Thursday, 4th October 2007

SPORTS SHORTS

* ESPN Star Sports is to launch the US version of ESPN’s well-known SportsCenter sports news programme in south-east Asia, Hong Kong and China. SportsCenter, which claims to have been broadcast over 30,000 times, more than any other show in US television history, covers top US sports such NBA basketball, MLB baseball, NHL ice hockey, NFL American football, Nascar motor racing and NCAA college sports, with news highlights and analysis. ESPN Star Sports already carries Asian, Indian, Malaysian, Cantonese and Mandarin versions of the programme. Source: Sportcal, Worldscreen, 3rd Oct 2007

* Major League Baseball (MLB) has reached an agreement with global broadcast intelligence company, Teletrax, to run a digital watermarking test of its content in order to evaluate the broadcast television usage of all of its post-season games. MLB will test the service, across its satellite, cable and terrestrial stations in all 210 television markets in the United States, until the end of March 2008. Source: Sport Business, 3rd Oct 2007

* The proportion of foreign players in the top five European soccer leagues rose to 38.9% in the 2006-07 season, a 0.5% increase on the previous season, according to the latest Annual Review of European Football Players’ Labour Market. The report, by the International Centre for Sport Studies in Switzerland and French University of Franche-Comte also shows the proportion of players that have been trained by their employer club has fallen from 26.8% to 24.3%. On average, players change teams 3.4 times every 10 years. Brazil supplies the greatest number of foreign players (140). The report surveyed the 98 clubs of the top leagues in England, France, Spain, Germany and Italy. Source: Sportcal, 3rd Oct 2007

* The Argentina rugby union team’s achievement in reaching the quarter finals of the Rugby World Cup presently under way in France has been recognised even by the soccer association of a country more usually recognised for the round-ball game. The association has agreed to switch by two hours the kick-off time of the high-profile Buenos Aires derby soccer match between River Plate and Boca Juniors to avoid a clash with Argentina’s rugby quarter-final against Scotland on October 7. The governing body said that it ‘took this measure in order to allow fans to follow the campaign of our remarkable national rugby team which is dazzling at the World Cup in France.’ Source: Sportcal, 3rd Oct 2007

* Skype’s co-founders have – almost - left the building! Niklas Zennstrom and Janus Friis, the co-founders of VoIP service Skype have resigned, and there are signs that all is not well at eBay which paid a mind-numbing pile of cash for Skype. The inventive pair are also the brains behind web-based download service Joost. A report from Ovum suggests that growth at Skype is slowing in terms of overall revenue growth, and total customer growth measured by registered users is also slowing, with Skype’s actual daily usage also weakening. Ovum has said bluntly that eBay “overpaid” for Skype. Source: Rapid TV News, 3rd Oct 2007


MORE NEWS

Global/Rights: Sportfive Signs up CAF Competitions for Eight More Years

Sportfive, the international sports marketing agency, said today that it had signed a wide-ranging deal with the Confederation of African Football for the marketing of media and sponsorship rights for all of its competitions for a further eight years, beginning in 2009 and ending in 2016. The new deal is an extension of the existing deal which began in 2001 and ends next year and is thought to be worth about $50 million.

The deal covers four editions of the African Cup of Nations, the biennial national teams competition, in 2010, 2012, 2014 and 2016, and eight editions of the annual CAF Champions League competition for the continent’s top club teams. It also covers the second-tier annual Confederation Cup competition for clubs, a merger of the former CAF Cup and African Cup Winners Cup competitions, and the African Junior Championship for national teams, scheduled to take place in 2009, 2011, 2013 and 2015.

The present deal was agreed with the French sports rights agency Groupe Jean-Claude Darmon shortly before it merged with rival agencies Ufa Sports and Sport Plus in 2001 to form Sportfive. ISL, the now-defunct International sports agency, held the marketing rights for the African Cup of Nations until its collapse in 2001, when the rights reverted to CAF. Sportfive took over the rights in 2004.

Ghana will host next year’s African Cup of Nations, with Angola scheduled to stage the event in 2010, Gabon and Equatorial Guinea in 2012 and Libya in 2014. Sportfive claimed that last year’s edition of the competition in Egypt attracted a cumulative worldwide television audience of 4.2 billion, making it the third-largest international soccer competition. Sportfive is owned by French media group Lagardère, which agreed a €863-million ($1.21-billion) takeover of the agency in November last year, taking over from Advent International, the private equity group. Source: Sportcal, 3rd Oct 2007

Elsewhere/General: Selig Hails 'Golden Age' for MLB as Attendance Records are Smashed

Almost 80 million spectators attended games in the Major League Baseball this year, with eight teams setting franchise records, in one of the most competitive regular seasons ever. The league said yesterday that a total of 79,502,524 fans were present at games this season, a 4.5 per cent increase on last year’s record of 76,042,787. The previous mark was overtaken with a week still to go. An average of 32,785 spectators attended games, beating the record of 31,423 set in 1994.

