Damien Venuto
Spark and Sky makes two subscriptions — and that’s far from the end of it for viewers
Spark’s coup in winning the NZ Cricket rights has confirmed that New Zealand sports fans will face some tough decisions as the great unbundling of local broadcasting hurtles onward.
Customers will now need two subscriptions to be able to catch all the Black Caps games, with Sky holding the international rights and Spark claiming the local rights.
But cricket is only a small part of the picture. Football has similarly been divided between the two broadcasters, with Spark holding the Premier League rights while Sky continues to hang onto the Champions League, the A-League and a number of major international tournaments.
Things get even more complicated when you cast your eye at the entertainment side of the business, where Sky confirmed this month that it would lose the Disney and Disney Junior channels on account of the entertainment company launching its Disney Plus streaming service into the local market next month.
On top of this, you can add your Netflix, Neon, Lightbox or Amazon entertainment account — because let’s face it, no one wants to spend all day watching Disney.
Are you keeping count? To cover your cricket, football, kids’ shows and entertainment, you may well need as many as four different subscriptions. Not to mention that you probably also have a Spotify or YouTube Music account for your audio stimulation.
If that all seems like too much, things are even worse in mature streaming markets like Britain, where the rights for the Premier League have been split among three providers (Sky, BT and Amazon).
Suffice to say, it looks like the TV Guide might have a good side hustle in the future, telling confused viewers where to find the shows they’re looking for.
There are two ways to look at this. The first is that we have more choice than ever before as consumers, which is always a good thing. But on the other hand, getting a well-rounded content experience across sports and entertainment is starting to look pretty expensive.
This week, former Spark chief executive Simon Moutter broke his self-imposed Twitter silence to remind the Herald that Spark’s competition in the sporting space has led Sky to drop prices significantly.
This is true, but the drop in prices at Sky has coincided with the introduction of new costs elsewhere. No one could say with a straight face that Sky was ever cheap, but there was value in having everything in the same place.
Spark’s hiccups during the Rugby World Cup had some people wondering whether the company might pull back on its ambitions and leave sports broadcasting to Sky, but the company just landed another cracking blow — this time after Sky chief executive Martin Stewart’s fighting words that anyone who outbid him was going to go broke.
Spark’s share price indicates that the market hasn’t been spooked by the company’s latest splurge, and we can likely expect a few more bidding wars to continue to unravel the content bundle now held in Sky’s clutches.
And it isn’t only the local telco that Sky should be worried about. Amazon, which has been quietly tinkering away in Australia for a while, has secured streaming rights for a number of sports, including American football and tennis.
In 2018, Facebook also signed an exclusive deal with the World Surf League to broadcast its events live on the social media channel. The surfing organisation has since returned to television, but continues to use Facebook Live to reach users over and above the TV broadcasts.
The rapid maturation of streaming has also for the first time shifted the balance of power in favour of the smaller sports, which have long clamoured for some airtime on broadcast TV.
A 2013 study conducted by consultant Paul Gunn and then-Freeview chief executive Steve
Browning detailed how tier 1 sports dominated television coverage, making it very difficult for the smaller tier 2 or tier 3 sports to get airtime or revenue.
While the popular and more widely watched codes are given support by broadcasters to cover the expenses of content creation, the smaller sports have long been required to fund this independently.
At the time of the report, only one of those tier 2 and tier 3 sports — unnamed — was paid a licence fee for its rights.
The research showed that while tier 2 and tier 3 sporting codes spent a combined total of $2.7 million on the production of their content, they only made about $335,000 through sponsorships, commercial partnerships, rights and advertising.
What’s interesting is that a decent chunk of this content creation budget, particularly when it came to live sports, was paid to Sky TV for its production services.
So what you essentially have is a case of smaller sports having to pay the broadcaster rather than the other way round.
The report recommended that for tier 2 and tier 3 sports to maximise their return on investment in coverage of their events, they needed to separate production from distribution to capitalise on a wider range of distribution channels that have become available in the digital age.
At the time that was only a recommendation, but it is now coming to fruition as consumers become increasingly comfortable streaming content online. As was seen in the surfing industry, smaller sports stand to gain a lot by taking control of their content and building their audiences online. There is perhaps even scope for these second- and third-tier sports to work together, and hypothetically stream their events on a variety of platforms.
The whole concept of unbundling can even go further, with Deloitte consultant Izzy Wray writing this year that the unbundling of women’s and men’s football could play a major role in increasing commercial revenue in the women’s game. Which is to say that remembering your log-in details will only become harder and harder as time
goes by.