SPORTS:
NEW MEDIA/TECHNOLOGY
July,
2006
This
report contains articles published in July, 2006, drawn from SBRnet's publications
database including:
Revenues From
Sports Venues
SGB's Inside Sporting Goods
Sport And Technology (e-Newsletter)
SportBusiness International
Sporting Goods Business
Sporting Goods Dealer
SportsPipe
Subjects covered
primarily include the application and use of Internet and wireless technology.
Articles are arranged in date sequence, starting at the top with the most current
articles.
SportsPipe
July 27, 2006
PAC-10 And FSN Extend Television & New Media Rights For Football & Other Sports
The Pac-10 Conference and FSN have reached a multi-year agreement that extends the sports
network’s exclusive rights to 18 Pac-10 football games per season, plus 35 Olympic
sports events. The announcement was made today by Pac-10 Conference Commissioner Tom
Hansen and Bob Thompson, President, Fox Sports Networks. In May, FSN also reached a
multi-year renewal to remain the conference’s exclusive national basketball
television partner. Financial terms were not released.
The extension provides FSN national cable and new media rights for football and 35 other
events. As for new media, FSN has rights to distribute games live and delayed during an
exclusive 30-day window, including exclusive game replays via video-on-demand, wireless,
and/or Internet platforms. In addition to exclusive rights to selected games, FSN has
certain exclusive telecast windows for its live Pac-10 football coverage.
In addition to the rights provided to FSN and its related new media platforms, the deal
gives Fox College Sports (FCS) the right to carry all games and events FSN televises, as
well as access to the Pac-10’s extensive library of archived football and Olympic
sports events.
“We’re extremely pleased that Pac-10 Conference football will remain a fixture
on FSN well into the next decade,” said Thompson. “The conference is important
to us and continues to play a vital role in both our national and regional programming,
creating a solid core of quality product for FSN, FCS, and all of our affiliated regional
sports networks, especially FSN Arizona, FSN Bay Area, FSN Northwest, FSN Prime Ticket and
FSN West in Los Angeles.
Added Hansen: "Because FSN has been such a cooperative and supportive partner of our
football and basketball television programs, we are especially pleased that we have
extended our football rights over a term to match the extension in basketball. FSN
understands and values the Pac-10 and its excellent programs in a broad range of sports,
and it will provide the conference important exposure in many of them. Extending both the
football and basketball relationships with FSN is important and significant because of
cross-promotional opportunities which will benefit both properties, FSN, and the
conference."
In addition to football and the Olympic sports events, FSN through its recently renewed
Pac-10 basketball agreement has exclusive rights to 56 regular-season men’s
basketball games (40 on cable; 16 broadcast) to be distributed via one or more national
over-the-air networks and on FSN, with national or regional coverage. The package also
includes exclusive national cable rights to four regular-season women’s games
annually and the weekly magazine show Runnin’ with the Pac. FSN also has exclusive
rights to the men’s and women’s conference tournaments.
FSN’s Pac-10 basketball rights agreement includes control and direction of Pac-10
Properties. The FSN-owned unit has the exclusive right to sell all Pac-10 sponsorship
packages with respect to the men's and women’s basketball tournaments, 11 Pac-10
championship events, and year-round overall conference sponsorships. Pac-10 Properties
also seeks corporate sponsorships for sports-related events such as the Pride of the Pac
Luncheon and the conference’s Hall of Honor Banquet. |
Inside Sporting Goods
July 26, 2006
GSI Revenues Grow 30%, But Loss Widens
GSI Commerce (GSIC) reported 2Q net revenues of $119.6 million and a net loss of $3.6
million, or 8¢ per share, compared to net revenues of $91.9 million and a net loss of
$2.9 million, or 7¢ per share, for 2Q05. (Conference call details below.)
Included in net loss and net loss per share for 2Q06 is a non-cash charge of approximately
$400,000, or 1¢ per share, to reduce the carrying value of the shares owned by the
company in Odimo Inc. from $1.3 million to approximately $900,000, which represents the
market value of the shares as of July 1, 2006. These shares represent a portion of the
consideration received when the company sold certain assets of Ashford.com to Odimo in
FY02. GSIC did not include this non-cash charge when it issued guidance for 2Q06 and FY06
Merchandise sales were $208.0 million in 2Q06, a 52% increase compared to $136.8 million
in the same period in FY05. Adjusted EBITDA was $2.8 million compared to adjusted EBITDA
of $2.3 million in 2Q05, an increase of 19%.
Gross profit was $46.6 million, an increase of 35% compared to $34.4 million in the same
period in 2005. Gross margin was 38.9% in 2Q06, an increase of 140 basis points.
GSIC's cash, cash equivalents and marketable securities at the end of 2Q was $128.6
million compared to $156.7 million at the end of FY05, and compared to $117.5 million at
the end of 2Q05.
"We had a successful second quarter marked by strong revenue growth, better than
planned adjusted EBITDA and the signing and launch of our deal with Toys R Us," said
Michael Rubin, COB/CEO. "We are pleased with the momentum in our business and
continue to focus on driving strong growth, improving profitability and investing in our
platform."
The company provided the following guidance for 3Q06: Net revenues are expected to be
$105-$110 million, or increase of 24-30%. Merchandise sales are expected to be in the
range of $205 million-$212 million, or increase between 62%-67%. Product sales are
expected to be in the range of $75-$79 million, or increase between 10%-15%. Service fees
are expected to be $29-$31 million, or increase between 77% and 89%. The net loss is
expected to be in the range of $6.7-$7.7 million.
GSIC provided the following updated guidance for FY06: Net revenues are expected to be
$567-$587 million, or an increase of between 29% and 33%. Merchandise sales are expected
to be $1.1-$1.15 billion, or an increase of between 61% and 69%. Product sales are
expected to be $440-$449 million, or an increase of between 24% and 26%. Service fees are
expected to be the range of $130-$137 million, or an increase of between 53% and 61%. Net
income is expected to be in the range of $5.0 million to $6.5 million, or an increase of
between 85% and 141%. Net income guidance includes $2.0 million of impairment charges
taken in 1H06 related to the company's investment in Odimo.
CONFERENCE CALL DETAILS: Total sporting goods sales a non-GAAP measure that includes the
retail value of all transactions, including freight and net of allowances for returns and
discounts, which flow through the GSIC platform whether GSIC is the seller or records the
full amount of sales, were up 36.4% to $70.1 million. In 2Q, GSIC had the benefit of the
NFL.com business for the first fill quarter (the site will be done over shortly). On a
GAAP basis, sporting goods sales were $54.7 million, up 30.6%. Non-GAAP sales of sporting
goods in 1H06 rose $38.7 million to $137.5 million. GAAP sales were up $28.9 million to
$110.6 million. Sporting goods remains the top category representing 34% of sales vs. 37%
a year ago. On a TTM basis, sporting goods accounted for more than $300 million.
GSIC continues to invest in its business. These expenses are running $20-$30 million, but
GSIC takes the view they will be well worth it in the long term. It is planning to buy a
second call center. The center would have gone online in FY07, but GSIC felt that setting
it up earlier meant it could handle more Holiday business. There is also the need for a
third fulfillment center. The latter addition means GSIC can handle as much as $2 billion
in sales.
The new Toys 'R' Us deal stands to make the chain GSIC's largest customer. In addition to
the ecommerce contract, Toys 'R' Us has signed another contract to take advantage of
GSIC's Marketing Services Group. It will provide online media buying, email creation and
delivery, website design, photography services. Last year, the unit represented about $1
million in service fees. It will be $10 million this year and over $50 million in the
long-term. Rubin noted that GSIC's partners spend upwards of $3 billion in advertising.
The online portion is expected to grow and GSIC wants to be table to get a share of it.
Another area for growth is international. Ecommerce is relatively small outside the U.S.,
but is expected to grow. GSIC has been absorbing five to 10 partners a year, but its
investment in infrastructure could mean more than that number. GSIC is spending $60
million to boost its technology platform. |
SportsPipe
July 25, 2006
YES Interactive Launches On DirecTV
First-Ever Interactive Content for Major League Baseball Telecasts
"YES Interactive only on DIRECTV," the first-ever interactive television content
for Major League Baseball, is now available as part of New York Yankees telecasts on the
YES Network (www.yesnetwork.com) and broadcast by DIRECTV within the Yankees home
television territory. Created to bring Yankees fans closer than ever to their favorite
team and players, "YES Interactive only on DIRECTV" is a co-production of the
YES Network, DIRECTV, Inc., and MLB Advanced Media (MLBAM).
With "YES Interactive only on DIRECTV," YES is the first network -- regional or
national, sports or otherwise -- to offer its viewers true, single-screen interactive
Major League Baseball content. MLBAM, operator of MLB.com, the official Web site of Major
League Baseball, is the source for the application's constantly updated statistics,
scores, records and other data feeds. The new service is available at no additional charge
to DIRECTV customers who live within the Yankees home television territory and have an
interactive DIRECTV receiver.
In addition to offering fans a full array of constantly updated interactive statistics,
box scores, standings and player biographical information for every Yankees game on YES,
"YES Interactive only on DIRECTV" will also boast a unique Bonus Cam feature
during YES telecasts of Yankees home games. The split-screen Bonus Cam will enable fans to
follow their favorite players like never before via an extra camera angle focusing on
select players and situations throughout the game.
Informational CD-ROM and screen grabs available to media upon request.
Highlights of "YES Interactive only on DIRECTV"
-- An in-game box score, with an inning-by-inning game score and game statistics for both
the Yankees and their opponent
-- Bonus Cam, available during YES telecasts of all Yankees home game s, featuring
split-screen isolated in-game coverage of an individual player or situation on the field,
as well as pre-game activity such as batting practice, warm-ups and infield practice
-- A scoreboard providing up-to-the-minute scores from around the league each day,
including the inning, runners on base and number of outs for each game
-- Major League Baseball statistical leaders updated daily; sortable among batters by
batting average, home runs, RBI, stolen bases, on-base percentage and sortable among
pitchers by won-loss record, ERA, saves and strikeouts
-- Major League Baseball standings updated daily, containing wild card races and denoting
teams which have clinched their division or have secured a wild-card berth
-- "Due Up" graphics which provide viewers with a preview of the next three
batters for the team coming up to bat, along with their hitting statistics for that
particular game; viewers will also be able to scroll through the entire batting order for
each team
-- Player profiles containing bio information for both the Yankees and the opposing team
-- YES Scoop, intriguing background information on Yankees players
-- The complete month-by-month 2006 Yankees schedule, featuring results of previously
played games and YES game broadcast information for upcoming games
"`YES Interactive only on DIRECTV' puts Yankees fans in the director's chair,"
said Ray Hopkins, COO of the YES Network. "The various features of `YES Interactive
only on DIRECTV' will provide Yankees fans with unprecedented access to the Bronx Bombers.
This offering, in partnership with DIRECTV and MLBAM, is yet another example of YES taking
advantage of the latest interactive technology in order to enhance the Yankees fan
experience."
"Beyond the action on the field, the story of baseball is told through its
statistics, box scores, team standings and the personalities of its players, and Yankees
fans now have all of that information at their fingertips through YES/DIRECTV interactive
content," said Eric Shanks, executive vice president, DIRECTV Entertainment. "We
believe this is the future of sports TV programming -- a deeply engaging viewing
experience where fans have the ultimate in convenience, control and quality -- and we
can't think of a better or more appropriate way to begin the interactive TV revolution
than with the YES Network and the most storied franchise in baseball."
The YES Network (Channel 622) is available as part of DIRECTV's TOTAL CHOICE(R) monthly
programming service to residential customers in the Yankees home television territory,
including New York and Connecticut, and areas of New Jersey and Pennsylvania. For DIRECTV
customers living in these areas who want to access the enhanced features, DIRECTV is
offering a free interactive receiver or DIRECTV Plus DVR receiver (with a programming
commitment) through Aug. 31. |
SportsPipe
July 24, 2006
New Media / Technology
SPRINT OFFERS NFL MOBILE
NFL fans and fantasy football players can now take the NFL with them wherever they go.
Available only to Sprint customers, NFL Mobile is the perfect companion for the NFL fan
offering the widest array of football information including real-time statistics, scores,
injury reports and other updates. And it's all available to Sprint PCS Vision(R) and
Sprint Power Vision(SM) subscribers free of charge.
