Post by QPR Report on Aug 11, 2009 6:44:40 GMT
Guardian
Premier League TV model at risk as websites threaten lucrative deals• Premier League faces challenge from illicit websites
• Government urged to do more to protect match rights
Owen Gibson The Guardian, Tuesday 11 August 2009 Article
It is the negative flipside of all that cringeworthy marketing speak about "expanding the footprint" and "leveraging the global brand". When Chelsea kick off the Premier League season against Hull City on Saturday, they will be watched not just by thousands in the stadium and millions more who have paid to watch live on TV, but by up to 1.5m viewers around the world tuning in for nothing via their PCs.
Collectively they could one day threaten the entire business model of the Premier League, one that has driven its growth over the past 17 years, and they are the reason why it is fighting furiously behind the scenes at home and abroad to seize back the initiative.
The revenue model that brought in a record £2.7bn under the current round of rights deals – expected to be broken again when overseas and internet deals are added to the £1.97bn already banked for the three seasons from 2010 – is under threat thanks to changes in technology and consumer behaviour. The seriousness of the threat has grown over the past decade as the digital revolution first hit the music industry, then the newspaper business and now film and television.
Thanks to the popularity of the BBC's iPlayer and broadband, watching TV on a computer screen has become a mainstream activity. On any given Premier League weekend, message boards buzz with information about where to watch matches for nothing via websites often hosted in China. In a report compiled for leading rights owners last year, which warned that "digital piracy is one of the most important threats facing sports rights owners today", 177 unauthorised sites were identified.
They not only undermine the business model of the Premier League's lucrative domestic and overseas rights deals, but make a mockery of the long-standing Saturday 3pm "blackout" designed to protect lower league attendances. The Premier League has been determined not to repeat the mistakes of the music industry, which was slow to react. It was still squandering millions on "fruit and flowers" when the ground crumbled beneath it as illegal filesharing took hold.
"Good quality content is in the interests of everybody – fans, broadcasters, ISPs as well as the technology companies which sell equipment," said a Premier League spokesman. "So, like all content providers, we are keen that both the legislators and the regulators recognise that there has to be a fair market that serves the fan whilst keeping standards high."
They have taken a twin track response: hunting down and trying to close the sites responsible, while lobbying government for tighter copyright controls. The next few months will be crucial. Alongside other major rights holders including BSkyB and ITV, the Premier League was one of a so-called "gang of five" rights owners who called on the government to bring forward legislation encouraging internet service providers to take more responsibility. Following the publication of the Digital Britain report earlier this year, some of those rights owners now fear the momentum has been lost and will appeal to Stephen Timms, newly entrusted with ministerial responsibility for introducing legislation arising from it, to do so before next year's general election.
Meanwhile, the Premier League's class action lawsuit against Google-owned video sharing website YouTube rumbles on in the United States. Originally launched in 2007 and joined by the estate of Elvis Presley, among others, it will ultimately hinge on whether judges rule that the site should have taken responsibility for removing non-copyrighted clips itself or if it is enough that it promises to do so once they have been identified by the rights owner.
One advantage the Premier League and sports rights owners have over the music and film industries is the fact that their value lies in live action. Whereas an album or film only needs to be copied once before the potential exists for millions of perfect illicit copies to be distributed over the internet, the appeal and value of a Premier League clash diminishes drastically as soon as the final whistle goes. That has led the Premier League to take the lead in a cat and mouse game with illicit sites around the world whenever a match is in progress. Rather than targeting individuals, the Premier League goes after the sites themselves. NetResult, the company it contracts to track down and close illegal feeds, estimates an 85% to 90% success rate in shutting them down.
"The Premier League has taken the lead in trying to get to grips with this," said NetResult's chief executive, Christopher Stokes. "There are two ways to deal with it – getting to grips with piracy, but also in making sure that more of your content is available online."
Many of the most popular illicit sites emanate from China and around half of all viewers are estimated to be from that country. The Premier League promised to ensure that at least one package of live rights in China would be made available free to air rather than confining coverage to pay television. Themove was primarily seen as an attempt to catch up with the NBA and rival football leagues by expanding its reach, but it could also mean that Chinese state television for the first time has a vested interest in protecting the rights.
But while the Premier League has been proactive in tackling the problem, some feel it has been less enlightened in other ways. While US rights owners, including MLB, NFL and NHL, have been able to build lucrative online businesses around their rights, the need for the Premier League to maintain the model that has kept Sky's billions rolling in has made it more conservative. This, according to some critics, could leave them trying to hold back the tide - desperately trying to protect a business based on selling exclusive live rights while failing to come up with a new one for the digital age.
"The problem is that the central organisation in the Premier League is very weak, compared to the US. [Chief executive] Richard Scudamore is very limited in his power and kept on a tight leash by the clubs," said Cass Business School sports economist Professor Stefan Szymanski. "They have voted for Sky time and time again, hanging on to nurse's apron strings for fear something terrible might happen."
