BT Sport

Premier League Football Rights – Addendum

Four months after the winners of the main TV packages for the 2019-2022 Premier League domestic football rights were announced, the final two packages have now finally been sold with Amazon and BT picking up the “remnants.”

First a reminder that previously Sky and BT essentially maintained the status quo in this rights period, while managing their costs. Cumulatively they were paying around £600m over three seasons less than they had previously, with the proviso that the final two packages remained unsold.

Why didn’t those two packages get sold first time around? Essentially, the Premier League’s reserve price was not met. That wasn’t surprising since the packages were poorly conceived, offering multiple matches on a single date meaning that one broadcaster couldn’t maximise the number of potential viewers. Yes, digital technology means that viewers can select what they watch – as we see during early rounds of European club competitions – but they offer a limited number of viewing opportunities.

While the packages haven’t been enormously tweaked since those reserves weren’t met, there is one noticeable change in the new format.

BT has bought Package G which is now 15 fixtures from two midweek fixture programmes, and five matches from the “split weekend.” The “split weekend” is a single weekend’s worth of fixtures spread over two consecutive weekends allowing for a short mid-winter break in upcoming seasons. In effect 10 teams will get a ‘bye’ one weekend, and the other teams the following weekend. That allows for the thick end of two weeks’ break for players of any given club. But it also means that viewers get football every weekend during the “break.”

BT’s five fixtures from that split weekend won’t be simultaneous, so they get a decent bite of the cherry with them. The other 15 fixtures are more complicated. Assuming that midweek fixtures are spread over two nights – Wednesday and Thursday – it means BT would be looking at 3-4 games per night during those midweek rounds. The issue here is that a viewer can really only watch one of those games, assuming the Premier League doesn’t start having kick-offs at 6pm as per the Europa League. Furthermore, some of those games will be ‘unattractive’ to mainstream viewers and therefore unlikely to have been TV picks previously.

BT is paying £90 for these 20 games – or £4.5m a game. That’s significantly down on the £9.2m a game it was paying for its other package. But it bolsters BT’s Premier League offering, enabling it to promote 52 rather than 32 fixtures, so it makes some sense.

Amazon is more complicated. I have not seen any reports on how much Amazon has spent, but it would surely be much less than the £90m BT is spending, since it has bought Package F, with games from one Bank Holiday and one midweek rond.

While the Bank Holiday games could be spread out into as many as four time periods – e.g. kick-offs at 12pm, 3pm 5:30pm and 8pm – a further six games from the round would be played simultaneously with other fixtures. And even the most die-hard fan is unlikely to stay glued to their sofas for four consecutive matches.

With the midweek round, it’s again hard to see how a viewer can see more than two fixtures – one on Tuesday and one on Wednesday. The remainder will need to be played simultaneously.

In both cases, some less glamorous games will be included, so the rights fee should be lower – in the £50-60m range I would guess. That leaves the Premier League with perhaps £450m less over three seasons than previously.

As I said previously, when I mused on Amazon buying rights, I could envisage a sales push from Amazon with something like: “Buy a Fire TV stick this Christmas and get free access to Boxing Day football – only with Amazon.”

But this is a marketing challenge for Amazon. They have games on only three dates within the season. So they’re going to have to spend a lot on advertising to reach viewers for such a short period.

The Premier League was desperate to get a digital player like Amazon on board, because since there’s no obvious competitor to Sky or BT right now, they need deep-pocketed global players like Amazon to come in and shake things up (aka spend even more cash!). But if Amazon bid for the bigger packages, they didn’t go high enough, and global operators like them or Facebook really want global rights. Given the value of Premier League football, it’s probably still a better business model for the league to sell rights on a territory by territory basis. Sum of the parts is worth more than an Amazon whole.

That may not remain the case forever, but aside from the prestige in owning the rights, there has to be a business model where it makes sense for Amazon or another digital giant to buy these rights. And I’ve struggled to find one. That said, Facebook did bid for Indian Premier League rights. They didn’t win, but those rights might make more sense since India is probably still a growth market for Facebook. Is there anyone left in the UK who might use Facebook that isn’t using it? (It’s true that post Cambridge Analytica, a bigger issue for Facebook in the future might be retention of some of those users.)

I’m certain that next time around, we’ll get a different set of TV packages that makes more sense to more broadcasters and digital operators. I’ve argued all the way along that these were badly formulated and indeed were a misreading on the Premier League’s behalf.

I will be interested to see who gets mobile goal flash digital rights since those are yet to be allocated and might indeed be of value to a new player.

The Premier League probably looks jealously at the way the NFL can sell the same rights to multiple platforms. For example, Thursday night games next season will air on Fox TV, the NFL’s own NFL Network (which gets cross promotional branding on Fox), and Amazon who have renewed a previous deal. Now Amazon is reported to have spent perhaps $50m for the 2017 rights, so pocket change in the scheme of things, but it’s amazing that the NFL can sell the same games multiple times.

The NFL also repackages other games that it has “already sold.” While Sunday afternoon rights holders like CBS and Fox cover games in multiple territories, adhering to complicated rules about which fixtures have to be covered in which “local” market, nearly all the games are available to subscribers of DirecTV’s Sunday Ticket package. DirecTV obviously pays healthily for these rights – as do its subscribers.

Beyond that, NFL Network also offers Redzone (viewable in the UK on Sky Sports), which is ad-free coverage of all the afternoon’s fixtures, hopping from game to game as teams get closer to scoring. While the NFL owns NFL Network itself, it’s still effectively redirecting some viewers away from networks like CBS and Fox to its own network, where viewers are not exposed to those networks’ ads!

