Football must find new revenue streams in more ways than one

By Mike Tuckerman / Expert

The cat is out of the bag and unless something is done to arrest the A-League’s slide, there won’t be much of a competition to speak of beyond next season.

Mark Bosnich has never been one to mince his words. The former Socceroo was typically blunt on last night’s A-League round table on Fox Sports.

“It must be known to everyone that the ratings have fallen off the cliff the last two years,” Bosnich stated.

“Fox TV ratings… and also the commercial ratings for Channel Ten.”

“With how it’s going right now, the grand final as great as it was, was the lowest-rating grand final in A-League history,” he added.

That’s bleak news for a company that by Bosnich’s own admission has invested “over half a billion dollars” since the A-League kicked off in 2005.

And it matters because that broadcast money has essentially bankrolled the competition from day one.

So the A-League needs to find some new revenue streams – pardon the pun – and increasingly they’ll need to come from streaming.

Sydney FC enjoyed the A-League decider – but did the fans? (Photo by Cameron Spencer/Getty Images)

But simple economics suggest that if fans prefer watching streams to more expensive cable TV subscriptions, there’s less money coming into the game.

That is, of course, unless the A-League manages to not only vastly increase the number of people watching streams but somehow monetises the whole thing as well.

And on the basis of what we’ve seen this season, that seems unlikely.

It’s hard not to wonder whether Football Federation Australia didn’t badly misjudge its own demographic before the season kicked off.

There seemed to be an expectation at the start of the season that only a few fans would watch A-League games on the My Football App through Telstra.

Instead there’s plenty of anecdotal evidence to suggest that Fox Sports subscribers cut the cord in significant numbers.

And since Fox Sports’ own streaming service Kayo wasn’t launched until after the season kicked off, A-League fans weren’t encouraged to pay for content many could already watch for free on their phones anyway.

It was a perfect storm of poor timing and the net result has been to harden the attitudes of fans to the idea of paying to watch the A-League.

And the entrance of Optus Sport into the broadcast landscape has muddied the waters in ways that aren’t always obvious to the average football fan.

A little healthy competition is always good for consumers – after all, it didn’t take long for Kayo to launch once Optus had, admittedly with some difficultly, broadcast the 2018 FIFA World Cup.

But what the majority of A-League fans who insist Optus Sport will step into the breach fail to realise is that all the telecommunications provider is doing is re-broadcasting someone else’s content.

In other words, unless the A-League creates its own production arm, there’ll be no broadcast pictures for Optus Sport to transmit should Fox Sports decide to pull the plug.

And there’s a reason all this should have A-League watchers worried, and it has little to do with what we think of the current coverage.

It has much more to do with the existential crisis the FFA has seemingly unleashed upon itself.

FFA CEO David Gallop (left) and FFA Chairman Chris Nikou (AAP Image/Dan Himbrechts)

Forced to put a price on the cost of tuning into the A-League this season, a large number of fans have made clear that price is zero.

And there’s no going back once people work out they can get for free something they once paid for.

The cat is out of the bag.

With the June 30 deadline looming for details of an independent A-League to be released, it’s safe to say this is the most critical off-season ever.

And dinosaurs like me, who prefer to watch their cable subscription through a big-screen TV instead of dealing with not-always-reliable streams, have to face the fact that times are changing.

So too do the FFA. Their track record suggests it won’t be an easy transition.

The Crowd Says:

2019-05-30T02:42:25+00:00

Pedro

Guest


Spot on. Not sure why Foxtel gets so much hate, it is literally the only thing stopping the A league from folding.

2019-05-29T05:00:04+00:00

chaswest

Guest


yes, its back to the drawing board -- err cow paddocks that is

2019-05-27T12:06:28+00:00

anon

Roar Pro


What some of you have missed is that ratings are terrible on FTA for A-League. A-League producing their own content won't help them. Foxtel is not the problem. Simply, no-one wants to watch the A-League. Even when it's free no-one wants to watch. It's in huge trouble and all but dead in the water. Really, the A-League doesn't have 4 years to sort this out. Once it becomes evident that Foxtel isn't interested in renewing, players won't commit, sponsors will pull out, the few fans left will stop being invested in results

2019-05-27T04:36:30+00:00

r0bsta

Roar Rookie


Dazn is an online sports streaming service that I guess is similar to Kayo (only not owned by a cable/satelite broadcaster), or more closely, someone like BeIN Sports. They buy content and rights but AFAIK don't create their own broadcasts. I think the J Leauge deal would be similar to a potential working model put forward earlier in this thread, where the league creates its own content and then licenses that to DAZN - which would almost certainly be more profitable than selling rights to a production company such as Fox Sports.

