Chasing the audience: is it over and out for cricket on free to air TV?

Marc C-Scott Roar Guru

By Marc C-Scott, Marc C-Scott is a Roar Guru

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    How Australians watch cricket on screens in the future could depend on what happens with the Nine Network’s current discussions with Cricket Australia over the 2018-23 media rights.

    UBS media analyst Eric Choi said the current deal costs Nine about A$100 million a year but generates only A$60 million to A$70 million in gross revenue.

    Choi said the network should either ask for access to more content at no additional cost, or step away from its long association with cricket.

    The ramifications of Nine’s decision could be broad, impacting not only its potential revenue and viewers, but also participation rates among Aussies playing grassroots cricket.

    Cricket’s current standing

    The current media rights deal for cricket includes the Nine Network and Network Ten. Nine has the rights to international tests, one-day internationals and T20 international games played in Australia, whereas Ten has the rights to the Big Bash League (BBL).

    The BBL has become a crucial cricketing brand, continuing to gain high ratings and listed in Australia’s Top 20 engaging programs for 2016.

    The league also has excellent crowd attendance, having recently ranked 9th in the world’s top-attended sports leagues.

    perth-scorchers-big-bash-league-cricket-2017

    Based on the BBL’s success and the increases seen in the new media rights for the Australian Football League (AFL) and National Rugby League (NRL), Cricket Australia will want to see an increase in the bidding for its rights.

    This is particularly relevant if Cricket Australia still relies as heavily on these rights as in 2012, when it said the rights accounted for 60%-80% of the total annual income.

    But can the media rights continue to increase with the current unstable media landscape?

    The current media landscape

    According to Arnhem Investment Management, the era of advertising-supported premium sport on Australian television is “drawing to a close”.

    The free-to-air (FTA) broadcasters are also currently requesting that the government reduce license fees and reconsider plans to further restrict gambling ads during the broadcast of sports.

    Ten has said it expects its revenue to be “above the 1.2% increase” it outlined in February this year. Yet it will still need to undertake a “significant focus” on a corporate cost-cutting program and profitability as a priority.

    New stakeholders

    With FTA broadcasters under financial pressures, any increase in new rights will require new stakeholders.

    Foxtel currently shows international cricket matches played overseas, but does not have local coverage rights. If it could gain local cricket rights, this would further strengthen Foxtel’s sports offering of AFL, NRL, A-league, V8 Supercars, and many international sports.

    Australia’s anti-siphoning regulation could prevent Foxtel completely dominating the cricket media rights. But this list is expected to be trimmed further by the government this year, furthering opening up the sports media battleground for pay television in future rights deals.

    The future for digital rights

    Digital rights will also be a major consideration with the new cricket media rights. While most would be looking at Telstra and Optus, there have been new players in this area who may also wish to place a bid.

    Currently Cricket Australia has the Cricket Australia Live app which allows users to pay a subscription (A$30 per year or A$5.99 a day) to gain access to live streaming of games, but the new rights could also see this change.

    Optus may continue its affiliation with cricket. It recently become the official mobile media partner of Cricket Australia, and principal sponsor of the Melbourne Stars Big Bash League team. Customers can access cricket content via the Optus Sports app, which also includes Optus’ recently acquired English Premier League.

    kevin-pieteresen-melbourne-stars-big-bash-league-cricket-2017

    Twitter has had success with broadcasting the US National Football League (NFL) and the Melbourne cup last year. This year it signed a two-year deal with the US National Lacrosse League. Twitter may consider its interest in a global sport like cricket.

    Amazon, which recently launched its Prime Video service in Australia, could also be a contender. This year Amazon won the rights for NFL Thursday night matches. It paid US$50 million for ten games, five times the price paid by Twitter last year. Amazon may look at the cricket as another potential global sport to add to its catalogue.

    Another consideration is if Nine or Ten were to obtain the digital rights and use the free and subscription approach that the Seven Network used as part of their Rio Games coverage last year.

    The impact on the viewing experience

    Can you “slice and dice” too much? This is a question being asked in the US by CBS chief executive Les Moonves with regard to the NFL.

    Adding another stakeholder to cricket will impact the viewers’ experience. This year the new AFL media rights created some frustration linked with the way the rights had been negotiated, particularly the digital rights.

