Sports rights aren’t getting any cheaper and there’s more competition from diverse media channels that want to get in on the action. Telstra’s director of digital media and content Adam Good, talks digital sports rights, the challenges of monetisation, and bringing second screen digital experiences into stadiums.
AdNews: What has changed in sports rights and what are the opportunities for revenue streams beyond traditional broadcast?
Adam Good: “We have the IPTV and IP digital rights for AFL, NRL and racing. It’s safe to say that in the five years since we purchased those rights the world changed. So we monetise the rights through the creation of official website products, mobile and tablet apps, and IPTV on demand channels. We monetise those through three areas – subscription models that are pay weekly or pay monthly, ads and sponsorship and the third model is syndication of content through third party deals.
We’ve seen the move to so much content being delivered over IPTV now that so many other media entities are starting to be interested in digital rights whether its pay TV or free to air rights. A number of years ago it was the telcos interested in pushing content on connected devices – now all media entities are interested in rights.
AdNews: How does that increase in interest put pressure on what Telstra has to offer in terms of content?
Adam Good: On the sport side of things, we work closely with the AFL and NRL – their strategy is they want close relationships with their fans. If they can provide 24/7 experience that is great for fans and there is monetisation there. So the partnerships we have are with the official sports bodies. Then we create the media experiences around that. The football codes are becoming sports publishers, but it’s driven by what the fans want, we want to delight customers and get them closer to their passion points and sports is a really big part of that. If they can’t get to a game, the next best thing is a high definition TV but if you can’t get to that, people consume it on the go, on the bus or train, wherever they can. We get good insights that fans are really enjoying being able to watch wherever, like on a tablet outside in the garden when you’re having a BBQ not having to go inside into the lounge.
Because it’s digital we can overlay products, like stats and tipping and this year we started to provide second screen experiences in the stadiums themselves. We’ve invested in wi-fi enabling in some of the bigger stadiums in Australia, so when you enter the stadium you can connect and we’re looking at ways for some of our content experiences to play when you’re actually in the game.
AdNews: How are you looking to make your content more part of the live experience?
Adam Good: We do a lot of research in pre- during- and post- sporting events. For some time, media has built up before the event with interviews with players and coaches, on team selection, insight on how the game is going to be played, but as you move closer to the game in the digital environment, what people want to know is things like how can we get there, transport, additional content we can provide just before the game experience becomes more important. What we get excited about is future things like being able to trigger exclusive content fans might get just before or after leaving the game. We have access to the official press conference and so the TV experience might end, but that's not the case in the digital environment – the conversation keeps going. Social integration is big and you just keep feeding the fans' appetite.
AdNews: Channel Seven’s Olynpic deal is the biggest rights deal made recently, what is the potential for the network to go beyond traditional broadcast and how can it avoid making a loss?
Adam Good: The London Olympics was the first time Foxtel had the second screen experience on tablet. They had lots of multichannel aspects you could use to find the event you wanted. That tablet experience for the Olympics was the foundation of what Foxtel Go is today – the additional benefit of being a Foxtel subscriber is that you can take your Foxtel wherever you want on mobile and the initial trial was the London Olympics. Fast forward to what Seven is able to do, they can push it on free-to-air, start to look at how they can leverage it through Yahoo!7 and develop those app experiences. There’s the time delay that Olympics brings, so on-demand experiences will be very popular. All of those things should be there.
Always the challenge with those short sporting events is you have to invest a lot of time, money and technology and then they only last three or four weeks. So monetisation is the challenge.
AdNews: Cost is an obvious issue for sports rights and Nine reportedly lost up to £20m on the 2012 Olympic Games. How are you handling that cost issue?
Adam Good: That’s the real challenge, sports rights are not getting any cheaper and they’re becoming very sought after – you’re trying to deliver them and the production to get these sports rights monetised – you need to really invest heavily in the production. It’s safe to say that some sports rights can be considered a loss leader, as a pull through to build an audience. During the Olympics, networks use it to leverage other assets throughout the year.To monetise sport assets is a challenge we face, but it’s an international challenge.
AdNews: How does it play out for Telstra’s digital rights?
Adam Good: We have to pay a good chunk of change to participate – the difference is that one of the reasons we did it in the first place was that there was really good synergy between what the sports codes wanted to do in regard to having a 24/7, ongoing relationship with fans and that’s what Telstra wants to do as well. We have customers we value who pay for their connectivity every month so if we can provide more value across their passion points, and be able to look at the benefit of that delivery – for example we don’t charge the cost of the data to stream NRL.
The way we put a lens on it is a little different than broadcasters. If you’re Channel Seven, you’re trying to fill Saturday afternoon with a few footie shows. We work with the codes and the clubs in a JV type structure. In some ways we’re a technology enabler and others we’re a rights holder.
AdNews: Would you say it’s a loss leader for Telstra?
Adam Good: I’d just say we pay good money for the rights and we have to be smart about how we make money through ads and subscription. And if we don’t get those models working for us it could be a very expensive venture.
Adam Good is speaking at the Multi-Screen TV Summit in Sydney 21-22 August.
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