In some ways it’s remarkable that the NFL is able to do this, but American football is an in-demand product, and networks need it on their schedules. I’m sure that the Premier League would love to do something similar.

Premier League TV Rights – 2019-2022

The new Premier League TV rights auction for the UK has just got under way, with bids due in at the end of January, and the results announced in early February. Such are the scale of these rights now, that the announcement tends to be made to accommodate the stock market. If a PLC is spending several billion pounds on something, this is “of note.”

Where do we stand, and where are we likely to go?

At first glance, there really doesn’t feel like an enormous growth left in the UK market. Last time around, the value of UK live rights rose a colossal 70%, from £3bn to £5.1bn!

This increase in cost didn’t come without consequences. Subscribers to both Sky and BT have seen increases in their subscriptions, while Sky in particular (who’s packages increase the most in value), has cut costs elsewhere, reducing some coverage – notably tennis.

But different players have different needs from Premier League football.

Sky

As the bid from 21st Century Fox for complete ownership of Sky continues to navigate regulatory hurdles, Rupert Murdoch himself is selling out to Disney. While the Disney deal itself will need to overcome any US regulatory concerns, the general feeling is that it will get through unscathed (While it shouldn’t involve the US President, Trump is reportedly more concerned about the future of Fox News than anything else, and Murdoch keeps ownership of that). Meanwhile, the prospect of Sky News being a Disney property rather than a 100% Murdoch owned, is probably more palatable to more people. The separation organisationally from the unsavoury practices at Fox News is probably helpful too. There perhaps remains a question of when the various deals go through, so that waving the Sky deal through before the details of the Disney deal have been finalised might be problematic.

But returning to the Premier League, for Sky the rights are an important – not to say critical – part of its overall offering. Sports also remain an important part of Disney’s offering.

ESPN has for many years been a substantial revenue generator, but of late it has began to suffer. So-called “cable cutters” don’t all want ESPN. It had been regularly bundled into all basic cable offerings, taking a substantial share of a household’s monthly cable bill, regardless of whether that household actually wanted to watch sport. As such, it became a cash cow. That’s still the case, but as younger subscribers choose their digital offerings in a piecemeal way – Netflix here, HBO Now there – ESPN was beginning to miss out. It was losing overall subscribers, and has of late announced a series of redundancies to cut costs.

In part to bolster that, Disney has picked up Fox’s regional sports networks as part of the Fox acquisition, qne they provide very solid ratings revenues.

The problem with all sports for broadcasters is that in large part, they are not actually owned by the networks. Every few years, the rights are put out to tender, and the rights owners tend to expect big increases.

That extends from the Premier League to the NFL, the IOC, the ICC, the NBA and so on. Sport has become disproportionately important because for the most part, the value is in live rights, and an audience that advertisers love being unable to skip the built-in advertising.

Sky needs the Premier League, and it has to pull out all the stops to maintain the crown jewels of the packages offered. But at some level there will be a red line beyond which it doesn’t make sense to bid.

BT

BT is in a slightly different position, as it built its TV offering as much as anything to support its broadband proposition. This has developed further when BT trumped Sky to buy Champions’ League and Europa League rights. Unlike previous minority rights holders of Premier League football, BT was clearly a serious player with serious cash available. By offering sport initially free, and later at a discount to its broadband customers, it was able to stem the flow to other broadband providers.

In TV terms, BT does still feels like a smaller player in the wider marketplace.

There may be a slight shift at BT now, as it develops a stronger TV offering built around IP delivery, but the company is really in the business of running wires and cables into your home.

Sky and BT Making Up

Interestingly, Sky and BT have recently reached an agreement to properly wholesale their packages to each others’ customers. While BT Sport has been available to Sky customers since launch, viewers had to deal separately with BT to view the channel on their Sky box. The new agreement will make it easier for Sky customers to add BT Sport to their existing Sky package, buying it directly through Sky. In return, BT will make available Sky’s Now TV offer via its own BT TV platform. That effectively provides a mechanism for BT to offer the full range of Sky Sports channels through its platform.

Commentators have suggested that the pair have reached this agreement in part to mitigate the chances of the pair outbidding one another in the upcoming auction. While I doubt they’d collude (which may be illegal anyway), it’s likely that the status quo would suit both parties just fine. The pair do potentially face some opposition however…

Sidenote: One curious consequence of the Disney takeover of Fox (and in turn Sky), is that BT currently has a deal with ESPN for much of its US sports programming. In essence this leaves Disney with at least a small foot in both camps.

The Packages

Note: This is based on published information. Precise details of first picks is likely to appear in the tender documents which aren’t ordinarily made publicly available.

Under this contract, we will be up from 168 matches to 200 of the 380 total Premier League fixtures being broadcast live on UK TV.

Previously, there were five packages of 28 games, and two packages of 14 games. BT won the rights to 28 Saturday 1730 fixtures, as well as a further 6 midweek matches and 8 Saturday matches. Sky won all the remaining fixtures.

This time around the seven packages are built somewhat differently, with Saturday evening primetime being added into the mix, as well as some intriguing midweek packages.