    Telstra, the digital rights holder, is restricted by its agreement to limit live match videos to a 7-inch screen size. Highlights and replays are available in full-screen size 12 hours after the match ends. (Foxtel, meanwhile, can stream the games full-screen.)

    This change has outraged some fans who paid the A$89 subscription fee for the AFL Live app. Because of the screen size restrictions, Telstra users with a large phone or tablet have a large amount of black space on their screen.

    Some Australians are being creative in working around the restrictions.

    Media coverage and participation

    The media rights for sport can be looked at far more broadly than solely the coverage of the game itself.

    In the United Kingdom there has been ongoing debate associated with cricket’s coverage. Since the sport moved to pay-TV, there has been a decline in participation levels, which many argued is primarily due to the game no longer being broadcast free to air.

    Reports of a Sport England Active People survey show a 32% drop in participation levels in people aged over 16 since coverage of cricket moved to satellite and cable TV.

    There are now steps being taken to introduce a new Twenty20 tournament in the UK, built around the success of the Indian Premier League and Australia’s BBL, which had some games live broadcast in the UK during the last season.

    This is an interesting case study for Cricket Australia, which only last year announced cricket as “No 1 as the current top participation sport in Australia”.

    Any changes to the rights that impact the percentage of Australians with access to the coverage, could also see a decline in participation based on the UK experience.

    Marc C-Scott, Lecturer in Screen Media, Victoria University

    This article was originally published on The Conversation. Read the original article.

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    The Crowd Says (39)

    • May 4th 2017 @ 10:46am
      spruce moose said | May 4th 2017 @ 10:46am | ! Report

      Anti-syphoning laws will make it incredibly unlikely cricket won’t be on FTA.

      • May 6th 2017 @ 9:58pm
        Bakkies said | May 6th 2017 @ 9:58pm | ! Report

        Who is going to afford the rights though with the well over inflated money being forked out on the AFL and NRL rights?

        I knew this day was going to come eventually in Australia as the networks will run out of money forking out for premium competitions and events while their viewers watching it for the price of nothing. This is just for sport alone before you even consider what they have to fork out to the studios in the UK and the US for high quality tv shows and movies.

    • Roar Guru

      May 4th 2017 @ 10:48am
      Ryan H said | May 4th 2017 @ 10:48am | ! Report

      Would be a shame if true because the odd person might miss out – but there’s that many alternative methods these days for watching, whether it be on your TV or phone. People are smart, they will go wherever the coverage is.

      In reality it seems that Nine are just not making any money. I have no doubt they’d probably love to retain the rights but if it has to go it has to go; numbers are numbers unfortunately.

    • May 4th 2017 @ 10:48am
      steve said | May 4th 2017 @ 10:48am | ! Report

      Interesting I noted today England’s rugby union premiership will show 5 games next year on Channel 5 in the UK, maybe England cricket should do something similar.

    • Roar Guru

      May 4th 2017 @ 10:49am
      sheek said | May 4th 2017 @ 10:49am | ! Report

      Hi Marc,

      Interesting that reduced English cricket participation rates are linked to the game being shown exclusively on Pay-TV.

      You could argue that the same has happened with Australian rugby.

      Plenty of discussion points but I wonder if TV broadcast rights, seen by many people as the easter bunny that keeps giving, is beginning to burst at the seams.

      If this is so, then everyone, not least the sports themselves, are going to have to look at other revenue streams.

      Hmmmm, how about sports fans taking back control by investing membership in their clubs & attending home & away matches.

      It’s been tried before & found to work.

      • Roar Guru

        May 4th 2017 @ 12:27pm
        The Bush said | May 4th 2017 @ 12:27pm | ! Report

        “Plenty of discussion points but I wonder if TV broadcast rights, seen by many people as the easter bunny that keeps giving, is beginning to burst at the seams.”

        I actually think this is what is happening. The FTA networks have been paying over the odds for premier sport and they can’t continue to do so. Either sports like Cricket, NRL and AFL are going to need to move to position where they control their content directly to the consumer, as American sports are, or they’re going to have to accept less money. FTA is simply not the profit machine it once was.