This groundbreaking innovation in mobile sports entertainment is customizable to a fantasy
football player's roster or for specific teams. With information updated every two
seconds, NFL Mobile features the fastest wireless delivery of NFL information, allowing
users to claim bragging rights when it comes to real-time NFL player stats and scores. In
addition, only Sprint can deliver a comprehensive package of exclusive mobile video and
audio highlights available at the touch of a button. |
SportsPipe
July 20, 2006
New Media / Technology
FOOTBALL TRAINING CAMPS TO BROADCAST ON NATIONAL TV USING GLOWPOINT
Sports Network to Use Glowpoint for Third Consecutive Year for Exclusive Coverage
Broadcast-quality, IP-based video managed service provider Glowpoint announced that it has
been selected for the third consecutive year to provide video managed services for
exclusive content of the professional football training camps, kicking off in August.
Glowpoint's services are being deployed at 31 team training locations and will provide the
SportsNetwork with immediate access to coaches and players for interviews to broadcast on
national television.
This unique broadcast application leverages Glowpoint's suite of managed services,
including their Video event management and support, QoS network connectivity, as well as
Endpoint Management & Real Time Monitoring support with a 24/7 network operations
center.
"Our ability to provide these high profile services demonstrates that our solutions
go way beyond providing quality bandwidth," said Mike Brandofino, Glowpoint's
president and CEO. "Glowpoint's entire focus is on video managed services and we have
a wide range of capabilities and experience that keep our customers coming back year after
year."
Glowpoint provides IP-based broadcast solutions for major networks live events, and
expects to see continued strong growth in the sector. The overall solution is designed to
deliver immediate impact to broadcasters around the world by enabling on-demand
broadcasting, with always-on exclusive video network connectivity, and to reduce transport
costs by up to 80 percent as compared to traditional satellite feeds.
"This selection, along with other opportunities we're involved with, clearly
re-enforces the confidence we are achieving throughout the broadcast industry, and clearly
demonstrates the reliability and quality of video that is realized using the Glowpoint
network and service," added Brandofino.
2006 FIFA WORLD CUP NETWORK REMAINED SECURE DESPITE RELENTLESS HACKER ATTACKS
More than 125,000 potential attacks made it past the event firewall, but Avaya expertise
secures network and provides 99.999% network availability critical for world's largest
sports event
Despite more than five million unique firewall events that occurred each day -- including
128,000 that made it past the network firewalls -- not a single security- related or
application outage occurred from May 15 to July 9, on the world's largest converged
communication network built by Avaya for the 2006 FIFA World Cup Germany(TM).
The converged network Avaya built for FIFA handled more than 21 trillion bytes of voice
and data traffic -- including players' and journalists' accreditations, photo
transmissions and match details sent around the world in real time and ultimately
transmitted to millions of stadium spectators and fans worldwide. Avaya, a leading global
provider of business applications, systems and services, is an official partner of the
2006 FIFA World Cup.
Security consultants from the Avaya Network Management team at the 2006 FIFA World Cup
event removed 70-80 viruses/Trojans/malware during the event. These included a number of
widespread malware that are currently circulating in the world, such as W32/Mydoom.M@mm,
Net-worm.Win32.Mytob. All of the worms, viruses or Trojan incidents were brought into the
network on laptops that were already infected. All of these malware were all detected and
removed before the laptops were allowed to connect to the system.
Key to ensuring the security of the converged communication network for the FIFA World Cup
was a world class Network IDS System (NIDS) called Sentarus that was provided to Avaya by
Demarc Security. The NIDS detected in real- time, attempted attacks by hackers, malware,
worms and viruses on the FIFA IT solution infrastructure. The NIDS analyzed and correlated
data in real-time, and used both open-source and Avaya Labs tools to analyze network
attacks, and to quickly rectify any potential problems.
Network security monitoring began on May 15. Over the next two months, approximately
128,000 security events were recorded by the sensors located in sixteen venues throughout
Germany. Approximately 12% of these events were rated as "critical", and were
subjected to further analysis. The overwhelming majority of these events were false
positives -- as determined by security analysts' whose task it was to analyze whether
recorded events were real or not.
In addition, the Avaya team used a number of other tools to enhance and extend security
monitoring and response capabilities. These included: HIDS (Host-based Intrusion Detection
Systems) console (ISS RealSecure - SiteProtector), Antivirus management console (McAfee
Antivirus & ePolicy Orchestrator), Proxy management console (Microsoft ISA server),
Firewall syslog data parsing tools, and IP-based Video surveillance in all technical
areas.
One of the main security goals was to help ensure that viruses or worms did not slow down
critical applications traffic and ongoing log analyses showed that no Denial of Service or
attacks took place. "From a security standpoint, we never lost bandwidth or network
resources due to resource exhaustion," explained Dr. Tom Porter, head of IT security
for the FIFA World Cup network for Avaya. "Providing highly reliable, secure,
communications solutions is what we do every day for customers around the world. This
event was no different and it paid off for FIFA, the teams, players, journalists and
spectators alike. The communications network from Avaya operated flawlessly because we
planned, prepared, and put a team of highly skilled Avaya networking and security experts
in place," added Porter. |
SportsPipe
July 19, 2006
Fox Sports Reaches Sub-License Agreement For Bowl Championship Series With ESPN Radio
FOX Sports has reached an exclusive four-year sub-license agreement with ESPN Radio for
the terrestrial broadcast rights to all Bowl Championship Series (BCS) games televised on
FOX. Financial terms were not disclosed.
“We are very pleased to have reached this agreement with ESPN Radio, which has a long
tradition of carrying the BCS,” said FOX Sports COO Larry Jones. “We took these
rights to the market and ESPN Radio made what was by far the strongest presentation of any
group that we spoke to.”
“The BCS on ESPN Radio is one of the network's marquee offerings and we are delighted
to extend our relationship,” said T.J. Lambert, vice-president of sports for ESPN/ABC
Radio Networks. “From our coverage of the World Series to the NBA Finals, fans and
advertisers across the nation have come to expect sports’ championship games on ESPN
Radio and the BCS is a perfect fit.”
The agreement with ESPN does not include satellite radio rights, nor does it provide
exclusivity in the home markets of participating schools. Participating school rights
holders may broadcast the game in which their team is playing locally.
In November 2004, FOX Sports and the Bowl Championship Series (BCS) announced an exclusive
four-year agreement covering all media distribution and sponsorship rights for the Fiesta
Bowl, Orange Bowl and Allstate Sugar Bowl from 2007 through 2010, and a new, stand-alone,
BCS National Championship Game from 2007 through 2009. In addition to telecast rights, the
contract also covers national terrestrial and satellite radio rights; Internet rights; all
sponsorship rights, including naming rights, signage opportunities and in-game
enhancements; ancillary programming on FOX and/or FSN; and a joint venture (FOX, BCS and
Bowls) to identify and exploit merchandising opportunities.
FOX Sports kicks-off its BCS coverage next January with the Tostitos Fiesta Bowl (Jan. 1,
2007), Allstate Sugar Bowl (Jan. 2, 2007), Orange Bowl (Jan. 3, 2007), and the Tostitos
BCS National Championship Game (Jan. 8, 2007) from Glendale, Arizona. Veteran FOX Sports
play-by-play voice Thom Brennaman calls one of the three bowl games, as well as the new
stand-alone BCS National Championship Game. Brennaman’s analyst partner(s), and the
remainder of FOX Sports’ BCS broadcast team, will be announced at a later date. |
Inside Sporting Goods
July 18, 2006
Nike+Ipod Tech Reviews
Initial reviews are in from the tech geeks for the Nike+iPod and they are mostly positive.
Some complaints were heard about battery life and compatibility issues, but there was
general praise on its ease of use, overall usefulness, and high interactivity. The
following are a few summaries along with links to full reviews:
CNET News.com gave the Nike+iPod Sport Kit 7.7 out of 10 in its review. James Kim reviewed
the kit, stating:
"The good: Good workout companion for Nano-using runners; voice feedback; measures
useful data such as distance traveled and calories burned; special Nike + shoes are not a
requirement; excellent hardware and data integration with Nike + Web site; PowerSong.
The bad: Pedometer battery is not replaceable so you'll eventually need to buy a new Sport
Kit; available only for iPod Nano.
The bottom line: Maybe it's not the reason to buy a Nano, but the useful Nike + iPod Sport
Kit and the data-centered Nike+ Web site will appeal to runners who already own a
Nano."
iprong: “In all, Nike+iPod is a fairly straightforward system, only intended to do a
handful of specific things. But based on the first two miles I've used it, it appears to
be a well thought-out, comprehensive system that takes a simple informal run with a nano
and turns it into a formal, standardized, and interactive workout routine. For those (like
me) whose workout habits have traditionally suffered from a lack of structure or
formality, such a change is not insignificant. I'll have plenty more to say on the
Nike+iPod platform after I spend the weekend with it and try out all the various options
and settings (particularly the after-the-fact stuff on the computer), but so far so good.”
Tewkes Adventure Society: “All in all this seems to be a pretty cool product for
anyone who runs fairly frequently. I think the most exciting aspect of this will be the
web-based community aspect, turning something that was by nature offline, running, into an
online competitive portal similar in many regards to the multiplayer computer games that
have grown along with the growth of the Internet. Hopefully the Nike website’s
community features will be functioning soon. The next step in this for me is finding out
whether or not the sensor really actually needs to be in the shoe at all. Perhaps this
Nike element is a marketing ploy? Check back for more info.”
iLounge: Pros: A tiny pair of wireless add-ons that turn an iPod nano and a pair of shoes
into a miniature personal running or power walking tracker, adding easy-to-use time,
distance, and calorie-based workout options to the nano’s existing menus. Impressive
male or female voice feedback automatically or manually updates you on your progress
towards goals without requiring you to look at the screen, or interrupting your music;
on-iPod and on-computer data viewing options able you to track your performance over time.
Spectacular Nikeplus.com web design makes comparative data viewing fun; integration with
iTunes makes it easy. Reliable, generally accurate accelerometer hardware, backed by a
wide variety of good shoe designs.
Cons: Accessory is physically compatible only with specific pairs of one company’s
sneakers, unless user manually modifies or augments other models. Entire system needs to
be replaced when sensor’s battery dies, partially forgivable only because of low
price. Doesn’t - as of date of review - work with iPods other than the nano. Other
than shoes, company’s supporting Nike+ apparel needs a little iPod integration work.
The following are links to the some full reviews:
http://reviews.cnet.com/Nike_iPod_Sport_Kit/4505-6519_7-31894266.html
http://www.ilounge.com/index.php/ipod/review/apple-computer-nike-ipod-sport-kit/
http://www.iprong.com/article.php?id=1698
http://tewks.net/?p=12
http://www.shinyshiny.tv/2006/07/shiny_review_ni_1.html
http://desktops.engadget.com/2006/07/17/nike-ipod-sport-kit-review-roundup/ |
Outdoor Business
July, 2006
EMS Launches Outdoor Podcast
By Thomas J. Ryan
Eastern Mountain Sports (EMS) is taking a step into the digital podcasting world. The
retailer has teamed up with podcast production company Pwop Productions to serve up Blue
Pizza (bluepizza.ems.com), a podcast focusing on outdoor sports.
The debut program—currently available for downloading—features an interview with
professional rock climber Ivan Greene. Lawrence Ryan, an outdoor enthusiast and member of
the Screen Actors Guild, hosts the show.
Pwop has experience producing podcasts for companies such as Microsoft, Nintendo, and
Filemaker, as well as a handful of its own weekly shows. EMS is Pwop’s second
full-service client, and may be publishing Blue Pizza on a regular basis. EMS is committed
to producing three podcasts as part of a test, and is preparing a process to support two
shows per month.
“We knew the audience we were trying to target and Pwop knew the technology,”
says Chris Stephenson, an IT solutions analyst at EMS. “Together, we consolidated a
flood of ideas down to a show about outdoor athletes who push their sports to new levels.
We lined up our first athlete and Pwop ran with it. They take care of the recordings,
editing, intro music, etc. They also designed a slick Web site to host the show, drive our
monthly giveaways, and archive past shows. We’re the content experts and they’re
the technology solution.”
