The battle over sporting content for TVs, smartphones, tablets and IPTV devices is set to heat up today, with Foxtel, Telstra and the Seven Network, set to be the big winners when the AFL announces the winners of their auction for the rights to AFL football.Foxtel, who are banking on ALF football, have been forced to lift their bid for games in an effort to stall a decline in subscribers.
Five years ago, Seven, Ten and Foxtel paid $780 million for the sporting rights. This time a $1 billion figure is being flaunted by the AFL with many questioning the value of a $1 billion dollar payment.
For Foxtel it’s a case of survival, for Telstra it’s a case of building out their content offering in an effort to sell more broadband services linked with sport and entertainment content.
The big winners could be Lachlan Murdoch and the Ten Network, who earlier this month pulled out of the bidding claiming the price was too high.
Analysts say the online rights will become more important, once the national broadband network brings super high-speed internet into homes. The big issue in the future could be free Vs paid for content on IPTV networks.
”It is really up to the AFL to decide the terms for contracts and I think we are still a few years away from the position where TV rights shift onto the internet,” analyst Tim Renowden, of Ovum, said.
”Live streaming rights will become an increasingly important way for fans to watch sport over the next five years and it’s possible that the free-to-air broadcasters have missed a trick here.” he said.
The issue today is how much Telstra and Foxtel has paid for the rights and whether Telstra will use their investment to lure consumers to a Smartphone or Tablet with the offer of Free TV viewing of ALF football on a Telstra device such as their T Box or BigPond TV service which is available on Samsung and LG TVs
Telstra paid $60 million over five years under a deal signed in 2006 that gave it the right to show full match replays, match highlights and club content on mobile phones and the internet.
It’s expected that they will pay over $100 Million for the IP rights for the next five years.
Currently Telstra has exclusive rights to publish live scores and player statistics online and package quarterly highlights. But new applications have since emerged for smart phones that also deliver live scores, such as SportsMate’s Footy Live app.
”From what we understand [Telstra] would not be able to have exclusivity over live scores. But we really don’t know what is going to happen at the moment,” a director of SportsMate, Patrick Fitzgerald, told BusinessDay.
Fairfax Media publication The Age, said that a grey area is whether free-to-air television delivered over the internet, known as internet protocol television (IPTV), would be affected by Telstra’s exclusive online rights.
At present, free-to-air digital television can be integrated with internet content, but is still transmitted to houses through radio airwaves. This would not count as internet streaming, according to a spokesperson for iiNet, which offers Fetch TV plans.
Deutsche Bank analyst, Andrew Anagnostellis, told Fairfax Media that IPTV rights would come under increasing scrutiny.
”You can imagine in a few years, particularly in an NBN world, it will become increasingly important so these rights will have more and more value,” he said.
He said that even though major sports events were expensive programming, free-to-air networks needed them to compete with the internet.
Oztam statistics show about 3.3 million people watched last year’s drawn AFL grand final, with about 2.6 million returning for the rematch the following week.