2019-2022 Packages
Package A: 32 matches on Saturdays at 12:30
Package B: 32 matches on Saturdays at 17:30
Package C: 24 matches on Sundays at 14:00 and eight matches on Saturdays at 19:45
Package D: 32 matches on Sundays at 16:30
Package E: 24 matches on Mondays at 20:00 or Fridays at 19:30/20:00 and eight matches on Sundays at 14:00
Package F: 20 matches from one Bank Holiday and one midweek fixture programme
Package G: 20 matches from two midweek fixture programmes

Packages A and B are the same as before, but increase from 28 to 32 games. Package C had previously been exclusively 2pm fixtures, but now has eight primetime Saturday night games.

Package D tends to be the most valuable package, in the past containing the majority of first picks (in other words, broadcasters can put the biggest matches in this slot, other considerations such as police advice notwithstanding).

Package E now gets some 14:00 Sunday games as well as Monday and Friday night football.

But, beyond an overall increase in fixtures and the Saturday night slot opening up, it’s packages E and F that see the biggest changes. Previously these were a mix of mid-week and Bank Holiday fixtures throughout the season. But under this auction they will account for four individual programmes. For example, when there’s a full midweek fixture list, all games are usually played on a Tuesday and Wednesday. But by offering rights to all these games in a given week, any one viewer can only really watch two of them, since multiple games take place simultaneously. So while there are 40 games in total across the two packages, there are potentially only 8 opportunities for a viewer to watch a game, with the other 32 happening during one of those 8 timeslots

So while it’s technically innovative, you wouldn’t expect this package to go for a vast amount of money compared with the others. It’s fewer games than other packages for starters. But it also seems squarely aimed at getting streaming services involved.

Both Sky and BT would be able to offer this choice – they both did or do similar things with Champions’ League group stages. But a decent number of the games are not fixtures a broadcaster might ordinarily choose to televise – think of those matches towards the end of an average edition of Match of the Day.

But if this is aimed at getting digital players involved, it would seem to require an awful lot of marketing for just 8 opportunities to watch on as few as 7 individual days.

The Premier League can only really show all its fixtures in midweek slots because there’s a blackout during Saturdays at 3pm to support the wider football world. But I wonder whether by 2022, we’ll see every Premier League game played outside the 3pm Saturday window? That would enable all matches to be shown live, and perhaps a 2pm Sunday slot having the majority of fixtures.

Potential New Entrants

A bit like the broadcasters, different digital groups have different reasons to use video. Are they looking to increase dwell time on their services, are they looking to grow their user numbers, or are they looking for something else altogether?

Sport isn’t out the question with streaming services, bringing with it loyal fans. But it also brings issues with having a robust technical backbone, and excludes those who don’t have solid broadband.

Furthermore, only UK rights are being sold. While the UK remains an important market for most of the big players, being able to offer streaming to multiple territories is preferable to global operators. The Premier League, of course, sees greater value in selling international rights in different territories to different operators rather than bundle them all together.

What is certain is that the Premier League is desperate for one or more of these companies to enter the market. If Sky and BT would be prepared to stick with the status quo and only offer modest increases in their bids compared with last time, it would take a third party entering to push bids upwards. The only possible existing TV group who might be persuaded would be Discovery via its Eurosport channel. But it’s just not clear that the rights make sense for that brand. While Discovery has spent big on the Olympics, it doesn’t have much of a UK footprint at all in football beyond various secondary UEFA and FIFA competitions.

Facebook

Facebook notably did bid for Indian Premier League cricket rights for a large number of territories, but the deal the IPL eventually did with Star India (also being sold to Disney as part of the Fox deal) included global streaming rights, so they lost out.

You wouldn’t count out Facebook from bidding for Premier League football, but the challenge for them is that these are UK rights. While Premier League football potentially offers increased dwell time on the platform, assuming that the games are broadcast free to viewers, there’s relatively little in it for Facebook in terms of gaining new subscribers.

However Facebook is investing in premium video, and they have money to burn, so a bid isn’t out of the question.

Google/YouTube

YouTube has bought sports rights in the past – cricket immediately springs to mind. Google is constantly evolving its offerings, with a rumoured reversioning of its music offering in both audio and video terms, due to be launched soon.

As with Facebook, Google doesn’t face any problems in being able to afford rights, but it’s not clear what it really gains for them. YouTube is already phenomenally successful, and Google’s reach is nearly complete.

Again, that doesn’t mean that they wouldn’t bid, it’s not entirely clear why they would.

Apple

Apple is also making a play to develop a premium video offering, but it hasn’t as yet entered the sports arena. It’s platform is much less developed in the UK, and if made available exclusively via Apple apps or devices, any bid would curtail audiences a bit.

It seems much less likely that Apple would bid compared with other digital players.

Amazon

Amazon may be interested. Their model is slightly different, and they’ve not yet achieved the prestige in the video marketplace that others have. They’re certainly jealous that Netflix has developed stronger video brands than they have. The recent acquisition of The Lord of the Rings rights shows their ambition in this area – spending $250m on the rights alone to make a series, before they spend a single cent on production.

Notably they have now bought a range of tennis rights, outbidding Sky for the men’s ATP tour rights, as well as buying US Open rights. However we should be careful here. The entire ATP rights package cost Amazon less than Sky pays for a single Premier League fixture.

Tennis feels like a toe in the water for Amazon. They also stream Thursday night NFL games – something Twitter did previously, but outside the US you may not have noticed (games happen after 1am local time in the UK, and 2am in central Europe). It should also be remembered that Thursday night NFL is the least valuable package, and Amazon shares the rights with CBS and NBC in broadcast.

Amazon certainly has the technology to offer streaming, both via its Amazon Prime Video platform, as well as Twitch, potentially allowing it to reach a younger audience.

As such, it feels the likeliest bidder of all the digital platforms, even if the strange nature of packages F and G don’t really seem to make sense for anybody.