2019-05-27T00:57:43+00:00

Mister Football

Roar Guru


Kangas Seven consistently wins Friday nights. Many reasons contribute to that, but their sport offering is one of those reasons, and that's why they pay big dollars for sport. They'll pay less in the future, for sure, but they will pay something. Last Friday, Seven won Friday evening/night with 38.1% of all viewers (that's a big number by the way). Here are the top five shows last Friday (National 5 City metro): 1. SEVEN NEWS, Channel 7 - 933,000 2. SEVEN NEWS / TODAY TONIGHT, Channel 7 - 829,000 3. NINE NEWS, Channel 9 - 772,000 4. NINE NEWS 6:30, Channel 9 - 763,000 5. SEVEN’S AFL: FRIDAY NIGHT FOOTBALL, Channel 7 - 602,000 Add regional and fox ratings to Seven's sport offering, and that game got about one million viewers. By the way, that's one million viewers averaged over three hours. We're not talking about 20,000 people streaming something for 10 minutes. Be assured, advertisers and sponsors are still very interested in those average one million viewers spread across three hours. When you wonder why a particular sport is attracting billions in broadcast revenue, well, the ability to regularly hold an audience of one million viewers for a three hour block is part of the reason. Add to that, a chunk of those viewers are tuning in for the evening news, might even tune in the previous night for team selections. Ah, it starts to make sense, that's why they pay the big bucks!

2019-05-27T00:36:37+00:00

Redondo

Roar Rookie


As someone else pointed out, Foxtel’s potential cricket customers were probably already subscribers. They might have made extra dollars if cricket was an add-on channel. Strangely, it’s conceivable they could lose more subscribers by dropping the A-League rather than cricket. Cricket fans might well stick around for AFL/NRL/Rugby even if the cricket disappeared.

2019-05-27T00:11:09+00:00

Paul

Guest


Well ultimately football, rugby and the other so-called "non-marquee" sports are paying the price for Foxtel's cricket folly. Sure, Aussies love their cricket but do they love it that much to pay to watch it? The ratings suggest otherwise. The uptake in subscribers has not been sufficient to justify Foxtel's cricket outlay and many of the new subscribers driven by the cricket went to the low-cost Kayo rather than traditional cable Foxtel. Ultimately, Cricket Australia will be laughing all the way to the bank while other sports miss out. Then again, this was probably bound to happen even without the cricket deal. I would not be surprised if Optus eventually get the A-League and pitch themselves as a "one stop shop" for all football fans in Australia but there are the obvious issues over production and it's not likely that Optus will offer nearly as much money as Foxtel has.

2019-05-26T13:17:02+00:00

oldpsyco

Guest


Far too much is attributed to Footballs TV ratings. TV ratings are falling across the board, due largely to the mismanagement and cost cutting. Why does football allow Television to run the sport when the evidence is clear they can't successfully run their own businesses. Television used to be a cash cow, now TV companies are growing broke mainly due to the dropping standard of the garbage they serve up to the viewing public. Football needs to take control of the game back, TV wants football for what it is, don't let them change it!!!

2019-05-26T11:17:13+00:00

AR

Guest


“The future is here, but no doubt some sports will cling on to FTA Tv.” This is genuinely hilarious. First, the FFA is not only clinging to Foxtel (literally it’s one true sugar daddy), but publicly announcing the need for more FTA presence. Work that one out. Second, of all major professional sports in Australia right now, soccer and rugby are equal dead last when it comes to being ready for the future landscape of broadcasting. The FFA’s desperate reliance on Foxtel is on life support as we speak. Competitors such as the AFL, have billion dollar FTA and Pay deals, massive digital deals, multiple radio, Kayo, live streaming for every game, stadium ownership, and its own media company with about 150 employees. But yes...Fuss says it’s all the other sports which are not ready for the future. Blimey. When it comes to the crazies, it’s gone from Smell. The. Fear. to Hold. My. Beer.

2019-05-26T10:29:18+00:00

Mister Football

Roar Guru


It's not about clinging on, if FTA wish to throw tens of millions of dollars at your sport to show a couple of games, well, it's money for jam, isn't it? Doesn't exclude you from taking money from one or two or three other broadcasters, whatever their poison. The other lesson from above is that consumers are wanting to pay less and less (or nothing) for their streaming. In a fragmented market, with zero barriers to entry, well that zero revenue spread out across many providers means minor sports shouldn't be expecting to earn too much.

2019-05-26T10:20:07+00:00

Nemesis

Guest


I'm glad you're finally understanding the problem with the tradition sports broadcast model. It is on life-support. With Foxtel, it's literally on life-support with News Corp having to provide $300,000,000 cash to keep the Foxtel doors open & minority shareholder Telstra saying "we've had enough, no more cash for you". In addition to the Telcos & ISPs, expect cashed up platforms like: YouTube, Amazon, Facebook, Twitter. Some of these have the same revenue model as FTA TV and rely on targeted advertising revenue; some similar to PayTV, which rely on subscription revenue. The additional advantage of the free online platforms - for global sports, you reach a global audience. Only a few days ago, Raheem Sterling was mentioning how the A-League & MLS is always being broadcast at the Man City Training Facility because the Time Zone fits with morning training. The future is here, but no doubt some sports will cling on to FTA Tv.

