Are Foxtel And Ten Going To Dominate Australian Sports TV?

Are Foxtel And Ten Going To Dominate Australian Sports TV?

One of the most interesting elements of the upcoming sporting broadcast rights deals is that they won’t kick off for two years, and look likely to last for five. Can we really look so far into the future to understand what both free-to-air and pay television will look like in two years, especially in a media environment so filled with uncertainty?

AFL football image via Shutterstock

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

Foxtel is no doubt hoping it can as it positions itself for a range of different scenarios.

It’s rumoured that the new NRL rights deal could be worth as much as A$1.7 billion, a large increase on the A$1 billion for the previous deal.

The AFL and NRL are both set to strike five year rights deals, with the AFL’s to run from 2017 to 2021 and the NRL from 2018 to 2022.

While some argue that the Nine Network will retain the free-to-air rights for the NRL, the recent Foxtel share purchase into Ten could see the two establish a combined deal. This would see Foxtel and Ten make one sole bid for the rights for each of the codes, controlling the way sport is distributed.

Live Sport Is King

Analyst firm UBS recently placed a halt on any growth by the free-to-air Australian television networks in the coming year. It cited Netflix and its rapid growth in uptake locally as a key indicator.

Despite being a threat to the current television entertainment broadcast model, Netflix appears disinterested in sport. Netflix has continually made it clear that it doesn’t see its future in live streaming and in particular sports, without ruling it out. In the company’s earnings call earlier this year the message was the same.

Ted Sarandos, Netflix chief content officer, stated:

“I think part of our core consumer proposition is on demand. We make viewing certain kinds of content better, because they’re on demand. And I don’t know that on demand sports is markedly better than live sports. So that’s why we haven’t been that excited about it. Why we haven’t chased it. There’s economic reasons as well. I think in general, that sports is great for live television.”

Reed Hastings, Netflix CEO, has also weighed into the discussion:

“If we can anchor the entertainment side for movies and TV shows for every consumer and somebody else, or other set of leagues, anchor the sports part, which is still over the Internet, then the Internet TV proposition is even more powerful for consumers.”

Telstra too, during its announcement for Telstra TV, said live sports would be a key reason for customers to stay with free-to-air and pay TV (Foxtel) in Australia.

This raises a few questions in regards to Australian sport broadcasting rights. Who could or in fact will be, that “somebody else” that Netflix suggests, and how will it change the way sports are broadcast to Australians in the future?

Digital Rights

Telstra currently holds digital rights for both the NRL and AFL. In addition, both leagues also provide live streaming of games via smartphone and tablet apps, in conjunction with Telstra. Arguably it will be the digital rights that will be closely looked at as part of the new rights agreements.

This is due to the change of focus by the Australian television industry in relation to distribution via digital platforms. All free-to-air networks have catch-up services available and two of the three commercial free-to-air networks are involved with video-on-demand (VoD) services. This shows some of the older players have begun to adapt to the changing media landscape .

Foxtel’s share purchase of Ten raises some very interesting questions as to the future for both Ten and Foxtel, particularly for sport broadcasting in Australia.

Netflix is clearly leading the VoD space in Australia. Both Seven and Nine have stated their intention to be in the space, with respective joint ventures in Stan and Presto. Foxtel is partnered with Seven West Media on Presto, and has also offered Ten a 10% stake in Presto. Nine has partnered with Fairfax on Stan. But both services are well behind Netlix and it’s unclear if both will survive in the future.

Ten is yet to move into the VoD environment. The market is arguably already flooded, and still harmed by piracy. Ten could use its now strong association with Foxtel to establish a live streaming and VoD service that is focused on sport. This is a market not established in Australia, and due to the “live” element, not harmed by piracy.

This could also become part of the broadcast rights that Foxtel and Ten present to the AFL and NRL; to incorporate the digital rights. A move like this would potentially remove Telstra, a 50% stakeholder in Foxtel, as the digital rights holder for the two codes.

Ten has already attempted a sports only channel, OneHD, but it failed. There are now more advantages and options for it to realign its focus with sport once again.

Not only would the new services work for the large sporting leagues, like the AFL and NRL, there’s also potential for minor sports codes, some of which were axed by the ABC recently due to budget cuts.The Conversation