Twitter

Twitter has played with live streaming, offering everything from an alternative election night programme with Buzzfeed, to eSports and, as mentioned above, some NFL games last season.

Of all the digital players, it feels like Twitter perhaps has the most to gain in terms of getting new sign-ups from something like this. However it’s not trivial to get Twitter video onto your TV set.

As a company, Twitter is a scale lower than other digital businesses (see also Snapchat, who I’ve not even considered here), and so cost may be an issue.

Netflix

This feels to be the least likely digital bidder. Their business has not been built on sport, and as mentioned above, the real problem with sport is its lack of repeat-ability. If you’re paying £10m+ for a property, then they want to sweat that asset over a number of years. The value of a live match is a one-time thing, and really doesn’t seem to fit their model.

Outcome

We’ll find out the answers to all these questions in a couple of months’ time. Would the Premier League leave Sky and/or BT without games or a severely reduced offering? If the money was right, then yes. How would pubs show games “broadcast” on Twitter? Someone’s phone hooked up to a TV set?

Just because these businesses have the cash, it doesn’t mean that it makes sense for them to bid for rights. There has to be a reason. It might be adding value to a wider package such as Amazon Prime; it might be growing the number of users, or increasing a site’s dwell time. But many of these services are doing quite nicely already.

I can’t see BT and Sky increasing their bids at anything near the level they’ve previously managed. The value just isn’t there. Sky has managed to diversify its offering with originals and exclusive deals with providers like HBO. Renewing that HBO deal feels almost as important as doing another Premier League deal.

In the end, it’s probably best not to second guess these things too much. All will become clearer in February when consumers will discover just how many subscriptions they need to get the full range of Premier League football on television.

Sky Sports Revamp

Sky Sports is reportedly getting a bit of a makeover, losing the numbered channels currently known as Sky Sports 1-5, and instead gaining sports-specific channels.

Currently the channels are roughly being used as follows:

Sky Sports 1 – Football
Sky Sports 2 – Cricket, Rugby, Football
Sky Sports 3 – Football, Tennis
Sky Sports 4 – Golf
Sky Sports 5 – Football
Sky Sports News
Sky Sports F1 – F1
Sky Sports Mix – (Available on cheaper non-sports Sky tiers) Simulcast of one of the above, Dutch/Spanish Football or smaller sports like Netball, Drone Flying etc.

It sounds like this list is going to be rationalised into:

Sky Sports Football 1/Premier League
Sky Sports Football 2/Football League/Spanish etc.
Sky Sports Cricket
Sky Sports Golf
Sky Sports Arena (Including Rugby and Tennis)
Sky Sports F1
Sky Sports News
Sky Sports Mix (Assuming this continues)

In some respects, this simplifies things a little. It seems that what Sky wants to be able to do is offer a cheaper entry to its sports packages. Recall that BT Sport retail its sports offerings from as little as £5 a month for a streaming package, and £7.50 for those with Sky (and a BT Broadband internet connection).

Currently the cheapest way of getting Sky Sports on TV is £49.50 a month (based on taking the cheapest Sky Original Bundle before adding the full Sky Sports pack to it, with Sky only offering packages with their new Sky Q box). According to The Guardian, this will allow Sky to charge £18 for its cheapest partial sports offering.

But I do foresee a few problems with this plan.

First of all, it seems likely that the cheapest offering will not be football, rights costs for which have shot up. I would anticipate that either cricket or golf will be the cheapest offerings.

Then there’s the issue of sustaining full channels of some of these sports around the clock year long. Sky Sports F1 is something of a joke outside the season, and is largely filled with filler outside of race weekends. Quite why it didn’t become a broader motor-sport channel has never been obvious to me.

You also have the issue of major sports that don’t fit in. What about Rugby League or NFL, both of which have significant followings and carriage deals with Sky.

But more to the point, as someone who takes the full Sky Sports package, I would love to pay less and drop sports I’m not interested in. Namely Sky Sports Golf and the misery that is Sky Sports F1 (Seriously, why would I pay to hear Martin Brundle?).

At time of writing, it’s not clear when these new packages will go live, and I’ve not seen the price breakdowns across the different packages.

There’s also the not insignificant matter of third parties who currently get Sky Sports 1 and 2 on a wholesale basis. Although formal “must-offer” conditions have previously been removed, Ofcom has said that it would take a keen interest in any move that removed Premier League football from other platforms.

It would seem like that Sky would continue to retail football. But nearly all Sky’s major sport appears on those Sky Sports 1 and 2 currently – so even if golf usually finds its home on Sky Sports 4, it gets a bump up during, say, The Masters or the Ryder Cup. Lions rugby is on Sky Sports 1 right now, and next week England’s Test series against South Africa will start on Sky Sports 2.

While the Premier League channel might be one, what would the second be? At the moment, if I subscribe to, say, Sky Sports on BT TV, I can watch Premier League football, Test cricket and Lions rugby. What happens in the future? The easy answer would be for Sky to allow its channels to be retailed more fully on other platforms. (I did also wonder if the recent news about Sky and Virgin sharing Sky’s targeted advertising technology might mean that Sky Atlantic was made available to Virgin Media homes?). But we shall have to wait and see.

With the Fox takeover of Sky still in the balance following yesterday’s news that it’s being referred to the competition authorities, it will be interesting to see how Sky plays this.

Broadcasting Cricket

3 May 2009

There are two stories worth talking about in the world of broadcast cricket – a subject I’m only marginally less interested in than in broadcasting football. (See this recent piece for example.)

