internet television

01 November 1999

Felicity Reeve




The hype regarding the Internet has finally permeated the public at large but any discoveries that are made will only confirm what sports fans have long known - there is no better medium than the Net for providing the wealth of statistics, inside information and up-to-the-minute data that the true sports fan requires. To date sports fans have been ahead of the game (a fact which is underlined by the plethora of unofficial sports sites on the Net). Sports rights holders (like the major UK retailers) have been slow to get on line and exploit the existing commercial opportunities of the Internet. However, more exciting innovations await and soon statistics and on-line kit sales will be only a sideshow to the main act of the sports event live on line. In time, fans will be able to choose their seat, their camera angles and commentators, visit the club shop and sponsor's tent and even order their half time snack on line - all from the comfort of their couch. Internet TV is coming and its arrival will have huge implications for the traditional sports broadcast market.

At present, although there is a ready-made market for sport on line, the low capacity or bandwidth of domestic telephone lines means that programmes can only be shown at 2-3 frames per second whereas a video is usually transmitted at 8-12 frames per second. Because of the time delay the results are rather like watching a security video and obviously com- pare poorly with coverage on satellite and cable. As a consequence of the current technical limitations on Internet broadcasting, attention in the sports broadcasting industry (and the broadcast industry as a whole) has been focused almost entirely on the much trumpeted launch of digital television and the new commercial opportunities that it offers. Whilst it cannot be denied that digital television offers some very interesting opportunities to sports broadcasters and rights holders - most notably the ability to leverage additional revenue by using the 200 or so additional channels to make more content available to viewers and by exploiting the interactive quality of digital television to offer new forms of programming -there are those who see digital television as largely an irrelevance and view Internet television as the broadcast medium of the future. For those who subscribe to this view, the most interesting aspect of digital TV is that it will be the pretext for the entry of a good Internet gateway to the home. The strongest argument in support of the view that Internet broadcasting will be the medium of the future is the fact that ten times as many people in Britain surf the Internet than have subscribed to digital television. In the last 12 months the Internet has ceased to be viewed as the exclusive domain of academics and anoraks and has become part of mainstream culture.

Whilst technical limitations may currently make the Internet the third choice (after the television and radio) for monitoring sports events, the technology industry does not stand still. Despite the current dispute between BT and the Office of Telecommunications over the rollout of BT's ADSL (asynchronous digital subscriber line) technology, it is only a matter of time before the telecommunications network in this country is upgraded to the broadband capability required to transmit video and other high volume data. (Only recently, for example, Kingston Interactive Television announced its plans to extend its interactive television service using ADSL technology to deliver digital broadcast multi-channel television, foist Internet access, e-mail and local link services including news, information, entertainment and shopping to its 150,000 subscribers).

When the technology becomes available to support Internet TV, sports programming will be the "must have" or "killer" content that will be used to drive the rollout of new broadcast web sites in the same way that it has been the driver for selling subscription to the pay TV and for set top box sales. This will obviously put rights holders (at least in sports with a proven record with audiences) in a very strong position - assuming of course that the rights holder has not already sold its valuable Internet rights to a broadcaster who saw the future before the rights holder did.

It is worth pointing out here that it is not always obvious to a rights holder that it has "sold" its Internet rights. The rights holder may have quite sensibly carved out the Inter net from the scope of the rights which it ha granted to its broadcast partners but nonetheless granted those partners exclusive rights of access to its ground or stadium for the purpose of recording matches or events that are played there. Even though the broadcaster may be, prohibited from broadcasting the coverage it has produced over the Internet, it will be able to prevent the rights holder appointing anyone else to produce coverage for Internet distribution or from producing that coverage itself.

Internet TV offers a host of opportunities to the rights holder beyond the possibility of exacting ever higher rights fees from the broadcaster. The interactive qualities of the Internet will open a host of new commercial possibilities to the rights holder. It will be able to offer merchandise and refreshments to the home viewer just as it does to the spectator at the ground. If the rights holder doesn't wan to run these commercial outlets itself, it car grant concessions to others to do so. It will be able to sell advertising before, after and during its coverage, charge to provide statistics on pre-match interviews, run contemporaneous competitions etc.

The opportunity to take both traditional forms of commercial activity on-line and to develop new activities is endless. Of course like every opportunity, the Internet also offers challenges. One of the hardest of these will be the decision whether or not to break with traditional broadcast partners. Another will be deciding the correct fee arrangement for the exploitation of Internet rights. Whatever decisions are ultimately taken, the Internet should be a serious component of any current broadcast or commercial strategy.

Written by Felicity Reeve. First published in Sports Marketing in November 1999.