Carl Franklin, podcaster and CEO of Pwop Productions, believes that the RSS features in
the nascent Internet Explorer 7.0 will help bring podcasting to mainstream Internet users,
increasing accessibility in the same way that Apple did last year by adding podcasting
support to iTunes.
“EMS is a great example of a mainstream business waking up to the power of
podcasting,” says Franklin. “For about the same price as a mailing, they can
produce an attractive show that will keep their customers and potential customers engaged
with their brand." |
Sport And Technology
July, 2006
Sport And Technology News
Video referee not used in FIFA World Cup Final
According to PA Sport, FIFA has insisted that video replays were not used to send off
France’s Zinedine Zidane in the World Cup Final on 9 July. The captain of 1998 World
Cup host and winner France was give a red card after he head-butted Italy’s Marco
Materazzi's chest. The off-the-ball incident was allegedly missed by Argentinian referee
Horacio Elizondo and his linesmen, but was spotted by the fourth official Luis Medina
Cantalejo from Spain. France coach Raymond Domenech has suggested that the fourth official
only took action after seeing a video replay - something that is not permitted under the
rules of the game. But FIFA spokesman Andreas Herren told PA Sport: "The fourth
referee saw the incident with his own eyes and told the referee and the assistant referee
directly though their headsets." FIFA said that although the fifth official does have
a TV monitor, he is not permitted to intervene, and the fourth official has no access to
video replays. The controversy looks set to continue.
500m mobile TV subs by 2011
In 2011, mobile TV services will have 514m subscribers worldwide, up from only 6.4m at the
end of 2005, a new ABI Research study claims. The market for mobile television is
beginning to build significant momentum. ABI believes that the majority of subscription
services will be for broadcast content, and that unicast-only subscriptions will not be a
significant part of the market. Meanwhile, Nokia has announced a new contract with
TeliaSonera Sweden for a complete DVB-H trial system, including Nokia Mobile Broadcast
System 3.0 and Nokia N92 mobile TV devices. The system is currently being installed at the
Nokia facility in Kista, Stockholm, supported by Nokia's consulting and integration
services. The system will be in extensive use in Gothenburg and Stockholm from early
August until year-end.
Red Bee expands Piero’s reach
Hot on the heels of Sky Italia, TV Globo in Brazil and Hong Kong Cable bought Red Bee
media's (formerly BBC Broadcast) Piero system in time for the 2006 FIFA World Cup. The
Piero technology places pictures of real players into a virtual stadium, where it is
possible to view and analyse play from different angles in animated sequences. It is the
only technology of its kind with a seamless transition between original footage and a
virtual stadium. Offside, forward passing and other offences can be seen from the best
angle for analysis - even if the play has not been captured at this angle. To form an
inclusive graphics package, Piero also features the ability to track players across the
grass and place pointers, badges and scores on the pitch in 'live' video. It can also be
used to place virtual advertising in real footage or virtual stadiums.
World Cup joy for AFP
France has had some success in the FIFA World Cup, despite losing to Italy in the Final on
penalties. French news agency Agence France-Presse (AFP) achieved considerable exposure
through being the exclusive provider of live ‘MatchCast’ pictures to FIFA's
official World Cup website. AFP also provided most news available on Fifaworldcup.com in
nine different languages, including Chinese, Italian, Japanese, and Korean, which
undoubtedly contributed to the record-breaking audience figures. For the first two weeks
of the competition, 2.5bn page views were achieved with a record 249m hits on Thursday, 22
June. Over 100,000 pictures were sold through ‘ImageForum’, AFP's online image
database, which represented a record for the agency.
Mobile hoops deal
Groupe Sporever has signed an exclusive agreement with FIBA to distribute the FIBA World
Basketball Championship’s mobile rights internationally. The event will take place in
Japan between 19 August and 3 September. According to the agreement, Groupe Sporever will
also be responsible for the audiovisual production of the event for mobile operators in
selected countries throughout the world. For the first time, basketball fans will be able
to download clips of key action from the floor just a few minutes after the live action.
Each video clip will be customised to meet mobile phone requirements (extensive use of
slow motion, close-up shots, and original voice overs).
New deals for Servecast
Digital sportscaster Servecast has secured a three year deal with Ice Media Productions,
the UK company devoted to British Ice Hockey broadcasting, to manage the live and archive
broadband video service for the British Elite Ice Hockey league. Servecast has also
announced a partnership with MBS Productions to webcast Cage Rage 17 - 'The Ultimate
Challenge' on 1 July 2006 live over the Internet. Furthermore, Servecast has also recently
signed a five year contract with English Premier League’s Everton Football Club as
the club's exclusive partner for streaming media and broadband services.
Italian soccer mobile rights granted
Mobile content distributor Digital Orchid has been granted the rights to deliver soccer
content from the Premiere Serie A Games of la Lega De Italia across its wireless
distribution networks in the Americas. Granted through La Lega's media technology partner,
Blutech of Madrid, Digital Orchid's rights shall also include highlights and images from
2006 FIFA World Cup champion Italy’s national team games and the Champions League
tournament.
Globecast saddles up for Tour de France
Globecast, a global provider of satellite broadcast and content management services and a
subsidiary of France Telecom, is to supply France Télévisions and the European
Broadcasting Union (EBU) with satellite coverage of the 2006 Tour de France. Globecast
will deploy up to nine SNGs and mobile microwave units at each stage of the race supported
by 30 technical professionals from 1-23 July 2006. Footage shot via motorcycle and
helicopter by Société Française de Production will be transmitted over Telecom 2C back
to France Télévisions’ production trucks at the finish line via Globecast mobile
units stationed at various points along the course. In all, Globecast's solution will
support up to 20 simultaneous video signals for complete live coverage. Globecast will
also distribute EBU's international rights holder feed via satellite.
FISU launches streaming website
FISU, the International University Sports Federation, has announced the official launch of
‘FISU Web TV’, its Internet television channel that will showcase its Summer and
Winter Universiades. The Federation was an early pioneer of video production on the
Internet - during the 2001 Winter Universiade in Zakopane, Poland, FISU streamed its first
video programme on the web. FISU is extending its production by adding news and highlights
of its different activities: Universiades, World University Championships, Forum, meetings
and other activities organized within the Federation.
Women flock to online bingo
OnlineBingo.co.uk has found that 88% of online bingo players are female and the average
player is just over 45 years old. Interestingly the male players are younger than the
females at an average age of 37 with the women coming in at an average of 47 years old.
The two most widely played forms of online bingo are 75 ball and 90 ball.
OnlineBingo.co.uk found that 47% of people love both types, 46% of people strongly prefer
90 ball and just 7% of users prefer 75 ball bingo. OnlineBingo.co.uk found that the
majority of players - 38% - play online bingo daily. 15% of players were playing 2-3 times
a week and just 8% of players played only once a month. |
Sport And Technology
July, 2006
Website Profile: Servecast And The Rugby Super League
The Rugby Super League is a UK rugby tournament now considered to be one of the top three
sports in Great Britain under the Sport England assessment criteria, writes Kathrina
Gallogly, marketing and communications manager of Servecast. Its website,
www.engagesuperleague.com, has quickly established itself as a leading rugby league
website with approximately 120,000 monthly unique users. The web TV service, Super League
TV was developed and is managed by streaming solution provider Servecast, and it offers a
comprehensive video-based archive for rugby league in the UK.
The Servecast solution for Super League TV includes delivery of live and on demand video
and audio commentaries and the entire design and set up of the complete subscription and
delivery platform for the broadband service. To ensure only legitimate subscribers can
access the online content, Servecast provides the necessary tools to provide security for
all broadband video content including digital rights management, geographic controls,
prevention of password trading and support of multiple business models. Servecast also
manages the billing and security for the Super League website including set up of an
online payment interface, a tailored revenue tracking system and a subscriber database.
As part of the service, Servecast provides regular reporting at the end of each month
including content usage, user analysis, geographic location, sales and revenue related to
the pay-per-view and subscription sales.
Benefits to the Rugby Super League
With its broadband subscription service, the Rugby Super League can derive more revenue
from its rugby content through online streaming of the club matches. Super League TV
represents a type of electronic turnstile which, together with other forms of football
consumption - increases the league’s commercial advantage. Super League TV also
provides a high quality, online viewing experience and offers supporters a new stimulating
experience that will engage UK fans and fans overseas.
The RFL has a large international following, particularly in the US where there are many
UK expatriates. With an online video service, the Rugby Super League can expand and
acquire a global dimension to broaden its spectator appeal together with its commercial
and media value.
The implementation of Super League TV has different benefits for UK and overseas fans. It
enables the UK fans to access exclusive online content to complement TV coverage and their
experience at the Rugby League matches. Overseas fans can view live coverage online that
they may otherwise be not able to view on TV due to rights restrictions in different
geographic locations. Using the Internet, the Super League is better able to tap into its
global fan base which ultimately drives increased revenues and profits from its media
assets.
By promoting free sample video clips of archive matches on the website, Super League TV
can engage avid rugby league fans in the UK and throughout the world, and encourage them
to sign up for live and archive rugby coverage.
A successful broadband subscription service also enables sports organisations to grow
e-commerce revenues from online merchandise sales. The resultant increased traffic levels
to the website due to Super League TV will invariably lead to increased merchandise
income.
A crucial aspect of the development of Super League TV is to build a dynamic and
industry-leading website. The ability to webcast the league puts the Rugby Super League
right at the cutting edge in terms of sports broadcasting on the web. When the live video
service launched in June 2006, the service was a first for British Rugby League.
Superleague.tv - Live Video and VOD
Two games per week are made available live over Super League TV for international viewers
and are also available on demand immediately afterwards on the site.
The rugby matches are available live over broadband to all non-UK, French, Middle Eastern
and Australasian territories. A total of 62 games, approximately, including the play off
matches and Grand Final are streamed live over the Super League TV each season.
In the UK, France and the Middle East, the matches are available as archived,
video-on-demand content with a 24 hour delay. Ten minute highlights are also available
after a 24 hour delay from the end of each match.
Superleague.tv additional content
Live coverage of each of the seven Tri-Nations matches and the World Cup Challenge matches
are set to be made available through Super League TV. These matches will be included in
the pay-per-view and the subscription package.
The Tri Nations tournament captured public imagination, strong commercial investment and
worldwide media attention. Therefore the ability to deliver online coverage of the Tri
Nations is a major opportunity for the RFL to further promote its web TV service and grow
subscribers.
The Tri Nations brings together the world’s three leading Rugby League playing
nations - Australia, Great Britain and New Zealand - creating an opportunity to showcase
the vibrancy and competitiveness of the sport at this elite level. With Servecast’s
Media Studio, the RFL is very well positioned to use an effective online streaming
platform for international Rugby League to attract increased levels of media exposure,
spectator interest and sponsorship. The broadband subscription service is a format which
will serve the sport well in future years, particularly in reaching a wider audience.
Reaching the US
Through Servecast’s connections with Setanta Sports, a partnership between the sports
broadcaster and the RFL has been put in place so that the RFL can advertise, promote and
deliver Superleague.tv over Setanta Sports’ US Broadband service. Setanta Broadband
in the US is a highly successful service with rich content and growing subscribers. For
the RFL, the UK expatriate community in the US is a huge market and reaching fans of the
Rugby Super League in the US was a high priority. One of the key targets of Setanta
Broadband is the expatriate community in the US so this provided a perfect fit between the
two sports brands. Servecast facilitated the agreement between Setanta Sports US and the
RFL to enable Superleague.tv become available over Setanta Broadband.
Conclusion
The Super League TV broadband service is a great example of how the rapid growth in
broadband penetration is enabling leading sports content owners to reach a wider audience
and generate new and profitable revenue streams through broadband video delivery.
Using Servecast’s Medai Studio platform, the RFL can offer fans both in the UK and in
key markets throughout the world a new and exciting way to view the Super League. The
Internet is an increasingly important channel for all sports to reach fans directly. Super
League TV is a first for British Rugby League and will assist the RFL in reaching
potential new supporters.