First of all, Jonathan Agnew interviewed the ECB’s Chief Executive Tom Harrison last Thursday during lunch in the final Ashes Test. There is always plenty to discuss in the cricketing world, but Agnew certainly got onto television coverage of the game. There was some talk about “terrestrial” coverage – I think we can say “free-to-air” is more appropriate – and Harrison said that it was part of their thinking. However there were two key things that he mentioned. The first was there wouldn’t be any change in coverage of the game until 2020 – with the current Sky deal running until the end of the 2019 season. That would seem to discount the idea that separate rights would be sold to an amended T20 competition (I suspect Sky thinks they already have those rights!).

The other thing he said was that in retrospect, the 2004 deal that saw Channel 4 lose all its cricket rights was still a good thing for the game.

Hmm. Remind me again when the open top bus tour of the 2015 Ashes winners is happening again? You simply couldn’t hold such a celebration today, because as much as any cricket fan might wish it, this Ashes series has passed most of the population by.

Which brings me the second major story that broke over the weekend. BT Sport has pitched in and won the rights to Australian cricket from 2016-2021 from Cricket Australia. Notably, this includes the 2017/18 Ashes series in Australia. But it also includes all the other Australian home international series as well as their T20 Big Bash series.

A few thoughts come from this:

  • This is the first time in a long time that Sky’s cricket monopoly has been breached. Sure, the Caribbean T20 series has been on a few different channels (Eurosport and currently BT Sport), and the IPL was on ITV4 for a number of years before Sky bought it up. But essentially every series involving a Test nation has been Sky exclusive for a long time now.
  • In turn that means that a die-hard cricket fan will need a BT Sport subscription as well as Sky. That’s a costly add-on if you’re not on BT Broadband.
  • Cricket fans are wealthier (look at all those banking and luxury car ads) so BT is perhaps on safer ground with this.
  • But cricket in Australia takes place at a terrible time of day from a UK perspective. So live TV isn’t always the most valuable.
  • However it seems that BT is taking the highlights rights too. They’re planning on putting them on BT Showcase (where they’ll also air a free-to-air weekly Big Bash fixture during that competition. That would seem to mean no Channel 5 highlights. (Although Sky shows Test highlights alongside Channel 5, so the two may not be mutually exclusive).
  • And of course all this brings BT into play for the next big ECB cricket contract. I suspect that this will turn a few heads at the ECB, and while they may say pleasant things about wanting to reach a wider audience, they’ll be faced with Sky and BT Sport waving big chequebooks at them when those rights negotiations begin.
  • Finally, does this suggest that Sky’s massively increased Premier League costs are really beginning to bite? Which sports are next on BT’s shopping list? Golf? Men’s tennis? Rugby League? NFL? F1? Er, WWE?

In the meantime, BT had better start raising the profile of BT Showcase. That means getting carriage on other platforms – notably Sky* – and making it a bit more visible. I’m not convinced that a channel that only very rarely pops into life for a random Champions’ League game or Aviva Premiership rugby fixture will gain much in the way of traction. At least Sky’s Pick TV has a full schedule.

(They’ve today announced – two days before the game – that the second leg of the FC Brugges v Man Utd Champions’ League qualifier will be free-to-air on BT Showcase. That’s before the channel has carriage on either Virgin Media (where it’s at least promised) and Sky. Assuming Man Utd qualify, will that be the one fixture for the season featuring them? And is two days enough notice? I assume there’ll be some press advertising to back this up in the coming couple of days.)

And it’ll be interesting to see any audience figures from BT Sport once the Champions’ League gets underway properly.

*I note that “AMC from BT” has arrived on Sky, so there’s no real reason for them not putting Showcase up there too.

BT’s Advertising

As the new football season rapidly approaches (even though it’s still only July), so the marketing spend of the various pay-TV operators ramps up. Sky is showing some fairly well-received adverts highlighting their Premier League heritage and super-imposing Thierry Henry into the video.

On the other hand, BT is busy trying to let the British public know that it’s home of the Champions’ League and Europa League from this season. To that end they’ve created one of the worst ad campaigns in recent years.

Their recent TV ads have all been of the faux behind-the-scenes variety. So we have Ewan McGregor (who I like) hamming it up about why BT is making such a tawdry ad when “they’ve got the big films” (Only in the sense that Apple/Google/Everybody has the big films for PPV), Jose Mourinho putting up with glitter cannons and so on.

But the nadir is the BT “house party” advert featuring lots of footballers and BT Sport presenters seemingly having a blast in some mansion. Only at the very end is it “revealed” that this is another fake ad with the same characters directing it.

It’s awful.

For one thing, it’s trying to have its cake and eat it. The makers think that this is actually a good ad. It has expensive production values. It has a cast of current European footballing stars (Gareth Bale, Alex Oxlade-Chamberlain, David Luiz etc.). The two second “reveal” says to me that really they just wanted to make this ad anyway.

But what this ad actually says is that overpaid footballers live hedonistic lifestyles that none of us will ever have, and they’re doing it through inflated TV deals, pricing out younger fans from games. In short, it highlights everything that’s wrong with the game.

And was it a smart idea to include Franck Ribéry in the ad given some of his own past?

The makers may claim that their tongue is in their cheek for this ad, but I really don’t think it is.

The other problem is that it really doesn’t do the job of conveying BT’s European football rights at all. The ad just doesn’t do the job.

