A brave new world, or financial freefall – that is the question that faces all sports as the digital revolution in broadcasting gathers pace. But while heavy hitters such as AFL and NRL have fiscal security in the shape of long-term, lucrative deals with “traditional” media to help ease the transition, for others there is a need for speed.
Football, for example, has been holding very detailed discussions regarding an OTT (Over the Top) broadcasting set-up. With the clock already ticking on its one-year extension with Fox Sports, the perennial under-achiever of Australian sport is pondering the benefits of bringing its content in-house, and selling direct to the consumer.
It is believed the plan is to bring the entire “football family” under one roof – including coverage of all competitions from the top down to the lower reaches of the NPL and even grassroots football, along with the registration process for the sport’s two million-strong playing base.
It is a whole-of-game platform which would bring together all the sorts of content normally distributed via social channels, and – crucially – it would be monetised by those platforms, not football. It is hoped this can finally solve the conundrum of how to connect the base to the elite, for so long the game’s missing link.
This is the sort of captive market that can prove attractive to advertisers, and big media investors. But as with all new ventures, there is considerable risk.
Hunter Fujak, a lecturer in sports management at Deakin University, says while the idea of controlling your own content is alluring, it is vital to get the fundamentals of broadcasting right in order to achieve success. “The idea you can just record it, broadcast it, and people will show up is a bit of a mirage,” he says. “Broadcast is an outcome of a sport’s popularity, not a driver. Fundamentally, there has to be a group of people who want to watch your content.”
However, he argues that of the codes outside the big two of AFL football and rugby league, football is in the best position to make a go of OTT. “Seven per cent of Australians are uniquely interested in football and no other code. That compares to only 2% with rugby union, because there is a high overlap with league. The latent group of consumers underpinning the code is stronger for football. That unique tribe is there.”
But with opportunity comes a big challenge. Fujak’s PhD research (which was limited to Sydney only) showed that of all football fans, only 6% are uniquely fans of the A-League. Thirty-four per cent are interested in overseas competitions, while 60% categorise themselves as interested in both. This seems to confirm the theory that A-League ratings dropped off when Fox Sports lost the English Premier League rights to Optus – a split which forced consumers to decide where to put their money.
A further problem in going down the OTT road is the cost of producing the live broadcasts on game days.
In 2020, only Tennis Australia and V8 Supercars produce their own content, and there are just a handful of companies that production can be outsourced to. The alternative is purchasing your own trucks, cameras and studios, which of course is a costly business.
Shane Mattiske, adviser to the sports media industry and a former acting CEO of the NRL, agrees the transition process is a tricky one. “There’s clearly a shift in the broadcast landscape, accelerated through Covid, but a better model would be to find a blend of traditional broadcast with the guaranteed rights fees, and an OTT model where you can deliver a large breadth of content – to allow passionate fans to delve deep into that pool.
“The US sports like the NBA have massive fan bases that deliver a much better commercial model. In Australia, it’s smaller, and the pay-TV model works because sport is part of a bundle of other sports and entertainment offerings. So there is cross fertilisation, with an audience that is there in advance to build scale. With OTT, revenue is directly attributable to that sport.”
But Mattiske also sees advantages for football. “There are two million participants and the average rego [registration] fee is around $300 – so you have got a $600m football economy just around regos. That’s massive. The sport needs to reconnect and ensure it functions and works as a holistic entity. Football, more than any other sport, needs to focus on that link, because if you offer a commercial partner such as Amazon the ability for them to build a direct relationship with two million Australians, then that is very attractive.”
That sort of third party investment, or a carriage partner, is probably the key to any OTT platform becoming reality for football. Already, leagues such as the one in Ireland have developed one – in their case in partnership with RTE Television.
With the current Fox deal due to run out in July 2021, football is already looking at aligning the professional and grassroots competitions to a winter timetable. This could help, or hinder, OTT’s development. But one thing is sure: football can no longer fully rely on the traditional dividend provided by traditional broadcast models.
Whether it is in part, in full, or in partnership, its future appears to be heading online. New and cheaper technology means producing content has rarely been easier or cost effective. This has been evidenced by A-League clubs starting to host their own pre-game programmes.
But it could all hinge upon whether that oft-quoted two million playing base is as keen to watch the game as it is to play.