        • May 4th 2017 @ 1:29pm
          Sydneysider said | May 4th 2017 @ 1:29pm | ! Report

          It’s all happening with mainstream media…

          Channel 10

          http://www.smh.com.au/entertainment/tv-and-radio/channel-ten-staff-fear-major-job-losses-and-cuts-to-news-20170501-gvwbwu.html

          Fairfax (publisher of the SMH and the Age)

          http://www.smh.com.au/business/media-and-marketing/fairfax-media-journalists-strike-for-a-week-over-job-cuts-20170503-gvy4qj.html

          and now Channel 9…

          all pointing towards job cuts, cost cutting, lower advertising revenue etc..etc..

          “Plenty of discussion points but I wonder if TV broadcast rights, seen by many people as the easter bunny that keeps giving, is beginning to burst at the seams.”

          I agree Sheek. I think that’s it for the big TV deals. The next TV/media deals for the NRL and AFL and other sports are going to be completely different in 10 years time.

          I still think cricket will remain on Channel 9 in some form BUT Cricket Australia (or the Players Association) won’t be getting the increase they think they deserve.

          Interesting times ahead….

          • Roar Guru

            May 5th 2017 @ 8:15pm
            Cadfael said | May 5th 2017 @ 8:15pm | ! Report

            It has been in the news fr a while that Nine is losing money on its cricket broadcasts. The American money men want Nine to drop it in its current format. If Ten goes under, this would then put BBL on the market so that would make Nine’s coverage profitable. I hope it stays on FTA whether on a commercial channel or on ABC/SBS..

            • May 6th 2017 @ 10:15pm
              Bakkies said | May 6th 2017 @ 10:15pm | ! Report

              ‘The American money men want Nine to drop it in its current format.’

              UBS is Swiss.

              With significantly lower attendances in comparison to their main competitor and cracking down on poker machine palaces it is going to get interesting with the NRL.

      • May 4th 2017 @ 12:43pm
        Pope Paul VII said | May 4th 2017 @ 12:43pm | ! Report

        It’s a crime Sheek.

      • May 4th 2017 @ 7:13pm
        Beni Iniesta said | May 4th 2017 @ 7:13pm | ! Report

        Sheek mate – that’s exactly what’s happening.

        Average AFL crowds this year are 36,740 after just over a quarter of the Home & Away season – that is up 15.3% over the Home & Away crowds for 2016.

        That’s pretty good and pretty telling that Australians are attending live sports in large numbers.

        I’m also sure Big Bash crowds were also up strongly were they not.

        • May 4th 2017 @ 7:22pm
          Hunter said | May 4th 2017 @ 7:22pm | ! Report

          Both the oval sports are doing very well indeed.

          Just wait till the new Perth stadium is complete. Will further bump up their respective crowds.

        • May 6th 2017 @ 10:21pm
          Bakkies said | May 6th 2017 @ 10:21pm | ! Report

          ‘That’s pretty good and pretty telling that Australians are attending live sports in large numbers.’

          Brisbane aside are they really though in the NRL?

      • May 6th 2017 @ 10:12pm
        Bakkies said | May 6th 2017 @ 10:12pm | ! Report

        ‘Hmmmm, how about sports fans taking back control by investing membership in their clubs & attending home & away matches.’

        The French Rugby clubs often wear the wrath on these forums are doing just that. They are far less dependent on tv money and test match revenue to support their provinces or clubs than other Rugby nations. The reason why is they are backed significantly by business and local authorities. The fans also go to the matches and fill the stands. The likes of La Rochelle have proven to the likes of John O’Neill and Spiro that you don’t need to be in a big market to be a successful Rugby team. La Rochelle attract sponsors, players and fans. They topped the log with a round or two to spare and their crowd averages are higher than most Australian teams with regular full houses.

        ‘You could argue that the same has happened with Australian rugby.’

        Don’t know about that. The player numbers were starting from a low base the rights when 10 had the rights prior to the ARU having no real alternative but to take the money from uncle Rupert. They were broke and had another huge overhead that they never had to cover previously – paying the players and support staff.

    • Roar Guru

      May 4th 2017 @ 10:56am
      Chris Kettlewell said | May 4th 2017 @ 10:56am | ! Report

      Cricket is very different to football codes in terms of how you can do split deals. For instance, with the NRL, you have the Friday night game live on free TV and the Sunday afternoon game on a delay, the rest are on Foxtel.