BT has quite a complicated message to convey about how to get its new football offering. As I’ve said before, the previous message was pretty simple: Get BT Sport free if you’re a BT Broadband customer.

Simple and punchy. It probably worked too, stopping Sky from gaining broadband customers.

Now BT’s more complicated message is: Get BT Sport for £5 a month if you’re BT Broadband customer watching via BT TV or Sky, or pay closer to £20 a month if you’re on Sky and don’t have BT Broadband, or get it free if you have BT TV too (although you need fibre for the full offering including 4K), or get it as part of the XL bundle on Virgin Media, and don’t forget that you’re “opting in” to the £5 deal even if you thought it was free, but you can downgrade to free if you get BT Sport Lite which just gets you BT Sport 1.

Clear?

In the meantime, this atrocious ad played out in just about every commercial break during Saturday and Sunday’s Tour de France coverage on both ITV4 and Eurosport. I couldn’t avoid it.

I would fire AMV BBDO, the creative agency that came up with this mess.

The Champions’ League – Part Two

This is a follow up to yesterday’s piece anticipating BT’s changes in packages having won exclusive Champions’ League and Europa League rights, although I’m mostly talking about Champions’ League coverage here.

Well BT has announced its new football deal and there were some things we expected, and some things we didn’t.

Yes, Gary Lineker is going to be one of their presenters – I imagine him and Jake Humphreys taking Tuesday and Wednesday nights.

Yes, it’ll cost £5 for many people (much more on this below).

Yes, there’ll be a new Freeview channel, BT Sport Showcase which will be where the free-to-air fixtures are shown. But this will be SD only for most people (everyone?), so will look absolutely rubbish on your 46″ TV (And approximately 10% of the country won’t get this channel at all on Freeview. It’s unclear if it’ll pop up on satellite).

The channel has some new pundits in Steven Gerrard (hope he’s up for some media training, because his post match interviews are awful), Rio Ferdinand and Glenn Hoddle amongst others. And there’ll be a 4K service for “select” fixtures. But that’ll need a new box and, in my opinion, a TV somewhere around 55″ or bigger to make any difference.

There’ll also be a “Goals!” show with James Richardson on Champions’ League nights that will chase around all the simultaneous kick offs and show the goals as they go in. Those with long memories may recall that the capacity constrained OnDigital did the same thing. And of course Sky had a red button service that hopped around goals.

The cost of HD is going up 33% for sports pack customers from £3 to £4 (they didn’t highlight this, oddly).

But the devil is in the detail and it’s not all clear at the moment.

BT seems to be making another play for BT TV, their television offering. The trouble is that it’s sub-standard compared to Sky and Virgin Media. The channel choice is limited and significant channels are missing from their options.

From the starting point that they’re appealing to sports fans, then there’s already a limited offering in that only Sky Sports 1 and 2 are available. And in SD only. That should get you most Premier League games, but you’ll be missing out on other sports – golf, European football and F1 immediately spring to mind. And the lack of HD becomes ever more important as screens get bigger. SD is just awful on anything from 40″ upwards. There’s no Eurosport either – which is important to me for cycling coverage. [Update: There is Eurosport, and in HD. See comments for details.]

So a sports fan watching via Sky or Virgin is perhaps unlikely to ditch their current platform.

Now there’s no mention of Virgin Media anywhere at the moment, so we’ll assume that the deals haven’t been done, and that this will happen in due course.

For the large number of Sky subscribers, there are two deals on the table, and we don’t know what one of them will cost.

– Those taking BT Broadband are looking at £5 a month for the full BT Sports Pack as the new package including the regular BT Sports channels, plus the new European one seems to be called. Then it’s £4 a month for HD. But what extra channels are they getting in HD? For Champions’ League and Europa League, there will be at least two British teams playing simultaneously in the league part of the competition. Will Sky and Virgin viewers be able to see both those games in HD? Or will there be a single HD channel and a red button SD service? It seems that the latter is likely since only one additional channel is being launched.

– Those who don’t have BT Broadband – e.g. Sky customers who have, perhaps, a Sky Broadband deal – will have to pay at least £13.50 a month for an SD package, and quite probably more. BT hasn’t released pricing. This has to be a substantial part of Sky’s football subscribers, and therefore a market that BT wants to reach. Charging perhaps £15-20 is a really steep ask, and I’m not at all convinced that many will bite. From what we can tell, the vast proportion of current BT Sport providers are BT Broadband customers getting it free. Relatively few football fans are paying £13.50 for a meagre offering of additional Premier League matches (one more year of the current Premier League deal to go), and lots will have decided that not spending the money is worthwhile for a handful fewer games. Champions’ League football does make a difference, but I wonder how much? This is the toughest sector to move.

For me as a Sky subscriber but with BT Broadband and wanting to watch Champions’ League football, I’m looking at paying £6 more a month (+£5 BT Sport; +£1 increased HD cost) for less HD football. Furthermore, depending on the draw, as an Arsenal fan, I face the prospect of seeing little HD football on the Sky platform because programmers tend to choose, say, Man Utd or Chelsea over Arsenal when highlighting a single fixture. And will I be able to record those red button channels?

Viewers of BT TV seem to get all the channels in HD. So is this an attempt to lure current Sky viewers – particularly those on BT Broadband – into getting a second box and watch via that? The “free” price point for those taking the minimum TV offering suggests that’s the way to go. Even with high-speed fibre, I’ll need convincing that sport is capable of glitch-free playback via IP. Can I do both? Get BT Sports on both Sky and BT TV for one fee?