Servecast’s unrivalled technical and commercial expertise delivering broadband
subscription services for sports organisations enables it to deliver a complete business
partnership that delivers on the potential of new media for sport. Not only can Servecast
implement the most sophisticated and advanced streaming media platforms, Servecast can
also offer commercial and marketing insight to assist in promoting broadband services to
end users and also can help to build commercial partnerships with other sports
organisations to grow the service. |
SportBusiness International
July/August, 2006
Asian Growth Fuels Sports Sector Expectations
Andy Fry, lead author of the forthcoming SportBusiness Special Report ‘Asia:
Opportunities in the Business of Sport,’ on the prospects for a boom in business in
Asia’s hot house economies
Asia
At first sight, the TV ratings figures from Asia for the Germany 2006 FIFA World Cup make
grim reading - with some parts of the continent experiencing an 80% fall in viewing
compared to the 2002 finals in Korea and Japan.
However there are a number of explanations for this downward trend which need to be raised
in mitigation. For a start, the time difference between Asia-Pacific and Germany meant
Asian audiences were always going to struggle to stay awake for evening matches. Then, the
fact that leading Asian contenders such as Korea and Japan both failed to reach the
knockout stage was also likely to have a negative impact on ratings. Finally, benchmarking
Germany 2006 ratings against the first-ever Asian-hosted World Cup meant a fall in
interest was almost inevitable.
The reality is that the sports sector in Asia (soccer included) is in a dynamic growth
phase. But to understand that, you need to get closer to the action. In South Korea, for
example, one million fans gathered at World Cup cheering points to show support for the
national team - echoing the enthusiasm exhibited in 2002. After a 1-1 draw with France,
most of the country went to work and school wearing red in support of the team.
From a business perspective, the event was an unqualified success - with Korean
broadcasters generating U$64m in advertising on the back of a U$27.5m investment in
rights. At the same time, the event drove Korean sales of T-DMB mobile TV handsets through
the roof. In June, 127,000 units were sold - compared to 84,000 in May.
World Cup fever wasn’t limited to participating nations. Singaporeans packed out bars
to watch games live while Hong Kong fans bet on football in unprecedented numbers. Prior
to the event, 47% of Hong Kong girls and 80% of Chinese women said they would be watching
- underlining the unique bond Asians have formed with soccer.
Just as significantly, India - a country not traditionally known for its interest in
soccer - saw a 50% increase in its average live audience with general programming
suffering in its wake. The opening match, between Germany and Costa Rica, attracted 2
million viewers to ESPN while 16-34 year-olds showed a particular willingness to stay up
late (past midnight) for live fixtures.
These upbeat indicators give a better sense of what is going on in the 3.5 billion strong
Asian market than top line TV ratings. With the economies of China and India booming,
Korea and Japan at the cutting edge of the global digital revolution and Singapore, Qatar
and the UAE positioning themselves as global business hubs, the macroeconomic prospects
for Asia look fantastic. And inevitably this is having a knock on effect in sport, media
and entertainment.
In its Global Entertainment and Media Outlook: 2006-2010, for example,
PricewaterhouseCooper forecasts that rapid growth in Internet, mobile, TV distribution,
casino and gaming revenues will help Asia-Pacific’s media/entertainment industry grow
by 9% a year to U$425 million over the next four years (faster than any other region in
the world). As part of this upturn, says PWC, the sports market will also see a boost due
to a revitalised television rights market and by revenues from sponsorship and
merchandising.
It’s not just on-the-ground enthusiasm for the World Cup that support’s PWC’s
optimism. The region is also witnessing significant investments in sporting infrastructure
as Asia attempts to demonstrate its growing muscle to the world.
The best example of this is the Beijing 2008 Summer Olympics - which is expected to
transform the sporting landscape across Asia. But there are other pockets of high
investment and activity. This December, for example, Qatari capital Doha will host the
2006 Asian Games. With an estimated budget of around U$2.8 billion, the event looks set to
establish a new quality thresh-hold for Asian sports marketing - both in terms of
on-the-ground event organisation and broadcast production. Elsewhere in West Asia, Bahrain
has brought Formula One motor racing to its soil while Dubai’s creation of the world’s
first-ever “Sports City” is a breath-taking feat of both engineering and the
imagination.
As Asia’s wealth and confidence have grown to match the sporting passion of its
population, so Western interests have begun to target the market. The likes of ESPN Star
Sports, Formula One, NBA basketball, Major League Baseball and the ATP Men’s Tennis
Tour are all now well-established as leading sports brands in the region.
For most of them, it has taken years of hard work to secure a beachhead in Asia - as well
as a realisation that sustained success in the region can only be achieved with diplomacy,
sensitivity to local concerns and great reserves of patience. What’s crystal clear to
anyone on the ground is that politicians, sporting bodies and fans in Asia do not take
kindly to Westerners diving into their markets in the hope of realising a quick profit or
creaming off the best of their homegrown talent.
European football clubs are learning that fact right now - having run some
less-than-successful Asian tours in recent years. But other rights holders have managed to
get the balance about right. The NBA, for example, has carefully nurtured its presence in
China by working with local interests to grow grass-roots basketball. Major League
Baseball, meanwhile, has established such strong roots in Japan and Korea that it now
challenges local leagues in terms of popularity.
This has been a good year for MLB following the successful launch of the World Baseball
Classic - baseball’s answer to the World Cup (held in March 2006, then 2009 - then
every four years). Although the final stages of the event were held in the US, strong
performances from Korea and Japan (the eventual winner) ensured that the WBC achieved
strong ratings on Asian TV. In Japan, the highlight was the local grudge match vs South
Korea in the Semi-Final. With MLB and locally-based stars both performing well, the game
took 50% share (36% of the population). The final, meanwhile, was Japan’s third
highest rating baseball broadcast since 1977.
The success of the WBC is good news for the MLB as it seeks to internationalise its brand.
But Japan’s victory in the competition is also a reminder that Asia is not just there
for the taking by Western interests. While Asia’s current crop of soccer teams are
not at Europe’s level, China will go into Beijing 2008 expecting to top the medal
table. In cricket, India and Pakistan rightly regard themselves as leading lights on the
world stage.
This in turn breeds commercial confidence within Asian markets. It’s significant for
example that the International Cricket Council has shifted HQ from Lords in the UK to
Dubai - a city that is much closer to the centre of gravity in the sport. And within
India, 2006 has seen a homegrown agency Nimbus secure Indian live cricket rights at a cost
of U$612 million over four-years. Rights holder, the Board of Control for Cricket in India
(BCCI), is reckoned to have raked in a stunning U$1.5 billion across all platforms -
making it one of the richest rights holders outside the US.
ROAD BLOCKS
Of course, anyone familiar with Asia will also warn you that there are numerous roadblocks
to financial success in the market. For a start, it is best not to dwell on the raw
population numbers in territories like China or India - where many people live below the
breadline. Instead, it’s important to realise that the major revenue-generating
opportunities primarily exist in the larger urban centres and/or areas of great natural
beauty [the exceptions being Japan and Korea which have all the hallmarks of modern
industrialised societies]. India and China may have more than a billion people each - but
the active commercial population is probably nearer 50 million in both cases (although
growing).
As outlined above, there is also an understandable resistance to losing control to Western
interests. But on top of this there are still issues such as corruption, piracy and
mismanagement to deal with in many quarters. Government interference is also often a
hindrance - with commercial sport often scrutinised suspiciously by politicians.
The revenue model is also different to that in the West. TV rights fees are generally low
- which is often a source of frustration for rights holders and a potential area of
conflict. The reasons for this depend on which side you come from. From the perspective of
Asian broadcasters, the argument is that they have insufficient budgets to pay more for
rights (except in a few cases - such as Indian cricket, FAPL soccer and MLB baseball).
From the rights holder perspective, the issue is more one of industry structure.
Territories like China and Vietnam, for example, have no effective competition to their
public broadcasters. In Korea and Japan, it’s more a case of broadcasters acting
together as cartels to suppress the value of rights.
It’s also difficult to extract licensing revenue from Asia. So the onus is largely
placed on securing sponsorship from multinational brands which want to build their
presence in markets. Although it remains difficult to leverage sponsorships (through
promotions etc), there’s no question that it is possible to use sport to a) reach
staggering numbers of fans across the region and b) make contacts in business and
government.
SPONSORSHIP RULES
The centrality of sponsorship explains why ad agencies play such a pivotal role in the
sports marketing business. Nimbus has been mentioned in the context of India but other key
players include PSM in West Asia and Dentsu in Japan. In February, Dentsu established a
new sports marketing subsidiary, Dentsu Sports Partners. The reason? It has seen a “rapid
increase in services related to sports event management and production. This has led to
substantially greater needs for resources focused on this area.”
That really is the key. While parts of Asia may fall short in terms of accountability,
transparency and governance, the region is exhibiting a dynamism, creativity and ambition
unparalleled on the global stage. That message comes through loud and clear from every
major territory.
In China the cost of putting on the 2008 Games is reckoned to be a staggering U$38 billion
- making it the biggest coming out party in the world. TWI’s Hong Kong-based Asia
chief Michael Mellor says quite rightly that it is impossible to underestimate the
importance of Beijing 2008. “People have fully comprehended yet how significant this
is. China has never before opened its doors to the rest of the world on this scale - in
sport or any other cultural sphere.”
But that said, it is a mistake to view the Asian opportunity as primarily based around
China. While it’s easy to understand the current rush of interest in the country (big
population, rapid economic growth etc), there are many other Asian opportunities which are
not a) subject to such rigorous government control and b) crawling with rival companies
seeking a piece of the action.
In Sport Business Group’s new report on Asia, for example, report co-author Miwa
Katayama is upbeat about the prospects in Japan - a territory which has been something of
an impregnable fortress until now: “Since the 2002 FIFA World Cup, Japanese sports
have undergone internationalisation,” he writes. “A number of top athletes have
ventured overseas and Japanese sports are reaching a global standard. Simultaneously,
foreign sports brands have become popular through various media and Japanese sporting
tastes have diversified. Revenue from sports participation has grown and there may exist
various business opportunities for overseas investors to enter the Japanese market.”
Still in North Asia, Eric Kim, executive VP of global marketing operations at Samsung,
claims Korea is “2-3 years ahead in wireless broadband” while Korean minister of
information Chin Daeje expects “the bulk of Korean households to have migrated to 100
megabits per second broadband by 2010.” Nearby, Taiwan is stepping out of the shadow
of mainland China by hosting the 2009 World Games. Held every four years, the World Games
is a multi-disciplinary event which features those sports which don’t make it into
the Olympic line-up. All told, nearly 100 countries and 3,000 athletes from sports such as
billiards, bodybuilding, bowling, water skiing, rock climbing and dragon boat racing will
take part.
THE SINGAPORE EXPERIENCE
Some of the major Middle Eastern expansion plans have been mentioned above. But then there
is Singapore. Although a much smaller market than India and less wealthy than the Arab oil
states, this Southeast Asian city state is an economic thoroughbred which has identified
sport as pivotal to its expansion. In October 2001, Singapore outlined plans to plough
U$280m into rebuilding its sporting infrastructure. By attracting sports agencies,
federations and events, it has set itself the goal of doubling the value of its U$400
million sports industry by 2010.
Against this backdrop, it has increased prize money for the Singapore Golf Open (now
valued at U$3m - the fifth most valuable national golf open in the world) and started the
process of transforming Singapore into an Asian water sports hub. It is also home to some
of the most significant players in the development of an intra-Asian sports market. ESPN
Star Sports - now investing in local and grassroots sports- is one. Another is the agency
World Sports Group - which has underlined its confidence in Asia by paying U$200 million
(until 2012) for Asian Football Confederation commercial rights - a ground-breaking deal
within Asia-Pacific.
NEW MARKETS
To their credit, some rights holders and sponsors are also sniffing out opportunities in
other less-prominent markets. The ATP has taken tennis events into Thailand and Vietnam
while Malaysia is on the rise as a golf tourism destination. Indeed, the entire Southeast
Asian coast from Thailand as far as the Indonesian island of Bali is tipped as a growth
area for both extreme sports and water sports (powerboating, windsurfing etc).
And finally there is India - which has the potential to be every bit as exciting a market
as China. Nimbus, for example, is believed to be following up its cricket rights coup by
securing a further $100 million from private equity backers for the launch of three sports
channels - a move which will take it into competition with heavyweights like Sony, ESPN
Star Sports and Zee. Should all go according to plan, Nimbus founder Harish Thawani
expects to be achieving $1 billion in sales within four years. Aside from Nimbus, India
has become a focus for international agencies such as Total Sports Asia, Ten Sports and
World Sports Group. Although the lion’s share of India’s sports revenues still
get swallowed up by cricket, these three are actively involved in growing the local
audience for second-tier sports like golf, wrestling and soccer.