It is the fourth successive season that a total attendance record has been set. The post-season playoffs begin today. Commenting on the new mark, MLB commissioner Bud Selig said: ‘The immensity of this record is staggering and it serves as a perfect illustration of the passion and excitement for the game that exists across the Major League Baseball landscape. ‘Our sport has reached heights that were unimaginable only a few years ago. By any measure, this is truly a golden age for Major League Baseball. I thank fans everywhere, and I share their enthusiasm for another memorable October.’

Out of the 30 MLB teams, 23 reported increases in 2007 and 10 attracted more than three million spectators. The teams that broke season records were the Boston Red Sox, Chicago Cubs, Detroit Tigers, Los Angeles Dodgers, Milwaukee Brewers, New York Mets, New York Yankees and St. Louis Cardinals. The Yankees, the most popular MLB team, set a new American League record by pulling in 4,271,083 fans, an average of 52,729 per game. Across the league, nearly 27 million tickets were sold online at MLB.com, another record.

Interest in the league has been sustained by parity with no team winning or losing more than 60 per cent of their games. The Red Sox and the Cleveland Indians led the standings with 96-66 records. Source: Sportcal, 3rd Oct 2007

Elsewhere/General: Sportdigital.tv Targets Premiere as Part of Distribution Plan

Sportdigital.tv, the German sports internet portal and television channel with close links to the Sportfive sports agency, has held talks with Premiere, the German pay-television broadcaster, about appearing on its satellite platform. Sportdigital.tv was recently launched as a stand-alone service on satellite television thanks to a tie-up with satellite operator SES Astra, and is now targeting expansion onto Premiere Star.

Gisbert Wundram, Sportdigital.tv’s managing director, told Digital Fernsehen, the German media website, that he had been in ‘intensive negotiations’ with Premiere for some weeks, but that Premiere has now asked to continue the talks in 2008. Wundram said that Sportdigital.tv was also in discussions with Deutsche Telekom, Hansenet and Arcor, the German telecommunications groups, regarding the broadcasting of the service via IPTV.

Maxdome, the sports and entertainment internet portal, is another potential partner that Sportdigital.tv is seeking to work with to broaden its distribution. Sportdigital.tv received a pay-television licence in January when it was launched, but was initially available only as an internet portal. At present, subscribers can watch live action from the top leagues of German basketball, handball and volleyball.

Regarding the possible broadcasting of other sports, Wundram said that Sportdigital.tv ‘could at first always fall back on Sportfive’s stock of rights.’ He added that Sportfive ‘was responsible for all the activities in terms of rights acquisitions and for the marketing of the programming’ and that Sportdigital.tv was merely in charge of the technical delivery and editorial. Wundram also played down recent reports that Sportfive would definitely use Sportdigital.tv to rival Premiere in bidding for rights to German soccer’s top-tier Bundesliga from 2009-10 onwards. He stressed Sportfive’s stance that it would first study the tender documents from the DFL, the German soccer league, before deciding on a potential bid.

When asked if Sportdigital.tv saw itself as a direct rival to Premiere, which is largely unchallenged in the German pay-television market following the loss of Bundesliga rights by Arena, its erstwhile competitor, Wundram said that his company performed a different role from that of Premiere. He said: ‘We are completely different to Premiere in that we do not rely upon the exclusive use of the type of sports we have, rather look for co-operations with other broadcasters with the aim of letting an individual sport attain its maximum reach. We see ourselves much more as a complement to the existing television broadcasters in the media sector.’

Sportdigital.tv is targeting a ‘five-figure' subscribtion figure in the short- to medium-term, said Wundram, although subscriptions are not the only revenue source. To generate further income, the channel is also seeking to sub-license rights either nationally or internationally, integrate sponsors and presenting partners into the coverage, develop television advertising revenue and expand the service onto different media platforms. Source: Sportcal, 3rd Oct 2007


ARTICLES, COMMENTS & OPINIONS

IPTV ops just can't shake off content questions
Editor, Tony Brown comments on Telecoms.com, 19th Sep 2007

In July, Asia Pacific telecoms giant SingTel became only the fourth major operator in the region to launch commercial IPTV services, following in the footsteps of flagship IPTV operator PCCW in Hong Kong, Hanaro Telecom in South Korea and Chunghwa Telecom in Taiwan. The fact that only three other significant telcos in the region have launched IPTV services since PCCW launched Now Broadband TV in October 2003 indicates the continuing frailties of the IPTV business model, with the biggest problem still centering on content.