It also looks like people currently getting BT Sport 1, 2 and ESPN free will actually only get BT Sport 1 free in future. BT Sport 2 and ESPN become part of the paid-for BT Sport pack. Because those people currently have the “BT Sports Pack” which is £0 currently, I wouldn’t be at all surprised if they’re not rolled up to the £5 package. “BT Sports Lite” is a new package altogether which customers may well have to opt to choosing pro-actively.

The issue regarding months when little European football is played (e.g. January) isn’t really addressed – except you without a subscription you can’t see BT Sport 2 or ESPN during those months. This doesn’t make me want to rush to pay for August though since the Champions’ League proper doesn’t start until mid-September.

Overall, it’s a thoroughly confusing offering.

BT’s marketing material is really going to have to work hard at explaining how costs are broken down, with different prices dependent on platform and broadband supplier, and different HD and 4K offerings dependent on platform.

Their website is currently woefully short on information.

The one thing I’m pretty confident about is that the free-to-air ratings will be terrible. Unless they offer a little more in the way of “Showcased” programming, few will discover the channel on the occasions that they show games free of charge.

The Champions’ League – Part One

On Tuesday we will hear what BT has in store for its coverage of the Champions’ League and Europa League. It outbid Sky and ITV to win exclusive rights for the next three seasons.

The expectation is that they’ll announce Gary Lineker as co-presenting with Jake Humphries over Tuesday and Wednesday nights, with a £5 per month price-point for the package.

What that means for fans (and sponsors) is that there’ll be relatively little free European football on-air. At the time the bid was won, BT said that at least one fixture involving each British club in the competition will be available free-to-air on a specially set-up Freeview channel – BT Sport Showcase. This will include the final.

But whether they’ll offer the attractive games viewers want to see seems less clear. Man Utd v Zenit St Petersburg isn’t exactly a crowd pleaser, but would fulfill BT’s promise.

In the meantime Sky Sports has posted a blog that seems to say something along the lines of “We might have lost the Champions’ League, but nobody’s watching it any more and they only care about the Premier League, so we don’t really care.” Sour grapes anyone? The Guardian has more coverage here.

Is there too much Champions’ League football? Probably.

Are audiences down? Well the numbers say so.

Is this because English clubs haven’t done so well in the last couple of years? Er, I would think so.

Sky Sport’s audience at the weekend for the final might have been lower this year than last year, but it’s not clear to me that’s anything more than to do with the clubs competing. Personally I want to see Messi and co. I’m not convinced that Saturday night is the right time for the final, and wonder whether returning to Wednesday nights would see a stronger overall audience.

But I do think that UEFA is going to be the loser by selling exclusively to BT. Remember the OnDigital years? ITV had the Champions’ League exclusively then, and it wasn’t enough to save the platform. So yes, people do care more about the Premier League than the Champions’ League.

The football watching audience is divided into the following segments:

a. Free-to-air only. Match of the Day; England internationals on ITV; World Cups; Euros.

b. BT subscribers. Take BT Sport because they already have BT Broadband, so why wouldn’t they?

c. Sky Sports subscribers. Like the substantial Premier League offering.

d. Sky Sports + BT Sports. Pay for Sky Sports first of all, and then either get BT Sports free because of their broadband package, or pay because of the additional games it offers (other sports like rugby come into play here).

(e. BT Sports subscriber. Pay for BT Sport but aren’t BT Broadband subscribers. Probably only rugby or Moto GP fans, and not really football fans.)

We now need a couple of new segments:

f. Sky Sports + BT Sports + BT Sports Europe. Football die hards paying some more money for a complete football offering. This is probably the key constituent for the success of BT Sports Europe.

g. BT Sports + BT Sports Europe. Can anyone who doesn’t otherwise pay for football be persuaded to fork out £5 (or whatever) a month? This will be a small segment.

However the Champions’ League is vital for the top flight Premier League clubs. That’s why the big “four” are always fighting to be in it. Indeed, if they’re not then they’re not going to be able to attract the right players. Top players want to play in the Champions’ League.

It’ll be interesting to see how BT pitch their offering. They need to have the satellite capacity for Sky and Virgin subscribers to be able to watch as they can do now with BT Sports. And they need to persuade a lot of people to part with actual money to watch it.

I know that for me, this means my sports TV costs are going up. Sky has already announced price increases (the massive bids they made to retain Premier League rights ensured this), and now I’m facing £5 or more a month if I want to watch Arsenal in Europe (I do).

And then there’s the question of a monthly subscription fee when matches aren’t evenly spread out across the year. For example in the 2014/15 season, there was a single match in June – the final. July and August saw qualifiers – of interest to fans of the 4th place Premier League club, but few others. The group stage kicked off in September but rounds of the competition are not evenly distributed. There are no games at all in January. So how will subscribers deal with that? Do we all cancel mid-December and re-subscribe in mid-February? The Europa league has more games, and slightly more rounds to add into this mix.

In the meantime, we can look forward to a Media Guardian article this time next year explaining to us that the cumulative audience for the Champions’ League Final has fallen by x% (where x is a big number).

But let’s see what BT says tomorrow.

[Update: Here’s my follow-up piece.]

BT and Champions’ League Football

I must admit that like many others, I was surprised to learn over the weekend that BT had bought all the Champions’ League live TV rights exlcusively. At a stroke they’ve knocked both ITV and Sky out of the picture starting from the 2015 season.

I’m going to try to unpick the subject a bit because there are implications on several levels.

