Will Justin.tv Destroy Sports TV Rights Deals?

from the learn-to-serve-the-demand dept

Last month, Mike wrote about how the English Premier League was making threatening overtones towards Justin.tv, after it discovered some users on the site were streaming broadcasts of its soccer matches. It's the usual stuff from sports leagues, complaining that the sites aren't doing enough to stop piracy, and that their safe harbor shouldn't protect them, and that the DMCA takedown process isn't good enough. Now, a piece in The Guardian wonders if the large-scale piracy, along with a spending slowdown, will hit the value of TV rights deals when they come up for renewal, with broadcasters unable to justify the same level of spending should viewer figures fall.

This scenario isn't hard to imagine, but should it occur, it will be thanks to a lack of business acumen, not piracy. These sites exist, and thrive, because they serve demand untapped by the Premier League and its rightsholders. For instance, the rights situation means that in England -- where the league's based and its games played -- fewer games are broadcast on TV than in many places in the world. Here in the US, nearly every match is broadcast each weekend; just a handful make it onto UK TV screens. British pub owners tried to serve the untapped demand for this by buying satellite systems from foreign countries, but the EPL shut that avenue off in the courts. Likewise, users in the UK and elsewhere turn to sites like Justin.tv because they don't have other options. The match they want to see isn't available on television, or they're not near a TV set when the match is being played. I'd argue this drives use of the services much more than a desire for free content does.

The rights situation domestically in the UK is the way it is because of the long-held view that putting games on TV will hold down attendance; but the small stadium sizes and increasingly geographically distributed fan bases (along with high ticket prices) do this already. And indeed, the experience of other sports leagues around the world would indicate that giving fans the ability to watch their teams' games on television does little, on its own, to hurt attendance. That sort of view seems to color the entire TV rights situation for the Premier League: it tries to manufacture some sort of scarcity in an attempt to increase its revenues. But the popularity of sites that make broadcasts available online makes it clear they'd be better off answering this demand with services of their own.

Here's a novel idea: instead of trying to crack down on the likes of Justin.tv, why not require rightsholders to offer free streams of games as parts of their deals? Then, the Premier League and its broadcast partners get to serve this demand, instead of Justin.tv or Chinese P2P services, and get to capitalize on it through advertising or other means. It might have some effect on pay services by giving fans with the least willingness to pay a free service to use, but again, I'd argue that most people would still prefer to watch their teams' games on a bigger screen and in higher quality enough to pay for it. And the additional fans the services would reach could make new converts to paid services as well. Whatever the EPL decides to do, it's impossible to understand how it thinks it can benefit by alienating fans and making it difficult, if not impossible, for them to follow their teams.

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

12 Comments | Leave a Comment..