He argues that unless the Premier League takes a more forward looking attitude to exploiting its rights across the internet, video games and television, it could lose out in the race to engage younger fans. "The key thing about the attractiveness of a sport is the atmosphere. The sport that communicates that atmosphere most effectively, whether on television or in a PlayStation game, is the one that will be most successful." Meanwhile, Stokes said, complacency was not an option: "In this business, you learn to expect the unexpected. In the space of a few months, everything can change
www.guardian.co.uk/football/2009/aug/11/premier-league-tv-rights-deals-websites
Premier League TV model at risk as websites threaten lucrative deals• Premier League faces challenge from illicit websites
• Government urged to do more to protect match rights
Owen Gibson The Guardian, Tuesday 11 August 2009 Article
It is the negative flipside of all that cringeworthy marketing speak about "expanding the footprint" and "leveraging the global brand". When Chelsea kick off the Premier League season against Hull City on Saturday, they will be watched not just by thousands in the stadium and millions more who have paid to watch live on TV, but by up to 1.5m viewers around the world tuning in for nothing via their PCs.
Collectively they could one day threaten the entire business model of the Premier League, one that has driven its growth over the past 17 years, and they are the reason why it is fighting furiously behind the scenes at home and abroad to seize back the initiative.
The revenue model that brought in a record £2.7bn under the current round of rights deals – expected to be broken again when overseas and internet deals are added to the £1.97bn already banked for the three seasons from 2010 – is under threat thanks to changes in technology and consumer behaviour. The seriousness of the threat has grown over the past decade as the digital revolution first hit the music industry, then the newspaper business and now film and television.
Thanks to the popularity of the BBC's iPlayer and broadband, watching TV on a computer screen has become a mainstream activity. On any given Premier League weekend, message boards buzz with information about where to watch matches for nothing via websites often hosted in China. In a report compiled for leading rights owners last year, which warned that "digital piracy is one of the most important threats facing sports rights owners today", 177 unauthorised sites were identified.
They not only undermine the business model of the Premier League's lucrative domestic and overseas rights deals, but make a mockery of the long-standing Saturday 3pm "blackout" designed to protect lower league attendances. The Premier League has been determined not to repeat the mistakes of the music industry, which was slow to react. It was still squandering millions on "fruit and flowers" when the ground crumbled beneath it as illegal filesharing took hold.
"Good quality content is in the interests of everybody – fans, broadcasters, ISPs as well as the technology companies which sell equipment," said a Premier League spokesman. "So, like all content providers, we are keen that both the legislators and the regulators recognise that there has to be a fair market that serves the fan whilst keeping standards high."
They have taken a twin track response: hunting down and trying to close the sites responsible, while lobbying government for tighter copyright controls. The next few months will be crucial. Alongside other major rights holders including BSkyB and ITV, the Premier League was one of a so-called "gang of five" rights owners who called on the government to bring forward legislation encouraging internet service providers to take more responsibility. Following the publication of the Digital Britain report earlier this year, some of those rights owners now fear the momentum has been lost and will appeal to Stephen Timms, newly entrusted with ministerial responsibility for introducing legislation arising from it, to do so before next year's general election.
Meanwhile, the Premier League's class action lawsuit against Google-owned video sharing website YouTube rumbles on in the United States. Originally launched in 2007 and joined by the estate of Elvis Presley, among others, it will ultimately hinge on whether judges rule that the site should have taken responsibility for removing non-copyrighted clips itself or if it is enough that it promises to do so once they have been identified by the rights owner.
One advantage the Premier League and sports rights owners have over the music and film industries is the fact that their value lies in live action. Whereas an album or film only needs to be copied once before the potential exists for millions of perfect illicit copies to be distributed over the internet, the appeal and value of a Premier League clash diminishes drastically as soon as the final whistle goes. That has led the Premier League to take the lead in a cat and mouse game with illicit sites around the world whenever a match is in progress. Rather than targeting individuals, the Premier League goes after the sites themselves. NetResult, the company it contracts to track down and close illegal feeds, estimates an 85% to 90% success rate in shutting them down.
"The Premier League has taken the lead in trying to get to grips with this," said NetResult's chief executive, Christopher Stokes. "There are two ways to deal with it – getting to grips with piracy, but also in making sure that more of your content is available online."
Many of the most popular illicit sites emanate from China and around half of all viewers are estimated to be from that country. The Premier League promised to ensure that at least one package of live rights in China would be made available free to air rather than confining coverage to pay television. Themove was primarily seen as an attempt to catch up with the NBA and rival football leagues by expanding its reach, but it could also mean that Chinese state television for the first time has a vested interest in protecting the rights.
But while the Premier League has been proactive in tackling the problem, some feel it has been less enlightened in other ways. While US rights owners, including MLB, NFL and NHL, have been able to build lucrative online businesses around their rights, the need for the Premier League to maintain the model that has kept Sky's billions rolling in has made it more conservative. This, according to some critics, could leave them trying to hold back the tide - desperately trying to protect a business based on selling exclusive live rights while failing to come up with a new one for the digital age.
"The problem is that the central organisation in the Premier League is very weak, compared to the US. [Chief executive] Richard Scudamore is very limited in his power and kept on a tight leash by the clubs," said Cass Business School sports economist Professor Stefan Szymanski. "They have voted for Sky time and time again, hanging on to nurse's apron strings for fear something terrible might happen."
He argues that unless the Premier League takes a more forward looking attitude to exploiting its rights across the internet, video games and television, it could lose out in the race to engage younger fans. "The key thing about the attractiveness of a sport is the atmosphere. The sport that communicates that atmosphere most effectively, whether on television or in a PlayStation game, is the one that will be most successful." Meanwhile, Stokes said, complacency was not an option: "In this business, you learn to expect the unexpected. In the space of a few months, everything can change
www.guardian.co.uk/football/2009/aug/11/premier-league-tv-rights-deals-websites