Damage to Sky

Today there are reports that Sky has had £1.4bn knocked off its stock price as the news hits the markets. That feels to me a very short term reaction. While this is a massive show of intent on BT’s part, I don’t think it’s devastating to Sky to have lost these rights, although I suspect that whatever the next big rights package that comes up for attention will be looked at very carefully by Sky.

Let us not forget that in the earlier days of the Champions’ League, ITV Digital (née OnDigital) had most of these rights too. And they were not enough to build a brand (yes, there were other things going on there, not least piracy). Given the nature of football, we’re only really talking about fans of Manchester, London and occasionally Glasgow clubs that are being troubled by these games. Sure, the average fan might want to watch Man Utd v Barcelona, but if you live in South Wales, you might find a Sky subscription more essential in the short-term. And you can still go to the pub if that game is appealing.

That said, losing both club rugby and Champions’ League football to BT is more than bad luck for Sky. You wonder if BT might next target cricket…

Damage to ITV

This does leave a big hole in ITV’s schedules. I’m not sure what they’re going to do with Adrian Chiles et al, since they’re now really only left with England matches, major tournaments, and potentially a highlights package. Arguably, highlights could become more important in a BT-only world. Lots of people are going to be left without any access to Champions’ League football. Packaged in a more Match of the Day manner it could be a more compelling offering than the current late-night highlights which are definite afterthought to the live coverage. Also, ITV currently only has Tuesday night highlights. Highlights only make sense covering both Tuesdays and Wednesdays. But the value of those late-night ads is going to be far less than during live games.

This also leaves a big hole in ITV4 which seems to have been nurtured as a quasi-sports channel with Europa League, French Open, Tour de France, British motorsport and so on. In value terms though, the Europa League is limiting.

Free To Air

As something of a sop to sponsors (not the football loving public), BT has said that it’ll make some games available free-to-air. This would seem to include the final, but will also include at least one match featuring each British club in the competition. However given that each team that makes the league part of the competition is guaranteed at least 6 fixtures, this isn’t really a great deal.

It’s also worth examining how those games might be made available. Currently, BT Sport is carried on all the digital platforms. However on Freeview, it’s channels are carried on the COM4 and COM6 multiplexes. Neither of these have as much carriage as those multiplexes that carry BBC and ITV channels – something like 19.6m households compared with 26.8m households which cover the entire country. So unless those free-to-air games are rebroadcast on a Public Service channel like ITV, or BT Sport changes mulitplexes, there will be millions of households who miss out on these free games.

In the UK we have a designated set of Listed Events. In 2008, David Davies led a team that was to review what was included and excluded on that list, but after despite the team doing work on the subject, the review was scrapped in 2010.

At the time, there was a promise that it would be looked at again post digital switchover in 2013:

The current economic climate also points to us not making a decision at this time which could adversely impact on sport at the grassroots. I have therefore decided to defer any review until 2013, when we will look at this again.

Well of course, digital switchover was completed at the end of last year. And there is no sign of a review of the list, which may or may not be a good thing to be honest given the political muscle of major sporting bodies. David Davies’ group did not recommend that the Champions’ League was added to the list). We are, however, left with the 1998 list of events.

Anyway, the Champions’ League Final (or European Cup) is not on the list – either in terms of live or highlights.

The International Olympic Committee (IOC) still has its Olympic Charter, section 48 of which still says:

The IOC takes all necessary steps in order to ensure the fullest coverage by the different media and the widest possible audience in the world for the Olympic Games.

Unlike the IOC, UEFA has no “charter” to further its competitions’ reaches. So it can happily sell its tournaments to its highest bidders.

The only people who have any real sway in these matters are sponsors of course. Sponsors like Heineken may be paying as much as $70m a season for Champions’ League sponsorship may question whether they’re losing out under this deal. With six headline sponsors (plus another couple), there is some serious money at play. But the UK is only a percentage of that. UEFA meanwhile is making an additional £500m ($800m) on these rights. So if sponsorships aren’t quite the same value in future, they can live with it.

Gain For BT

This does make them closer to being a real player in the TV sport market. I still think that for most, it’ll be Sky Sports first and then BT Sport. Certainly still for football. But with the end of the Heineken Cup next year, and in all likelihood a replacement tournament on BT Sport, a rugby union fan might well decide that the England autumn internationals on Sky aren’t enough to warrant a subscription.

Both Sky and BT will already be thinking about the next round of Premier League rights. These Champions’ League rights don’t come into play until year three of the current Premier League offering. So there’ll be even more incentive to bid up those rights with BT wanting a bigger slice of the pie. The Premier League must already be rubbing their hands with glee.

BT also needs to work out how it’s going to broadcast all 350 games for which it has rights. Up until now, they’ve not really pushed their own TV platform to viewers who have Sky packages, but I’m not certain that BT will replicate the offering Sky has for Match Choice on Champions’ League rights – at least on satellite. I can see them broadcasting two or three games on their channels and offering the others via broadband – pushing their own boxes. Considering that sometimes much better games are going on elsewhere in Europe, this could be challenging for some football fans.

Viewers

What is clear is that this state of affairs isn’t good for the consumer. If you want to watch the biggest teams in Britain, you need to take out two premium TV subscriptions to get full coverage. Yes, BT Sport is free to BT Broadband customers, but with fees already going up in January, it’d be a fool who believed this cost wasn’t being subsidised by every BT customer – whether or not they actually take the BT Sport package.

Disclaimer: I pay for Sky Sports, and have BT Broadband entitling me to BT Sport. Indeed I switched broadband suppliers to get BT Broadband to take their sports offering. I guess it’s working for BT.