      In reality, going back to the days before Pay TV, you pretty much just had those couple of games on FTA TV anyway. The rest weren’t broadcast at all. So Pay TV basically came along and started broadcasting all the games that previously weren’t broadcast at all and gave people a place they could pay to see them.

      This just doesn’t work with cricket. Any more to pay TV will be taking away the ability to see cricket on FTA that we’ve previously been able to see. So it will be a significant loss. And how do you split up something. It’s not like football where there are a bunch of games over the weekend and you can have a couple on FTA and the rest on Pay TV. A test match is a test match. Unless you are going to do something a bit like what used to happen for a local match, where you’d only get the first or last session on TV to encourage people to go to the ground. Maybe they could have the entire match on Pay TV and only the last session of the day on FTA TV. Outside of something like that, there’s no real option that doesn’t involve completely losing all test match cricket to Pay TV, or keeping it all on FTA. I don’t like it, but that’s the only real slice and dice method I can see for cricket. Slicing within a match, as it’s not a regular number of matches over each weekend for 6 months where some can go on one and some on another like football.

      • May 4th 2017 @ 2:12pm
        spruce moose said | May 4th 2017 @ 2:12pm | ! Report

        Actually Chris

        A test match has been split before. I recall vividly one of these nonsensical top end test matches had the Sunday sessions on the ABC as Channel 9 contractually had to air the AFL and rugby league. It was the first time the ABC broadcast the cricket since the WSC split. And it was fantastic. No ads in between overs! So splitting a test between broadcasters can be done.

        It’s not ideal, but it is entirely feasible to split a test match up on Pay TV and FTA. Say, FTA get to host the weekend days, and Pay TV hosting weekday days, with split screening on afternoon sessions on Thursday/Friday.

        Obviously less feasible to do so for one day matches.

        • Roar Guru

          May 5th 2017 @ 9:03am
          Chris Kettlewell said | May 5th 2017 @ 9:03am | ! Report

          That is sort of my point though, that splitting within matches like that is probably the only remotely feasible way to have a FTA / Pay TV mix because you can’t do it like football do with a couple of games a week on FTA and the rest on Pay TV.

          I don’t like it either way, but I guess the truth is that for most of the test matches that happen while I’m at work I don’t get to watch a lot of them during the week anyway (except loving the Perth test where I can watch the final session after dinner! Melbourne and Sydney test scheduling also gives more chance of being on holidays while they are on and being able to watch more of the test) .

    • May 4th 2017 @ 2:18pm
      Timmuh said | May 4th 2017 @ 2:18pm | ! Report

      There is no doubt FTA doesn’t make the money it once did, and the amount paid for premium sports does seem over the top for a country of this size.

      The one thing live sport has in its favour is the “live” element. With scripted programs people get it early from overseas or watch on catch-up after the broadcast. Woth live sport that isn’t there. Live events are the one time FTA can provide eyeballs to advertisers without as much interference from other media. Sport delivers that in spades. However, advertisers will only pay for the eyeballs during the event – using thos enumbers to inflate averages across a week or whatever does not work. And that seems to have been part of the strategy. People also have other options, if they aren’t as committed to the sport – so there is still audience loss, just not in the same way as with something like scripted drama.

      Cricket will almost certainly have to accept no increase, probably a decrease, in the value of home internationals. And the ListA Cup will probably no longer get broadcast anywhere. Its hard to see the anti-siphoning list having home Test and ODIs removed, so splitting it up by format (e.g. Tests on Pay, ODI/T20I on FTA) will probably not be an option.
      Cricket’s two big problems are being weather dependent, and the potetnial for games to finish early. Hours in the case of a one-sided ODI, days in the case of a Test. That leaves a great amount of programming uncertainty, and there can be only 7 minutes an hour of ads to sell if wickets aren’t falling.

      It is hard to see yet, but at some stage the streaming rights might pick up some that gap. Right now though its not worth that much to a carrier.

      • May 6th 2017 @ 10:27pm
        Bakkies said | May 6th 2017 @ 10:27pm | ! Report

        ‘Right now though its not worth that much to a carrier.’

        Absolutely. Currently putting games up on streams simply won’t work yet it still is discussed. Internet speeds is absolutely dreadful in a lot of parts in Australia and there are still significant areas without any mobile coverage.

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