In 2003, you could barely open a telecoms publication or go to an industry conference without reading or hearing that IPTV was set to fundamentally change the landscape of the telecoms world and put traditional cable-TV and DTH operators on their collective backsides. But here we are, heading toward late 2007, and apart from PCCW's success in Hong Kong - where it has surpassed former pay-TV-market leader Hong Kong Cable TV in terms of user numbers - the region's pay TV operators are not exactly cowering at the telcos' IPTV offerings.

Even PCCW's success has to be viewed in context: Although the firm had distributed about 850,000 Now Broadband TV settops to subscribers by end-August, only about 575,000 subscribers are paying for the service, with the rest taking the free basic platform. And although ARPU has increased substantially, from its consistent lows of HK$100-120 ($12.80-15.40) in 2H04-1H06 to the HK$166 recorded in 1H07, the increase was won only through the expensive HK$1.6 billion acquisition of English Premier League soccer rights from HKCTV.

PCCW's EPL bid was more than double what HKCTV paid for the previous three-year EPL deal, and the prized soccer content has become the key component of the firm's Mega Sports Pack, which costs HK$218 a month. In contrast, HKCTV is expecting to lose a significant number of the 830,000 subs it had at end-June and has conceded that its ARPU will drop well below the HK$200 mark as it is forced to offer cheaper packages in an effort to prevent churn.

Still, getting involved in price wars for premium content, such as the EPL rights, is the last thing telcos with IPTV aspirations can afford to be doing in an effort to substantially raise ARPU, since content wars have a nasty habit of making for unprofitable TV operations. Moreover, not every telco in the region with IPTV ambitions has the deep pockets of PCCW or is faced with a less-than-stellar competitor. HKCTV had long failed to cement itself as a market leader.

Hanaro Telecom, the second-largest IPTV operator in the region, is already experiencing the problem PCCW had before securing the EPL rights: Subs seem to love the service but are not eager to pay big money for it. In 2Q07, only 60 per cent of Hanaro's half a million IPTV subs were actually paying for the service, which meant that the service's overall ARPU remained in the doldrums, at KRW5,516 ($5.90) a month. Hanaro has ambitions of raising ARPU to KRW20,000 per sub per month by 4Q08 and says it will be able to do so once the government passes legislation that allows it to offer real-time broadcast channels over IPTV, rather than solely via VOD.

But it is a massive leap of faith for Hanaro to suggest that it can quadruple its IPTV ARPU, when you consider that South Korea's cable TV operators are themselves generating ARPU of only about KRW5,000 for their 80- to 100-channel analog platforms. Sure, Hanaro has a substantial VOD platform with which to raise revenues, and its VOD take-up is increasing, albeit at a modest rate, but the firm will not find any content not already being screened by cable operators to miraculously drive ARPU to its target levels.

Meanwhile, Chunghwa Telecom is in an almost identical situation. It faces a strong cable market that has long-established ties to the content-production sector, meaning that Chunghwa has found exclusive content hard to come by. The lack of exclusive content, added to the fact that CHT has been bedeviled by a series of regulatory problems, has curtailed subscriber growth and meant that the service has yet to provide any meaningful competition to the established pay TV operators.
And so we come to SingTel's recent launch. Although it faces a relatively benign regulatory landscape, it is hard to see how it is going to escape the problems that beset PCCW for so long and those that continue to dog Chunghwa and Hanaro. SingTel's content lineup looks painfully skinny compared with that on offer at rival cabler StarHub, which has cemented its market leadership in a way that HKCTV failed to do in Hong Kong.

SingTel's IPTV subs will receive settops free of charge but will have no "free" basic package, such as PCCW and Hanaro offer. And they will have to pay at least S$16 ($10.50) a month, with a la carte channels costing S$3.20-12.84 a month. Given that rival StarHub - which had already captured a market share that's fast approaching 50 per cent, with 496,000 subs at end-June - already offers a budget package for just S$24 a month, it is hard to see why people would pay extra for SingTel's IPTV service.

If telcos seriously want to get into the pay TV game, they are going to have to dig deep into their pockets and compete for the best content, whether it be sports, movies or drama. There really is no choice. We have already seen that IPTV subs clearly like getting something for nothing, or at least for very little, but there's no great surprise there. The real challenge is getting viewers to pay serious amounts for content, and they will do that only if they stand to receive premium content they cannot get anywhere else.

So it looks as if the content-rights holders and production giants could be set for a nice windfall if the region's telcos want to get serious in the IPTV game. Some things really do never change.