Speaking in the new Sport Business report on Asia, Indian event management expert Vivek
Singh argues that there is “huge potential for sports marketing and sponsorship in
India as most properties are undervalued. The sports and entertainment market is growing
at 32-35% per annum. It is a sunrise industry and will be so for sometime.” That’s
a useful signing-off line - since it applies equally to the entire Asian market.
(Broadcast, Marketsurvey) |
SportBusiness International
July/August, 2006
Going Holistic To Deliver Audiences
The FIFA World Cup in 2006 demonstrated that TV partners opting to put live content online
benefited hugely. Paul Wright, chief of online sales specialists Aura Sports, looks at
what has been another defining moment in the development of cross-platform broadcasting.
A sunny morning in a riverside town in England and I am talking about the future of media
at a seminar. The audience is a major global brand who, like many, is trying to plot a
course though an increasingly complex media landscape. The debate is good, although
despite the vast experience in the room, there seem to be few certainties.
There are many concerns from the rise of new media to the very over hyped decline of TV
but there is some clarity. One speaker talks about the increasing important of big events
like the FIFA World Cup for brands trying to achieve ‘cut through’, and I talk
about the growth of digital becoming the most important change in the media landscape
recently. These themes strike a chord with the audience and a lively debate starts up.
Sadly for me, I have to leave so I sit on a train back to London wondering if the two
themes are compatible. I have worked across live events and new media for many years and
often in the rush to proclaim the future, we ignore the obvious.
So suitably energised I started looking for evidence of this. Well, it was not too hard to
find as endless comment has shown how the vast audiences for the World Cup proved success
for all things.
First there is TV. This has been a much maligned medium recently, with the prophets of
doom saying that in a new world people will not watch TV like these used to. Really? So
the World Cup comes along and proves big audiences are there - indeed so far World Cup
audiences seem higher than those before. Initiative media analysis of the tournament in
the UK suggested that audiences were up 8 percent in the early stages. Combine this with
the bigger world-wide audiences seen and sponsors are clearly getting their message to a
bigger audience than before.
Yet there was a significant drop in TV advertising revenues across this period - at least
in the UK. This may be a vagary of the advertising market here, but there are rumours ITV
has started telling advertisers it will not show big events like the World Cup unless it
gets more support. While that approach may be a little heavy-handed there is an underlying
suspicion that marketers have shifted budgets to new media.
Maybe this is true. In a market where consumers have changed their media mix, advertisers
are struggling to find the balance that works and there is certainly some evidence of
advertisers lurching from one medium to another in the search for this equilibrium. TV is
maybe the latest target (classified press was the victim last year) and new media has been
the beneficiary.
Equally, we must remember that mainstream channels like ITV need to offer broad audiences
to gain maximum revenues, sport does that for national games but in all the other games,
audiences become more niche. If you are looking for strong female audiences they are not
there. So, as an advertiser, why not plan to advertise in another period, where those
audiences return. What has happened this year could therefore be good media planning, not
a lack of interest.
But what does all this mean for ad-funded networks like ITV; does it have a future showing
sports events like the World Cup? Well, if they follow the audience shifts online they
might.
During the return to the web fortunes there seems to be the assumption that anyone in
online is doing ok. When the World Cup comes along you would expect all sites offering
content to do well.
Not exactly. I have spent three World Cups online and this is the most interesting. France
1998 – the web was new and all the sites did well, but the audiences were small and
the offering similar. The 2002 tournament was a natural progression, a few less sites yes,
but a wide spread and growing audience. 2006 has been the year of the user dictating the
successful sites and vast numbers coming to those sites. On the down side many other sites
struggled to attract an audience.
Suddenly the user is in control this time and rather than the old media model of people
sticking with the brands they use monthly, they seem to be chasing content and this time
around its video. The only sites to be claiming success were the broadcasters, especially
those who streamed the games (BBC in the UK) and inevitably the official site. The BBC
claimed that 1.7m people had accessed its streaming service and 3m users a day were going
to the site. Interesting Nielsen net ratings have claimed that this audience was higher
than for the official site in the UK market. Many sites without this content struggled to
attract any audiences at all and commercial revenues were affected.
However the BBC site is non commercial and despite the obvious issue that creates –
we cannot establish the business potential of such a site. I can only imagine that site
would have generated significant revenue in the online sector, maybe enough to have made
some impact on the revenue expectations that ITV may have had on the TV side of the
business.
So the debate seems to be reaching some clarity and the two themes do work side by side.
1. Big events attract big audiences in a fragmented media market. In many ways these mass
audience will be harder to find elsewhere and have great potential for advertisers and
sponsors.
2. Audiences will follow big events via all media; offering on one platform is weak. A
holistic approach will allow media owners to own the event they are partnering.
Maybe we will look back on this as the moment that event media worked in the digital age.
It’s a pity I cannot look back at Germany 2006 with the same optimism for my football
team.
Paul Wright is managing director of Aura Sports, www.aurasports.com. |
SportBusiness International
July/August, 2006
Just The Ticket – An Electronic Revolution
Matchday revenues represent a declining share of revenue for many professional sports
teams revenues, mostly due to the evolving media rights and sponsorship markets. For
example, the Italian Serie A football club Juventus generates just 10% of its €229.4m
income from matchday activities. Nevertheless, income generated on event day continues to
be one of the key revenue streams and, as was seen during the recent Germany 2006 FIFA
World Cup, ticketing continues to be an emotive issue that affects spectators, event
organisers, the media and sponsors.
Electronic Channels
Electronic ticketing, or e-ticketing, enables tickets to be sold and distributed in larger
volumes and much quicker than traditional paper-based systems. 95% of tickets for the
Germany 2006 FIFA World Cup were sold via the Internet and the use of this system provided
much more flexibility for the event organisers. Guido Stoy, FIFA's Ticket Coordinator in
Berlin, explains the benefits of Internet sales: “When we put 50 tickets on sale on
FIFAworldcup.com, they are sold out in a matter of minutes, regardless of the game.”
The Internet has facilitated the development of other channels, such as kiosks,
print-at-home ticketing and smart cards. These services mean that sports fans are now not
only able to book and pay for their tickets, but can also fulfil the transaction by
printing the tickets at the kiosk or using a home printer, or by downloading tickets to a
smart card. This is not only more convenient for the customer but also reduces the
vendor's printing and distribution costs.
Different methods of selling tickets, including secondary ticketing, online auctions and
yield management, have also evolved from digital technology.
The sports industry has embraced e-ticketing to the extent that it is now common for
electronic ticketing to be the preferred or, in some instances, the only distribution
channel for vendors. However, the same trend does not apply to Customer Relationship
Management (CRM), despite these systems having many synergies with e-ticketing.
CRM
But the sports industry is not alone in its antipathy towards CRM. AMR Research have
discovered that only 16% of companies that have implemented CRM have recorded evidence of
success.
Ticketing software vendors have identified that CRM offers a complement or extension to
e-ticketing and have developed modules for its products. However, a common misconception
is that CRM is just a software package. AMR Research found that 47% of organisations that
introduced CRM failed because of their business systems, despite the technology being
successfully implemented. Other causes of failure that are frequently cited include:
The system is not integrated with other customer touch points, such as retail outlets,
food and beverage, and other branded services.
There are inadequate data capture and management procedures.
The capabilities of CRM are not sufficiently exploited. Database is used as a generic,
homogenous mailing list and the opportunity to create personalised communication, pricing
and products is not utilised.
Marketing campaigns, including inbound and outbound activities, are not coordinated.
The chosen system is over-specified or exceeds the initial budget. Gartner Research
estimates that some US$5.7 billion was invested worldwide on CRM projects in 2005
The PSG Experience
There are estimated to be some 1.8 million football fans who claim to support the French
Ligue 1 football club Paris St Germain. However, six years ago the club recognised that it
only had records of 20,000 of these fans, and so contracted Oracle to implement a CRM
programme with one of the key objectives being to increase its database to 300,000
contacts.
Implementing and integrating the system has been a substantial project with the club
receiving some 250,000 inbound calls to its contact centre every year and an estimated
160,000 unique visitors to its web site. In addition to the numerous media outlets and
stadium facilities, it also has a flagship La Boutique du PSG retail outlet on the
Champs-Elysées that is a core element of the PSG brand as well as a valuable source of
revenue.
Despite only being founded in 1970, PSG has been one of the most successful, and best
supported, teams in France. But, the introduction of the CRM system and the new L'Esprit
Club membership scheme coincided with a period of disappointing on-field performances and,
as Figure X highlights, a decline in football audiences in France.
Figure X
Source: European Football Statistics
Despite winning the Coupe de France during the 2005/06 season, the club finished a
disappointing ninth place in Ligue 1 and did not participate in either of the UEFA
competitions. Nevertheless, it was the first season that the club were able to report
significant attendance growth since the adoption of CRM in 2000, with an average 40,486
fans attending each match at the 49,000 capacity Parc des Princes.
The experience of PSG highlights the time and resource commitments required to implement
CRM before any return on investment can be achieved. It also emphasises that attendances
are influenced by on-the-field performance as much as they are by marketing campaigns or
pricing policies.
Despite the evolution of e-ticketing and CRM it appears that the most effective driver of
ticket sales is still to have a winning team. The NFL Seattle Seahawks have acquired
19,000 new season ticket holders having reached its first Super Bowl in February 2006. 97%
of existing season ticket holders renewed, meaning the franchise now has an impressive
61,000 season ticket holders for the 67,000-seat Quest Stadium. |
SportBusiness International
July/August, 2006
Latin America – A Spark Waiting To Ignite
The Latin American sports markets stands at a cross roads, on the brink of a
transformation. Rodrigo Eyzaguirre reports on the changing confidence in the market and
the increasing tendency for the head to rule the heart in the sports business world.
Modern football has become two very different games played in two distinct arenas: One
game is played with a ball and boots. The other is played with a shirt and tie. In one
arena Latin American football is among the world’s elite, with three of its countries
sharing nine World Cup titles. In the other, the business arena, Latin America’s
results are not so impressive and it lags a long way behind European and North American
standards.
For this reason, many analysts say that the next few years are very important for the
development of sport as a powerful industry in the region. And some analysts think there
is reason enough to be optimistic about its prospects.
The development of the sports industry in Latin America has seen three distinct phases of
evolution. In the 90’s, there was fast and explosive development with record fees
paid for TV rights and many international agencies and sports companies setting foot in
Latin America for the first time ever in search of an untapped goldmine.
In a region where sports and football in particular are lived with passion, many thought
that money was easily to be made. But this was not California of 1850 and by the end of
the 90’s many investors had fled, especially when an economic crisis hit key markets
in the region including Brazil and Argentina. Now the Latin American region is
experiencing a third new era and TV is playing an important role in the expansion and
consolidation of the region’s top professional sports leagues.
Brazil is Latin America’s biggest country at 8.5 million km square and with a
population of over 188 million. It therefore no surprise that Brazil is the most
successful of all the Latin American nations in the top sports event such as the Olympics
and football’s World Cup. At the moment Brazil also ranks among the world’s best
in volleyball and it has several representatives in the world’s most important racing
competitions, Formula One, the Indy Racing League and the Cart Championship. This is
explained in part by the country’s size, but also because Brazilian sportsmen and
women are conscious of the important role sport is playing in the economic development of
the region.
Brazil receives the largest sports business income of all the region’s countries.
Recently, O Globo, Brazil’s biggest media conglomerate, acquired the TV rights for
the national domestic football championship in a deal worth a total of US$ 300 million
until 2009. This equates to almost US$50 million more per year than the last agreement.
This is way above the fees seen in the region’s next biggest markets, Argentina and
Chile. The Argentine Football Association has a long-term TV deal until 2014 with cable
sports broadcaster TyC worth US$31 million per year. And Chile is several steps further
down the ladder. Its top league the ANFP is about to sell, for the second time, its
highlights rights (giving one TV channel the exclusive rights to broadcast the highlights
of all games over the weekend). Negotiations will begin in the first week of August and
the league is asking for a minimum of US$ 4 million over two years.
