Herald 15th Aug. There is also the option for Fox totake Nine's pictures at a cost of $25million per game. Nine's advertisers will get their commercials on Fox as part of any package. Read more: http://www.smh.com.au/rugby-league/league-news/david-gyngell-inked-nrl-deal-and-moved-on-20150815-gizvv7.html#ixzz3j4S4tLmh Follow us: @smh on Twitter | sydneymorningherald on Facebook
Marc C-Scott
Roar Guru
Thanks appreciate the comments. There are plenty of other sport related, TV and streaming articles I have on The Conversation. I plan to post future sports related ones to The Roar. https://theconversation.com/profiles/marc-c-scott-14036/articles
Marc C-Scott
Roar Guru
Yes this is already happening overseas. People subscribing to specific sports programs and sports channels, without the need to subscribe to other content they dont want.
Marc C-Scott
Roar Guru
Certainly TV is still king in hors of viewing in Australia atm, but there is clear shift. BY 2018 the TV landscape will be different, I can't see TV being dead by that time, but I think it my change. Australia currently has a 30% uptake of internet connected TV's and Netflix has almost a 10% uptake in just a few months, so streaming is definitely going ahead quickly atm. This in comparison to Foxtel's 30% penetration rate in Australia, far less than the UK and US uptake which is 50% and 80%. I think we need to be careful in the way Free-to-Air TV is handled, so that we don't lose it (so may want that to happen). But the market would be far different and less flexible.
Marc C-Scott
Roar Guru
Here is an article discussing it but still not clear. It will be based on trading NRL for AFL games, therefore will need to wait on the outcome of the AFL rights. http://www.smh.com.au/business/media-and-marketing/nine-could-trade-nrl-games-for-afl-20150813-giyya0.html
Marc C-Scott
Roar Guru
Thanks glad you approve and like the article
Birdy
Guest
Nambawan, if fox gave up the NRL broadcast my subscription would be gone faster than Hayne could run 53 yards.
pete bloor
Guest
If being detested was a black mark would No No No Gould still be in the box though?
Crosscoder
Roar Guru
They Foxtel have never opened the wallet for the NRL to the detriment of other sport's content,and they won't do so now. But as Elizabeth Knight of the SMH pointed out on 10th aug. there are an estimated 600,000 Fox sports subscribers ,and Foxtel is that it probably can't afford to ignore picking up the second tier NRL games for fear of losing many of the est 600,000 Fox sport viewers." Thus 350,000 could be closer top the mark. Another point made in the SMH' They could not forego the NRL rights as subscriptions are already impacted by the emergence of streaming networks such as Netflix and Stan" Simulcasting will help them retain NRL subscribers,and many NRL subscribers are regionals where rl is particularly strong.They will lose little with viewers if they simulcast,they will lose if they don't. I'm a subscriber and have no fear to cancel my subs,should I get a less than impressive or nil NRL package.Simulcasting will more than make me happy. Do not underestimate the impact NRL has on the Foxtel subs..Do not ignore the expansion effect. Rupert Murdoch is well versed in the value of rugby league to his Pay Tv operation,and that situation has not changed ,despite other codes involvement. Negotiations have been ongoing with Foxtel and BTW the NRL is in no rush, as their deal with Fox does not end till 2017.The question is does Fox want to wait till then,and other competitors come into focus. Its not just the NRL games on Fox,it is shows such as Mat John twice a week,which draw decent audiences.NRL 360 ditto and Sterlo.There are in fact plenty of ads prior to teh games ,half time and end of games. The bottom line in the whole shebang is,the NRL has secured almost as much as its last TV deal with Pay TV /simulcasting/online and International rights yet to come on board,plus they control scheduling and underpin the financial viability of clubs. I agree with you simulcasting may not drive further subs,in an already saturated Pay Tv market,but what it will do is avoid a massive churn rate which will hit their bottom line via subs and ads,and may not encourage people who follow NRL and other sports.
Von Neumann
Roar Guru
Remember when I said they'd go up and up and up. Well maybe Patrick said that headline but I wrote the thing. I am legion. That's TWO rights deals now. Really enjoy your stuff cross coder.
Distant Knight
Guest
They can't broadcast in HD, but that doesn't mean it can't be filmed in HD as currently happens with their games. Hoping FoxSports pay up to simulcast all games, as watching it live in HD with no ads is a much better viewing experience than what nine are offering.
pete bloor
Guest
To be fair it is at this point conjecture and the AFR routinely get things like this wrong as they like to get out in front of a story.
Train Without A Station
Roar Guru
They currently pay that for more exclusive content and 2 peak night games. Now 350,000 doesn't include every person. But if you only watch one game a week are you likely to cancel your subscription? I doubt if they lost the NRL they would even lose half those 350,000. They will lose significant numbers sure. But I'm sure that 350,000 includes people who watch AFL, Rugby, Golf, V8 Supercars and other sport, and to cater to them they have to pay for all this sport too, so they can't just empty the wallet on NRL. Simulcasting games which are already available does not offer huge value. They want to drive subscriptions and this won't do that.
Crosscoder
Roar Guru
It's not $25m each game.It's $25m pa over 5 years ,if Foxtel wants to simulcast.IOW ( would pay $800m over 5 years. Smith has little to do with any ad arrangements between 9 and Foxtel. Media pundits even Gus Gould believe Smith as did many business media pundits did a brilliant job. In addition the code gets an upfront payment of at least $20m. The game was losing $12m pa when Smith took over,and you want to bring back Gallop what the !!.The game now has control over its scheduling,players welfare taken into account,more emphasis on Internationals ,and better opportunities for expansion. The point the respected Australian's business journalist Glenda Korporal made "The deal now ensures the NRL is on the soundest financial footing it has ever been-a base that Smith wants to take the game to a new level,exploiting both its TV and digital potential and stepping up its role in international sport." The early bird catches the worm,the NRL got in early.
Crosscoder
Roar Guru
TWOS It (the number of NRL subscribers )is significantly more than 350,000 and that is according to Fox,as I suggest not every RL fan watches every game.Not every NRL fan watches say a Sharks v Storm game which rates highly. Do not equate peak viewing numbers to mean that is the limit of NRL subscribers. The point is, the subscription base for the NRL is far higher in the Northern markets.Sydney being the biggest and Brisbane the 3rd biggest consumer market in this country. Lose both those markets via subscriptions running into hundreds of millions,but also major advertisers who advertise across the board and they lose the NRL to sell their products,they are also may not continue with the other programs within the pay TV showings.They in fact see little value perahops with what is left on offer.Their ad rates would drop with the scraps. Advertising rates are hardly going to remain static over the next 7 years.. They cannot afford to lose sport and more particularly they cannot afford to lose rugby league.The very sport that was the original driver of establishing Pay TV in this country.Ask Ribot and R Murdoch. The value to Foxtel will hardly be diminished as they are given the opportunity to simulcast all 8 NRL games(which they did not have before),plus the opportunity for an additional expansion slot should the code increase to 18 teams. Remember they currently pay the NRL $550m over 5 years,they only have to increase the figure by less than 30% that gives the NRL at least $715m,.with internationals to come plus other digitals.They should be able to crack $1.7bn. Correct no one in particular,without sport not many are going to fork out for drama rehash and movie repeats ,with competition from Stan & Netflix is around.