In the wake of the Optus TV Now Federal Court ruling, content owners like the NRL and AFL must acknowledge they can’t build a wall around their product, according to a leading Australian technology expert.
BuddeComm managing director Paul Budde likened the changing environment around sports rights to what the music industry has experienced over the past 15 years.
“The music world has adapted,” he said. “Content owners have to start looking at different business models. Monopolistic rents and prices will have to change. The onus is on the Hollywood studios and sports bodies.”
Last week the Federal Court ruled that Optus’ TV Now service, which allows people to record and watch free-to-air television on their computers and phones, had not breached copyright law because the users were responsible for recording near-live AFL and NRL games and they were made forprivate and domestic use. Telstra, which has exclusive online and mobile rights deals with both the AFL and NRL, is appealing the decision along with the sports bodies.
Budde said the battle over this issue is one between “giants” and Telstra is obviously worried about its investment in sports rights. “But it’s in their favour if content was made more readily available,” he said. “In the end, people are using telcos more.”
Tesltra paid the AFL $153 million and the NRL around $4 million for their online and mobile rights, although the NRL is currently renegotiating a new deal. Telstra also holds rights to the V8 Supercars, thoroughbred racing and netball, while Cricket Australia’s mobile rights are held by Vodafone with that deal expiring in 2013. In 2011, Football Federation Australia signed a digital partnership and sponsorship with Optus.
PHD chief executive Barry O’Brien said the Federal Court’s decision will have a massive impact in terms of what sports bodies can charge and “what you can expect as a rights holder”. “It devalues the product,” he said. “It changes the whole strategy of negotiating [new sports rights deals].
It’s an amazing opportunity for Optus to broaden its offering.”
O’Brien said it is a possibility that sports rights could end up in a situation like that of the music industry, and expects “a lot of lobbying on this”. “It could take years before it gets to the High Court,” he said.
Fusion Strategy managing director Steve Allen disagreed with the notion that the sports rights market will become like the music industry, arguing people who want to watch sport on their mobiles “aren’t prepared to wait an hour, 30 minutes or five minutes”.
“Sport is not like music, sport is a ‘now’ thing,” he said. “This is not about pirating, it’s about retransmitting something that has already been transmitted.”
Allen believes the Federal Court ruling will be “probably overturned on appeal”, and said the main issue relates to the recording and timeshifting of live sport.
“The decision could be used as a precedent anywhere in the world,” he said. “If the sporting codes can’t have it repealed, it will diminish the value of their rights. It will be a major negotiating issue.”
This article first appeared in the 10 February 2012 edition of AdNews. Click here to subscribe for more news, features and opinion.
Follow @AdNews on Twitter for breaking stories and campaigns throughout the day.
Have something to say? Send us your comments using the form below or contact the writer at adnews@yaffa.com.au
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.