But Brazil is also a league above the other Latin American nations in other ways and this
can be seen most clearly in the fact that many major Brazilian companies are now expanding
to other countries in the region and sports sponsorship has become their most important
vehicle for exposure.
The best example it is Petrobras (Petróleo Brasileiro, one the world’s biggest oil
companies) which agreed a deal to become the primary shirt-sponsor for Argentinean
football club River Plate. The deal was signed in March of 2006 and is reportedly worth
US$4 million over two years. Petrobras also sponsors the traditional Racing Club and a
team of one of the main stock car competitions in Argentina.
Brahma, a Brazilian beer company, may follow the same route in Chile. The country’s
biggest football club Colo Colo is looking for a main sponsor for 2007 and sources say
that Brahma’s interest in establishing a long-term relationship with the club could
soon lead to an historic deal worth over US$1,5 million a year that will rock the Chilean
sports market.
And Argentina too may have its own blockbuster sponsorship if, as reported, leading
football club Boca Juniors, finally signs a shirt-sponsorship deal worth US$13 million
over four years with online sports betting company Betandwin. The deal has been approved
by Boca's Management Commission, but is yet to be confirmed by the Representatives
Assembly on August 4. If it goes ahead it will have a huge impact on the region because
football clubs in Latin America are not used to signing seven-figure sponsorship deals.
Betandwin already sponsors the Portuguese football league and several European clubs but
this would be its first step into South America. If it wants to expand its business in the
region a partnership with Boca appears the right move, not only because the
"Xeneizes" are Argentina’s present league champions and most popular team,
but also because of the popularity of the team in other Latin American countries.
Sponsorship deals such Petrobras with River Plate and especially Betandwin and Boca
inspire analyst confidence in the market. Dario Brignole, who oversees IMG’s Latin
American business, says that sponsorships in the region have moved on – they are no
now a closer relationship with the team or the athlete. "The business has been
redistributed, it is getting more sophisticated. There are new types of business
developing". As an example, Brignole points to the fact companies are embracing the
"3 screen" concept of TV, Internet or mobile (and even iPods).
Other examples of the new kind of sponsorships are the deals signed by Toyota and Nissan
with the South America Football Federation (Conmebol) giving the Japanese company title
sponsorship of the Copa Libertadores, the region’s equivalent to the Champions League
and giving Nissan sponsorship of the Copa Sudamericana.
But none of this is enough for the Latin-American sports market to be in the same league
as Europe. Most of the continent’s football clubs are run as non profit organisations
and are not managed by marketing professionals, as professor Carlos Campos, of the sports
administration of the University of Cadiz, points out. "Sports marketing is a lot
more than a ball game. This business it is not played in a football ground. Many football
clubs in Latin America are run by people that think as fans. That’s why there is a
lack of knowledge and expertise".
According to Campos, the Latin American sports experience it is unique and cannot be
compared with United States. "In America they see the business as an entertainment,
but in Latin America it is different because there is so much passion involved".
Campos is right. Unlike the European and American sports markets, in South America very
few of the football clubs are private companies and that means the fans have a very strong
voice in the club and many decisions are taken thinking in short term rather than with a
long-term view to economic success.
Passion has always been a problem for South Americans. Sometimes that passion is expressed
through the violence between fans; sometimes that passion drives poor efficiency in
business. Results on the field or economic balance? That is the "to be or not to
be" of the sports business in Latin America. |
SportBusiness International
July/August, 2006
Online Programming Activities
DIGITAL ORCHARD SCORE SOCCER SERVICE
Mobile content distributor Digital Orchid has been granted the rights to deliver soccer
content from Italy’s Serie A across its wireless distribution networks in the
Americas.
Granted through La Lega's media technology partner, Blutech SA of Madrid, the rights also
include Italy’s national team and the Champions League.
Video highlights, interviews, alerts, games and a host of other applications will be
offered as part of the package.
Javier Gracia Alvarez-Ossorio, president of Blutech, said: “We chose Digital Orchid
as the exclusive partner for the Lega content because of its automated content platform
and its footprint as the leading sports and entertainment wireless media company in North
and South America.”
Digital Orchid has an extensive distribution network in the Americas and worldwide,
representing over 65 major sports, entertainment, gaming, and media brands around the
world.
SERVECAST SKATES TO NEW DEAL
Servecast, a specialist supplier of new media sportscasting, has secured a three year deal
with Ice media Productions - the UK company devoted to British Ice Hockey broadcasting -
to manage the live and archive broadband video service for the British Elite Ice Hockey
league.
Ice Media Productions have a three-year media deal with the Elite Ice Hockey League and
have already produced a series of 22 programme’s for NASN/Setanta on the UK ice
hockey scene.
In April, Servecast streamed the entire Elite League play-off weekend over
www.icehockeyleague.co.uk and managed the pay-per-view service including set up of the
payment interface and security systems. Following that success Servecast has been awarded
a three year contract to implement and manage the complete broadband subscription and
delivery platform for live and on-demand audio and video content of British Ice Hockey.
Heath Rhodes of Ice Media Productions, said: “Ice Hockey is a niche but popular
sport. It is difficult to get extensive coverage on mainstream TV, moreover as the
Internet is more readily available to households than Sky or other digital TV stations it
was imperative that we pursued an online strategy.”
METS TV PARTNER’S WEB REVAMP
New York’s new regional sports network - SportsNet New York (SNY) - has relaunched
its website and is promising exclusive clips of baseball action from the New York Mets.
The site, operated in conjunction with MLB Advanced Media, LP (MLBAM), the interactive
media and Internet company of Major League Baseball, is hoping the revamp will reinforce
its position in the marketplace and allow it to further capitalise on its broadcast
agreement to show Mets games on TV.
Jon Litner, president of the network, said: “The new SNY.tv will deliver unparalleled
online New York sports coverage in a cutting-edge fashion - becoming a must-visit site for
New York sports fans.”
SNY launched in March of this year, founded by Sterling Entertainment Enterprises, Time
Warner and Comcast.
It features up to 125 regular season New York Mets telecasts. (Baseball, Broadcast, |
SportBusiness International
July/August, 2006
Pay TV Looks For Anti-Siphoning Openings
• New proposals in Australia would relax restrictions on Pay-TV sports coverage
• A new "use it or lose it" scheme that will oblige free TV broadcasters to
screen sports they have acquired will start on January 1 next year.
• But Pay-TV broadcasters argue the proposed reforms must go further if they are to
compete effectively against the Internet.
Miriam.Sherlock@sportbusiness.com
Australia’s contentious anti-siphoning laws may be revised under the government’s
plans for the future of the media.
The government blueprint, unveiled by Communications Minister Helen Coonan, has sparked a
lively debate with much of the controversy centering on the regulation of sports rights.
It examines the reshaping of media regulations, lifting restrictions on foreign and cross
media ownership and setting out plans for the move to digital television as well as
revision of the present anti-siphoning rules.
The Australian listed events list is far more extensive than that in most countries with
over 1,000 events on the anti-siphoning list. Pay-TV broadcasters have long argued it
restricts them unfairly and allows free-to-air channels to effectively hoard rights,
buying them but not using them. The list was introduced in the 1990s at the insistence of
the late Kerry Packer.
Events listed include: the Olympic Games and Commonwealth Games, Melbourne Cup, AFL and
NRL matches, rugby union and league Tests, the majority of cricket Tests and limited-overs
internationals involving Australia, selected international football matches, top golf and
tennis tournaments, and motor sports series. Free-to-air broadcasters have until 12 weeks
before an event to show interest in acquiring rights before the rights are offered to pay
TV.
Pay-TV says the anti-siphoning rules actually prevent people from watching the sports they
supposedly protect. The Australian Subscription Television and Radio Association this
month released the results of a five-year study which says that from 2000 to 2005 the
percentage of sports protected by the anti-siphoning list shown live or on delay has never
risen above 24 per cent. In 2005, there were 6,503 hours of sport on the anti-siphoning
list and only 1,092 hours were broadcast live. When delayed broadcasts are added, the
figure rises to 1,560 hours - less than a quarter of available hours.
There have been several recent incidents where free-to-air broadcasters have come under
fire from fans. Tennis fans missed many matches at Wimbledon this year because Nine did
not screen them and the same network also failed to show significant parts of the recent
US Open golf tournament, won by Australian Geoff Ogilvy.
As a result, the government has now proposed a "use it or lose it" scheme, which
could be introduced from start January 1 next year. The changes would mean that the TV
rights to sports on the anti-siphoning list will be removed from the list if free-to-air
networks do not show an interest in acquiring them, permanently depriving free-to-air
networks of the right to make the first bid on them.
The definition of “use” is yet to be established. The government will hold talks
with all broadcasters and rights holders in the next few months, but it could mean some
events have to be shown live on free-to-air TV or they may migrate to pay TV or other
digital technology.
But Pay-TV operator Foxtel is disappointed the proposals did not go further. They want
further changes to allow them to compete effectively with the Internet which remains
unregulated in relation to sports rights. It says that unless there are further changes in
sports regulation, it has its back to the wall.
The government is attempting to find a balance between the concerns of commercial
free-to-air broadcasters keen to protect their revenues, the demands of the growing pay TV
market, and the interests of viewers and insists it is committed to having a really good
look at whether adjustments are needed and will decide in the coming months whether to
introduce the “use it or lose it” scheme from the first of January next year.
But most experts view the proposals as a big win for free-to-air networks Seven, Ten and
Nine, offering only modest sports-rights concessions. It is clear that for more
far-reaching changes, Pay-TV will have to wait until 2010 when the anti-siphoning list is
set to be completely reviewed.
ANTI-SIPHONING LIST: JANUARY 2006 – DECEMBER 2010
Olympic Games
Every event
Commonwealth Games
Every Event
Horse Racing
Each running of the Melbourne Cup.
Australian Rules Football
Each match in the Australian Football League Premiership competition, including the Finals
Series.
Rugby League
Each match in the National Rugby League Premiership competition, including the Finals
Series.
Each match in the National Rugby League State of Origin Series.
Each international rugby league “test” match involving the senior Australian
representative team selected by the Australian Rugby League, whether played in Australia
or overseas.
Rugby Union
Each international “test” match involving the senior Australian representative
team selected by the Australian Rugby Union, whether played in Australia or overseas.
Each match in the Rugby World Cup tournament.
Cricket
Each “test” match involving the senior Australian representative team selected
by Cricket Australia played in either Australia or the United Kingdom.
Each one-day cricket match involving the senior Australian representative team selected by
Cricket Australia played in Australia or the United Kingdom.
Each one day cricket match involving the senior Australian team played as part of a series
in which at least one match of the series is played in Australia.
Each World Cup one-day cricket match.
Football
The English Football Association Cup final.
Each match in the World Cup tournament held in 2006.
Tennis
Each match in the Australian Open tennis tournament.
Each match in the Wimbledon (the Lawn Tennis Championships) tournament.
Each match in the men’s and women’s singles quarter-finals, semi-finals and
finals of the French Open tennis tournament.
Each match in the men’s and women’s singles quarter-finals, semi-finals and
finals of the United States Open tennis tournament.
Each match in each tie in the Davis Cup tennis tournament when an Australian
representative team is involved.
Netball
Each international netball match involving the senior Australian representative in
Australia or overseas.
Golf
Australian Masters
Australian Open
United States Masters
British Open
Motor Sports
Each race in the Formula 1 World Championship (Grand Prix) held in Australia.
12.2 Each race in the Moto GP held in Australia.
12.3 Each race in the V8 Supercar Championship Series (including the Bathurst 1000).
12.4 Each race in the Champ Car World Series (IndyCar) held in Australia. |
SportBusiness International
July/August, 2006
Premiere Is Back In The Game
In a surprise deal just four weeks before the start of the new season, the two big Pay-TV
rivals in Germany united and will share the not inconsiderable benefits of broadcasting
the Bundesliga this season. Andreas Mayer of rfw reports. Just two days after the World
Cup final in Berlin and following the huge success of the Germany 2006 World Cup, the
party for German fans was surprisingly extended with the news that live Bundesliga games
will be available nationwide. Just four weeks before the start of the new season,
Pay-TV-companies Premiere and Arena agreed to co-operate in order to broadcast all games
live to all cable and satellite customers. Everyone’s a winner: Germany’s oldest
Pay-TV broadcaster Premiere is back in the game after initially losing the Bundesliga
broadcast rights to new pay-rival Arena in December. And Arena can now reach all German
cable customers. It had been in negotiations with Germany’s biggest cable company
Kabel Deutschland about distribution, but when those failed, it turned to Premiere.
