Cracks appearing in the Great Wall of Pay-TV
By Shawn Liew
More and more video streaming services are entering into the fray to secure sports media rights, straining the traditional pay-TV model
It would appear that the proverbial bullet has been dodged — for now anyway.
As the rights auction for the English Premier League draws to a close in the UK, conspicuous by its absence in the bidding process was Amazon, which was heavily expected to submit a bit for live streaming rights to one of the most popular football leagues in the world.
Recent developments, however, suggest that this might just be the calm before the storm, as over-the-top (OTT) and other non-traditional platforms prepare to enter the sports broadcasting arena.
Amazon has already secured streaming rights for American football and tennis; YouTube’s live streaming service now features basketball, golf and baseball channels; and Facebook announced the hiring of a TV network CEO in January this year in a bid to land worldwide sports deals.
What does all this mean? For starters, expect a paradigm shift in media rights ownership, and a potential crumbling of long-entrenched pay-TV business models for sports distribution.
In Asia-Pacific, many sports fans, particularly those of the football persuasion, continue to be compelled to sign up to expensive pay-TV bundles for their football fixes.
Think of it this way: Where once you had to purchase a combo package of fresh produce and healthcare products just to get a carton of beer, you could now not only just buy a carton of beer, but choose different brands within the carton.
Sounds implausible? Going back to the example of football, many national football organisations today negotiate media rights collectively; that is, they sell the broadcast rights to their respective leagues as a whole.
What happens when football clubs break away from this hierarchy, and are allowed to negotiate their own media rights — including live streaming — with the likes of Amazon?
For a nominal monthly fee, video streaming services can offer exclusive access to the matches of specific football clubs on an a la carte basis. In Asia-Pacific, where idolatry for football clubs such as Liverpool and Manchester United border on the fanatical, this will have wide-ranging repercussions for the pay-TV industry.
And while sports viewing, being the communal activity it represents, may still be best enjoyed on the big TV screen, there is nothing to suggest that viewers are resistant to the notion of viewing live sports on mobile devices — given the not-insignificant incentive of having to pay less.
As the exclusive domain for pay-TV for so long, it is perhaps appropriate to see sports as the Great Wall of Pay-TV. However, as the way fans consume sports content continue to be revolutionised — as with any other content genre — cracks are beginning to appear.
Traditional pay-TV operators need to think of new and innovative ways of reaching out to sports fans. To seal or repair cracks within the wall, they need to take the bold step of looking beyond traditional business models. Otherwise, the likes of Amazon are waiting in the wings to tear down the old wall and build an entirely new one.