2019-05-26T09:52:39+00:00

Kangas

Guest


Sam Thanks for your reply I was just commenting that mr football said that 7 won the ratings with better homes and gardens and a movie , which is fantastic, but this is a soccer blog . Extrapolate from that what you will , but gardening shows are not the narrative of the blog . As for your mentioning rugby , both the codes of rugby are huge in nsw , it makes no difference to me whether they are on free to air as I don’t watch free to air , my kids never watch free to air either . The only generation of people I know who watch free to air are retirees , hence why the gardening shows are winning the ratings .

2019-05-26T09:41:39+00:00

Mister Football

Roar Guru


AFR dedicated its back page Chanticleer column to the current Foxtel situation. Some interesting points from this piece (worth a read of the full version I might add): - Several of these non-marquee sports are bound to suffer cash-flow problems as Delany uses the expiry of broadcast agreements to wield the hatchet on Foxtel’s annual cost base of about $2.6 billion. - in golden years... the pay-TV operator had average revenue per user of $107 a month. Today its ARPU is $78.56 - the most successful American tech company of all those to emerge in the past decade is Netflix...Netflix’s sharemarket value is 100 times last year’s earnings - News trades at less than one times next year’s revenue. - Nine subsidiary Stan. It has built a subscriber base of 1.7 million. But ... only makes serious money of about $40 million a year when it has 2.5 million subscribers. - Streaming services which don’t manufacture their own content are increasingly vulnerable to the growth in rivals such as DisneyNOW, - News Corp has the financial resources to pay for the transformation of Foxtel. But if progress is too slow the Murdoch family is sure to ask if it should throw good money after bad.

2019-05-26T09:01:05+00:00

sam

Guest


Mr F It is very difficult for some to understand what you are trying to say. If it doesn't fit with their narrative, they attempt to baffle with BS! Fact Both FFA and Rugby would kill to have a visible FTA presence - take that to the bank everyone.

2019-05-26T07:20:47+00:00

Mister Football

Roar Guru


Well, the key question is: does FTA offer the major sports anything? (and conversely do the major sports offer FTA anything?) For the time being, the answer remains yes. There is a reason why TEN has been trailing the other commercial FTAs this past decade. This might also explain why soccer fans still hold out hope that more than one game might be broadcast on FTA. They must still see some value in it. On the Rugby board, many mention the need to get on FTA. So we have this strange dichotomy, where on the one hand you have some people saying it's entirely irrelevant, and on the other, you have diverse sports fans clamouring to get onto it.

2019-05-26T04:23:41+00:00

Kangas

Guest


Mr f Re Your comment that channel 7 won the ratings last night .. interesting comment on mikes A league soccer blog , but I guess that fta tv still has something to offer many people. I looked up the guide for this Friday and it’s betters homes and gardens and an x men movie on channel 7 . Do you think 7 will win the ratings again ?

2019-05-25T23:40:09+00:00

Nemesis

Guest


Depends what you mean by 'slow burn'. Are you saying "slow burn" in sales for an industry that is 60 years old is a 40% decline over 6 years, across the most valuable consumer demographic for that industry? Then, yes; its a slow burn. But, you'll find it might take a while for a fire to do damage, but once it gets going, the building will collapse quickly.

2019-05-25T23:19:05+00:00

Mister Football

Roar Guru


You are confirming everything I just wrote.

2019-05-25T22:41:52+00:00

Nemesis

Guest


For the age demographic 16-39, the Top 5 Shows on these dates shows a 42% decline in TV ratings. Scary to imagine the drop in advertising dollars with such a destruction of viewing numbers. PS: The viewing numbers in Melb for AFL on Fri over the 6 years dropped 25%.. whilst the money paid for the content by the broadcaster has more than doubled. The numbers in Sydney for NRL shows a 40% drop in viewing on FTA TV on this night. Yup. FTA Tv is still going strong!

2019-05-25T22:31:37+00:00

Nemesis

Guest


"Last night 7 won the ratings, as did 7Mate on the multi-channels.." Let's review Fri night's ratings. The Top 20 shows on FTA TV on Fri, 24 May 2019 attracted a total of 10.2 million viewers. That's a 25% fall on the number of viewers who tuned in to the Top 20 FTA TV shows on Fri, 24 May 2013. 25% decline in 6 years. Netflix only entered the Australian market in 2015. You only have to look at the FTA TV Guide to realise the platform is dead. There is absolutely nothing being broadcast on FTA Tv that is compelling viewing. It's just mind-numbing reality TV, tabloid current affairs shows & news that any intelligent person has already watched hours before it is broadcast on FTA TV. But, no doubt, there will be a group of Aussies who will still cling on desperately to their FTA remotes, whilst they have their knitting on their lap and the Herald Sun on the coffee table.

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