Without Premiere, Arena would have had access to 10 million fewer households. It is a
happy marriage of convenience.
Kabel Deutschland controls the access to all cable viewers except those in the federal
states of Baden-Württemberg, Hesse and Northrhine-Westphalia. But Premiere has a deal
with Kabel Deutschland, so viewers in the remaining states can now receive Arena‘s
football programme via Premiere.
It took just 36 hours of talks in a hotel room in Berlin to end a month-long public fight.
At Cologne Mediaforum in May, Premiere chief executive Georg Kofler had denounced
Arena-Boss Dejan Jocic as “a nobody” and a player “who has not even entered
the pitch.” Jocic’s reply that “Kofler doesn‘t even have a pitch
anymore” proved wrong. The cunning old fox has shown that there is life in him yet
and he and has resurrected his image as an expert poker-player who always has an ace in
his pocket.
Kofler’s Pay-TV channel Premiere had seemed dead and buried after losing the
Bundesliga rights to Arena. Premiere’s share price tumbled about 40 per cent and
remained low, despite various attempts to re-gain access to the action. In the first
quarter of 2006, earnings before tax, interest and depreciation (Ebitda) fell to Eur9,
5million
Kofler blamed the disappointing numbers on the higher costs of broadcast rights,
especially in the sports segment. Additionally, the channel had to increase marketing
spend to counter churn. The main criticism from industry experts and subscribers was that
Kofler had taken a big gamble, and lost. He was willing to pay more money than Arena, but
demanded too much in return. He asked for a pushback of the primary highlights, on
free-to-air broadcaster ARD, from 18h00 to after 22h00, a price that the German football
league, its sponsors and the advertising industry considered far too high.
Premiere did all it could to lessen the blow. But even the announcement of a cut in
subscription fees and that of a deal with German telco Duetsche Telekom were not enough
for many subscribers. Premiere and DT agreed an in-principle agreement to broadcast the
Bundesliga, based on DT’s package of live broadband Internet rights and a
TV-Set-Top-Box provided by Premiere.
But what Kofler billed as a great triumph was in reality just emergency cover. Only 10 to
20 per cent of Premiere’s subscribers would have been able to watch the Bundesliga
via the Internet. And the league resolutely blocked DT from any wider-ranging broadcast
arrangement. There was a brief standoff between the two parties, before DT eventually
backed down, rumour has it because it didn’t want to jeopardise its chances of
winning the exclusive league title sponsorship (which it subsequently won) or because it
has a long-term interest in acquiring Premiere.
On the surprising news of the Premiere-Arena deal, Premiere’s share price surged 30
per cent. But as Isabell Hülsen of the Financial Times Deutschland comments, this
confidence is “not truly justified. In the long run, one fundamental strategic
problem remains. Premiere no longer has a monopoly in German Pay-TV and to address this
challenge will be the next big task for Premiere’s boss.” Other experts see
opportunities for a prosperous co-existence and attractive joint programming. Premiere
after all has the exclusive Champions League rights and Pay-TV rights for Uefa Cup-Games
from next season.
But there may be a new cloud on the horizon. The new spirit of friendship and co-operation
between Premiere and Arena has already forced the German Competition Authority into
action. Its investigation into the deal might have no immediate effect on the start of the
Arena/Premiere joint broadcast of the Bundesliga on August 11. But, it guarantees that
there is a lot more action to come within the next months on the sports broadcasting front
in Germany ...Watch this space.
THE WORLD AT THEIR FEET
As Chelsea won its second Premier League title last season the familiar suggestions over
the Premier League’s predictability, value and success re-surfaced. Yet says Miriam
Sherlock as the Premiership’s recent broadcast deals show, financially at least, the
league goes from strength to strength.
Deloitte’s latest Annual Review of Football Finance confirmed that Premiership clubs
remain by far the biggest earners in world football, with the top 20 clubs generating over
£1.3 billion in revenues – and that was before the latest round of TV deals that
will see Pay-TV broadcasters BSkyB and Setanta paying £1.7 billion over three years from
the 2007-08 season.
So, as they head into the 2006-07 season, the Premier League’s clubs are in good
financial shape, with another windfall to come next year. Deloitte’s report
highlighted the prowess of the Premiership clubs compared with their global rivals.
Premiership clubs it seems continue to benefit from a more even spread of revenue across
different sources and different clubs, and greater profitability than their rivals. And
they are set to profit not only from the new TV contracts, but also from increased
sponsorship revenues and naming rights deals, and from the expansion of their stadia or
moving to new grounds. The platform is there for even more revenue growth in 2006-07.
Arsenal will start the season in its brand-new 60,000-seater Emirates Stadium. The
development of the stadium, replacing Highbury, represents the largest ever investment by
an English club in its stadium. Manchester United this season inaugurates the ‘quadrants’
at Old Trafford. Filling in the corners of the ground will add over 7,500 seats, creating
a 76,000-seat stadium. Old Trafford’s capacity is 16,000 greater than any other
Premier League stadium (Arsenal’s is the next biggest) and the commercial advantages
for the clubs with bigger stadia are clear, assuming they can continue to sell them out.
It is no small coincidence that clubs have invested more than £2 billion in their stadia
since the launch of the Premiership, clearly acknowledging the importance of the stadia
revenue streams.
And Manchester United also starts the season with a new sponsor, its deal with insurer
American International Group (AIG) is the UK’s biggest shirt sponsorship worth
£56.5m over four years. Last year Champions Chelsea signed a £50m five-year agreement
with Samsung, previously, the UK's biggest shirt deal.
As with all of Europe’s top leagues the biggest five or six clubs are way ahead of
the rest, financially and on the pitch and many of the remaining clubs’ aspirations
now are limited to getting into Europe for those near the top of the table and surviving
relegation, for those nearer the bottom. The uncomfortable fact remains that the 2006-07
league champions will come from one of last year’s top four, and Chelsea are likely
to again dominate.
But the league’s predictability may well have boosted the FA Cup, which last season
was rejuvenated. It has a new sponsor this season in the shape of energy company E.ON in a
deal thought to be worth £8m a year. And the competition last year attracted its highest
TV audiences since the 2001-02 season, with viewing up 7% from the 2004-05 season on
free-to-air TV and 15% for the matches broadcast on BSkyB. The competition will be known
as the 'FA Cup sponsored by E.ON' under a four-year deal which also takes in the Women's
Cup and FA Youth Cup. (Broadcast, Financial, Soccer) |
SportBusiness International
July/August, 2006
Talking About A Revolution
Technology is transforming the sports media landscape and making once simple business
models more complex yet increasingly tantalising. In this feature Andy Fry examines the
role of sport within the media environment today and ask experts to outline their vision
of how it will look in 10 years time. He tackles the key questions of what consumers will
be watching, how much they will pay and by what method? And critically, asks how the new
marketing/media environment will impact on the revenue expectations of model rights owners
in primary, secondary and tertiary level sports?
SPORT IN 2016.
Imagine, like in the Carlsberg ads, we could create the perfect sports viewing experience.
What would it be? Well, for a start, most of us would stop referees and line judges making
bad calls. Cameras connected up to computers would ensure perfect offside or line calls
every time. Balls with built-in sensors would tell us if they had crossed the goal line or
gone out of play.
It goes without saying that TV pictures would be shot in HD and that the sound would be
crystal clear, surround sound. And those commentators who annoy us so much? Ditch them -
and select your own soundtrack. Then use the lightning quick interactive menu to chat with
friends, order a pizza or make a bet.
Different camera angles have been around for a while courtesy of digital TV (playercams,
in-car vision etc). But maybe we’d like to watch the game from the POV of our
favourite player. So wouldn’t it be great if there was some kind of flight simulation
headset that allowed us to be that player or athlete as they hit a home run, scored the
winning goal, broke that tape? If that makes you queasy, maybe you’d be happy just to
hear what they say during competition or - where the nature of the sport allows - have a
dialogue with them (sailing and cricket are already going this way - but microphones
embedded in kits could tell us what is happening on almost any field of play).
Now, rewind for a moment. Imagine we could create this perfect viewing experience without
having to exile our families for the duration of the World Series, World Cup, Olympic
Games etc. The kids could watch Lassie in the living room while we carried our own
lightweight plasma screens from room to room looking for the most peaceful spot. We’d
plug it in and there would be a myriad of choice. Not just domestic soccer but any event
you like. Baseball from Japan, cricket from India, some obscure cycling event in Southern
Europe. Pay a small sum (subscription, Pay-Per-View) and the world of sport is yours -
without you having to default to soccer simply to get a competitive fix.
And what if work gets in the way? No problem. Because we can watch live coverage via our
mobile devices or delayed coverage via VOD when we get home late at night. Or if we’re
abroad, maybe we can divert the signal from our home TV to our hotel room via an Internet
connection (a procedure now possible thanks to a US invention called the Slingbox).
Travelling? Then always make sure that any plane, train or chauffeur-driven car you get
into has a screen installed for you to keep up with all the action.
Many of the scenarios outlined above are either upon us or within touching distance
technologically. Mobile and broadband just keep getting faster - which means high-quality
video streaming is moving mainstream rapidly. At the same time, the new wave of
technologies defy the commercial boundaries we currently impose on sport. While the
majority of Italians, Japanese and Indians - like the rest of us - will all choose local
sports, local stars, local presentation where available, there is -
technologically-speaking - no limit on what sport we can watch and when we watch it.
Of course, all this assumes someone is filming the event in question and distributing it.
But with the ubiquity of hand-held cameras even that is not really an obstacle. The growth
of user-generated content on the Internet demonstrates that even the most niche activities
have their enthusiasts.
If all these things are to be available, what does that mean for the sport? Well the first
thing to say is that nothing can stop New technologies transforming business paradigms.
There will be variations on the same theme (Mac vs PC, VHS vs Betamax, DVB-H vs 3G, iPod
vs Mobile etc) - which means some unlucky execs will lose their shirt backing the wrong
horse. And it’s possible to lose money by miscalculating the speed of consumer
uptake. But the underlying promise of greater choice and control is always delivered
eventually. Companies with vested interests may put obstacles in the way of progress to
protect their business. But it’s axiomatic that they either die out or co-opt the
technology in question.
So we find ourselves at the technological tipping point. Everyone knows the potential of
digital - but there is a confusing array of platforms for consumers to choose from. And
companies which are currently sitting in pole position are engaged in an important
struggle for survival with the standard bearers of the new era. This is fascinating
because many businesses are being forced to throw caution to the wind. There is widespread
recognition in the media business that the audience will decide what works - and that
companies will have to wait until then before they can build profitable business models.
In the meantime, it’s important to stay focused and fresh.
So where will we be in ten years time? Possibly debating similar dilemmas, with the
sport/media business still embroiled in a form of permanent revolution. But the rest of
this piece hazards some guesses about the things that might have changed. But just
remember - as they say in the trade - that these are forward-looking statements and we
reserve the right to deny them completely in ten years time. After all, if we knew we were
right, we wouldn’t tell you, we’d be doing it ourselves.
Major Rights Holders
It’s inevitable that major rights holders will be in more demand than ever. Any event
capable of bringing a large audience together at one time will remain sought after by
advertisers - who will continue to pay more and get less. But, marketing will need to be
better. The choice of sponsors will be as much about their ability to promote an event as
the cash they put forward.
Digital convergence will make platform distinctions confusing at best, meaningless at
worst. Rights will be divided by time-parts (live, near-live etc). Exclusivity will still
command a premium but there will be a rise in semi-exclusivity and inventory
cherry-picking to accommodate a range of partners. Better rights management will mean more
rights revenues.
Direct-to-consumer digital distribution will undoubtedly be part of the mix. So rights
holders will be broadcasters and retailers - bringing in third party expertise to help
them maximise business efficiency in those areas. Governing bodies, leagues, clubs and
individual talent will, inevitably, have repeated showdowns over revenue share. In a world
where clubs can deliver content directly to fans, questions will arise about which
federation or league brands have commercial value and which are just administrative
shells. As a rule of thumb, scenarios where competing franchises are equal because of
league rules (wage caps/similar catchments/talent distribution) tend to reinforce the
central brand - while sports which tacitly support financial inequality create a centre of
gravity around club brands. Both scenarios, however, can work for individuals.
