How sport is shaking up the media

From Sun+ Premier League clips and BT’s ‘free sports’ deal to ITV’s England qualifiers coverage and even Channel 4’s Paralympics win – sport is shaking up vast swathes of the media. Yet the only certainty in all this flurry of activity is that there will be only one winner says Raymond Snoddy…

There has been a recent plethora of deals and developments, mostly involving sports rights, which tell you a great deal about the intense competition in the British media market and the different approaches of major players.

Mike Darcey, chief executive of News International, has made good on his promise to charge for the Sun online with a relatively modest fee of £2 a week for seven-day access to the paper’s content.

But he could only even contemplate imposing such a paywall for Sun+ because he bought the exclusive rights to show clips of all 380 Premiership games each season.

You can have all the special offers and promotions you like, but if Sun+ is going to be a success, then it will be the footy that does it.

Darcey – with all his pay experience at BskyB – made it clear earlier this year that he believed it was ‘untenable’ to continue giving Sun content away for free online.

Darcey is almost certainly right as more and more newspaper groups around the world adopt some form of online charging mechanism – though usually hybrid offerings rather than absolute paywalls.

But he must now brace himself for the melting way of the 27 million readers who currently use the free Sun online site every month. Most people just won’t pay, however modest the sum.
Let’s hope Darcey has the courage of his convictions and belief in the power of smaller numbers prepared to pay, to publish regular subscriber totals in a way that hasn’t happened at the Times to date.

The Sun+ start date and charges came hard on the heels of BT, apparently going in precisely the opposite direction and giving away its much more valuable sports rights for ‘free’.

This is surely a bold move given that BT has paid £738 million for 38 matches a season for three years – most of them at Saturday lunchtime. If you add it all up the telecoms operator will not get much change out of £1 billion over three years on its attempts to establish itself as a major player in the broadcast market through launching sports channels.

Some have called the BT initiative a ‘game-changer’ and emphasised the head-to-head battle with Sky over sports rights just as the over-excitable believed – wrongly – that Liberty Global’s acquisition of Virgin Media heralded a nuclear conflict with Sky.

The BT move is, however, an imaginative response to a long-standing problem – the relative failure to make more than modest inroads into the TV subscriber base of Sky and Virgin. More recently, BT has started to turn things around and has been attracting, from a low base, a higher number of new customers than its rivals.

Yet this has to be one of the most dramatic and costly marketing campaigns of recent years and one that could lead to an annual operating loss of £250 million to £300 million, according to Enders Analysis.

At its heart, for all the bravura, the ‘free’ sports offer is both a loss leader and a defensive move designed to shore up BT’s valuable but vulnerable broadband business.

Sky and other broadband rivals have been nibbling away at BT’s broadband subscribers, although BT remains the market leader with 6.7 million subscribers. At the very least, BT will hope the offer will help to prevent the two million or so Sky customers thought to have BT broadband from absconding.

This, at least, is a form of competition for sports rights that does not immediately disadvantage football fans. When regulators demand more competition and fragmentation of packages of rights, the more consumers have to chase the ball by taking out multiple subscriptions and are therefore likely to end up paying more.

Now, a discerning football fan can opt for Sky’s 118 game package and then get the rest of the Premiership games for ‘free’ by going to BT for broadband. Such a strategy might pull apart the ‘triple play’ beloved of communications operators but they will just have to cope.

BT might also gain a little more traction through its policy of necessity by deciding to put a cost-effective emphasis on women’s sport – something that is shamefully neglected by existing broadcasters.

Even Channel 4 has got in on the sporting act by announcing a ‘planned deficit’ for 2012 of £29 million – partly at least because of the punt on the Paralympics. There is no doubt that what seemed a risky move – outbidding the BBC for the rights to the Paralympics – has paid off in spades for Channel 4 in terms of reputational enhancement.

It is another example where doing the right and less than obvious thing in the media can pay substantial dividends. Few would have predicted that the BAFTA for sport and live events would go to the Channel’s Paralympic coverage rather than the mighty BBC’s contribution to the main London 2012 Olympics.

It is a week in which there was comprehensive sports coverage from the UK media. ITV – which says it hopes to outperform the British television advertising market over this year – underlined its commitment to live sports.

ITV has landed exclusive rights to all of England’s home and away competitive internationals for the next four years, something that covers the Euro 2016 and 2018 World Cup qualifying competitions. On this occasion, free-to-air won, but Sky got second prize with all the live qualifying matches of Wales, Scotland, Northern Ireland and the Republic of Ireland.

There has been speculation that the BBC may re-enter the market for the remaining morsels on offer: England friendlies and the FA Cup. Or then again, it may not.

The only certainty in all this flurry of activity is that there will be only one winner – the leagues and sports organisations extracting more and more money from broadcasters, those who would be broadcasters and even purveyors of sports clips.