There will be growing reliance on sophisticated revenue modelling - analysing the true
relationship between ticketing, TV, sponsorship and long-term brand equity. In the rights
arena, every piece of sporting inventory has a value which is currently not always
realised. While forward planning requires some large-scale building block deals to be
done, contracts will require enough flexibility for some rights to be traded in a more
short-term, city-trader way.
Smaller Rights Holders
Smaller rights holders will have to take charge of their own destiny - and those which do
can benefit financially. Although it will be impossible to achieve a high-profile on
popular free or PayTV broadcast platforms, broadband is an opportunity to create a
video-led destination for enthusiasts. Sports which struggle to reach critical mass in one
territory will find a way to build a global audience if they are managed effectively by
federations and agencies - simple as that.
The challenge is to keep running costs down while maximising revenues. Costs could be
controlled by encouraging user-generated content, employing playercams (where appropriate)
and getting advertisers to fund content in return for access to audience (a scenario that
will require sports to work in tandem with each other - since this will give advertisers a
greater aggregated audience). As for revenues, rights holders will need to explore all
models - including DVD and download sales, subscription, PayPerView, personalised content,
sponsors and competitions (train with/meet a star, go to major events).
Broadband sites will also act as the emotional heart of a sport - helping shape
international strategy. Intelligent filtering of information for insights will tell rights
holders where the big markets are, which are ripe for expansion and what changes fans
might be willing to pay for.
Content Distributors
The neat boundaries between platforms are already disappearing. In the future, there will
just be media brands - and their priority will be to reach audiences by whatever means
possible.
Terms like print, radio, TV, online, mobile are all of secondary significance in this
platform-neutral world - as are cable, satellite, IPTV and DTT. Audiences just want
content and will take it from brands that deliver what is expected. Media companies will
need to acquire, launch, form joint-ventures & sub-licence space to meet that demand
via as many touchpoints as possible.
Deals such as News Corporation’s acquisition of online destination MySpace show how
deep-rooted this process of change is. But a big issue for the future is how elastic
consumer brands will prove to be. Can a satellite PayTV brand such as Sky set up shop in
the mobile and online space and take audiences with it? With the right sports content, the
answer is yes - though it is unlikely that the Sky brand will ever have the emotional
connection with its fans enjoyed by, for example, MTV.
Platform neutrality isn’t the same as saying all media brands are equally
well-positioned. Depending on their starting points, each has different competitive
advantages. Free broadcasters have historic advertiser-relationships and broad brand
awareness. PayTV broadcasters have subscription revenue and audience insight. Telcos have
retail skills and legacy infrastructure.
Universal DTT will be here in 2016 - which means free broadcasters will do well to command
more than 15-20% on their primary channel for general programming. So watercooler sports
events which transfix a nation will be advertiser gold dust (as well as a channel
marketing asset). Free broadcasters will combat audience erosion by launching channels in
the PayTV space.
Much of what happens in 2016 will depend on regulation. But it stands to reason that if
platforms are neutral there will be pressure towards consolidation. In the UK, for
example, BT Yahoo straddles the IPTV/ISP boundary while Virgin Mobile/NTL bridges mobile
and cable. The AOL Time Warner merger of 2000 is yet to really deliver on its promise. But
is that simply because it came a decade too early? It’s hard to avoid the conclusion
that Google, Yahoo and MSN will have a pivotal role to play - or that telcos and cable
companies are so similar in character that they would make for good mergers.
In 2016, we might not simply be looking at existing media players. If digital platforms
become more retail in character, then why shouldn’t retailers like Tesco or Walmart
enter the media space as key players? US content owners, betting companies and banks might
also have their reasons for taking closer interest in the sector. Sony Playstation and
Apple iPods, meanwhile, are also high value brands which overlap with existing sports
delivery mechanisms.
Is there a point at which public broadcasters’ audiences get so low that governments
pull the plug? We’ll know by 2016. Most secure are brands like China’s CCTV -
which is a government communications tool. But what of organisation such as the BBC -
where the majority of content is not really distinguishable from that on offer by
commercial rivals? In the future, when the TV market more closely resembles the publishing
market, will the justification for a £2 billion tax (in the UK) still exist? On balance,
the answer is likely to be yes - since pubcasters like the BBC are also proving their
value in terms of driving DTT and online usage. But it wouldn’t be a surprise if
budgets are cut and such organisations have to retreat from the most commercial parts of
the media business - sports rights being one example. A proviso to this is if
organisations like the BBC are allowed to carry advertising and launch more commercially
aggressive services (eg in the broadband space).
Producers
In other genres, producers are looking at whether they can become mini-broadcasters by
retaining the rights to their best shows. In sport, this model doesn’t work so well -
because rights reside with federations, leagues, clubs etc. A clue to the sport producer’s
options is given by IMG/TWI. The basic model here is for production to be hooked into core
event/talent representation - so rights holders can be offered a full-service offering.
This looks like a future-proof model - with agency-producers creating events, producing
content for mobile/web, managing archive etc - with a view to securing fees or revenue
share. It’s interesting however that IMG-TWI has also started buying non-sport
producers - a move which suggests that it is a) conscious of the limited opportunities
within sport to own assets directly b) looking at the opportunity to be a broad-based
channel provider in its own right.
Agents/Markets
As for the agency model, there’s sometimes a perception that agencies are old world -
and that rights holders are best off going it alone. But that is a complete misreading of
where the market is going. Agents, brokers, rights traders - whatever you call them - will
be a pivotal part of the endlessly changing digital landscape. They will play a key role
in new market expansion and the shift to a form of real-time rights trading. If there is a
paradigm shift it may be that mainstream media and advertising agencies take a greater
grip on the market (like the Dentsu model in Japan). Markets like Sportel will change but
not die. Inevitably more content will be traded online - so the Sportel brand needs to
position itself as a form of trading forum at the heart of the Web. The event itself will
maintain its value as a relationship-building forum not a sales event.
Sponsors
Sponsorship is already supplanting advertising in the engine room of client
communications. But the need to be closer than ever to editorial content can only
intensify as audiences continue to fragment. There is still some ambivalence regarding
virtual imaging technology. But by 2016, brand substitution will be commonplace. Indeed,
improvements in sponsor recognition technology and analysis mean this market could be a
much more dynamic trading environment - with media agencies much more aware of the value
of onscreen visibility and rights holders much better able to segment it by time,
territory etc. Audience dispersal across new media also means that sponsors will need to
become more embedded with content. There will be more direct rights ownership and more
budget for content creation. eg - At this World Cup, adidas and Nike both made a main TV
ad and a range of executions for use virally on the Intenet.
The big unknown here is regulatory intervention. By 2016, with the obesity crises at a new
level of intensity, it’s possible that brands like Coca-Cola, McDonald’s and
alcohol brands will be barred from sponsorship - in the way tobacco already is. It’s
also possible that brands that are bad for the planet will start to be targeted -
gas-guzzling cars, airlines, energy inefficient corporations etc.
Viewers
Oh them. Even in a digital on-demand world, people will still want live watercooler events
(the World Cup or Superbowl etc). Just how much of their overall viewing they take control
of is anybody’s guess - but trends in the retail sector suggest we will move swiftly
towards on-demand within the framework of trusted brands. Again those might be media
brands - but they might not. If we rent DVDs, buy music and open financial accounts with
retail multiples - then why not buy on-demand content too? (shop here this week and
receive a month’s VOD content for free etc).
In an on-demand world, there is clearly potential for incremental revenue from i) fans who
can’t get to their TV at the appointed hour ii) fans who are geographically-displaced
iii) fans of second-tier sports/small clubs who can’t get access to content through
conventional media. But how much control can they take? Could fans fund event
creation/production directly? If an online community was told that an event could only be
produced if they each paid a specified sum, would they pay it? And would there be a
mechanism for them to receive revenue back (maybe as a subscription discount) if that
content subsequently developed incremental value? Could this democratic approach also be
employed to indicate a preference regarding commentator?
There’s also the question of how much fans would want to live the experience. While
there may be limits in the ability to simulate live experience, the game sector may be
able to recreate the visual (and possible even the physical experience) of playing before
too much longer.
Individual Talent
Comedian Ricky Gervais is selling podcasts of his own show to fans at US$2 a pop.
Inevitably there will be a market for sports stars to do something similar - though fresh
content will be key (training, tricks, events, autobiographical revelations etc). Gervais
started podcasting for free - and there are some who are irritated by his decision to
charge for content. So it’s possible that some podcasting will need to be done for
free with a view to driving fans to other platforms. Aside from podcasts, big stars will
monetise their rights through personalised content such as greetings cards. The more an
individual (or group of individuals) is willing to pay a star - the greater the potential
for unique offerings.
In terms of contracts, this brings us round to the thorny issue of image rights.
Individuals will become increasingly adept at monetising their fame - and this will need
to be factored into contracts with teams, leagues, events etc. What they all need to
remember is that no piece of the business works well without the others - and failure to
keep this in mind alienates the most important part of the equation: the audience. |
SportBusiness International
July/August, 2006
Viewpoints: Where The Experts See Us In 2016
How different will the sport viewing experience be in 2016? Will we watch watercooler
events in the same way? Or will the sports audience be much more fragmented in terms of
where it watches and the sports it chooses to watch? Will any high-profile sport on TV be
free in 2016? Will there be channels as we know them like Sky Sports? Or will our
relationship be with core content rights holders such as clubs and leagues? Will there be
a profusion of broadband channels showing sports video and what will be the business model
–full-blown channels or individual PPV events?
How will sports content to be piped into our homes? Will we have the digital equivalent of
a gas boiler (a central server) in a cupboard which supplies every room in the house? And
what kind of things will we use mobile for? Will we watch full-blown games or merely short
segments? Will it be a phone or some kind of hybrid device?
And finally what does all this do to sports rights? Who gets more money? Does it change
the way rights are traded? Industry voices answer these questions and give us their view
of the future.
NARROWSTEP FOUNDER IOLO JONES
The water cooler will be virtual, and people will “gather around it” as the
match is happening - ie use chat forums. An amazing number of people watch sport and
communicate on online forums already (eg the BBC’s Scrum V forum). Community-based
watching is what the future is all about. I use the term global tribes to describe
collections of people who have something in common but are geographically separated. These
will range from small tribes (we’re just about to launch Archery TV) to much larger
tribes, eg England supporters around the world. The audience, as a result, will be much,
much more fragmented and selective in what they watch.
I’d predict that around 75% of content will be free-to-air, paid for by advertising
and sponsorship - not a major change from now. However, I expect more major brands to
become broadcasters and own channels - Go Beyond TV which we recently launched for the
Land Rover division of Ford is a good example. Other revenues will come from PPV,
subscription, ecommerce, gambling and competitions.
There will be a profusion of broadband channels showing sports video. The precedent is the
publishing world. A global specialist magazine such as Sport Business would have been
impossible in the seventies and eighties. Only when cheaper production, improved
distribution and a global audience was established did it become viable. The same thing
will happen with channels. We have recently launched two martial arts channels. They’re
quite different from each other, with one based in the US and the other in the UK, but
they’re clearly competing. The technology is now incidental - Narrowstep can get a
channel up and running for you in a few hours - the challenge is the commercial
development of niche audiences. There’s room for thousands, if not tens of thousands
of successful commercial channels, but perhaps not for millions. The long tail effect
applies - a few will be very successful, others will be part time or hobbyist channels,
and everything in between.
The gas boiler is a nice analogy, and this may be true in the short term with devices
built on the Media Centre and Vista editions of Windows. But in the longer term I believe
that the opposite will be true. There will be one cable delivering broadband speeds of 8 -
25Mbps, a screen and everything will be controlled from servers. Why record a show when it’s
always available? Just tag it into your favourites list. Why have two hundred channels
coming from the head end (many cable companies have no room for more channels) when you
can have tens of thousands of channels? The option is there to download the show to a
mobile device if you’re on the road.
There will be a handheld device - based on a mobile phone - which will act like a remote
control, a credit card and a portable access point. I was in Italy on the evening of the
Italy v Ghana World Cup match and saw two guys huddled in a doorway watching the game on a
mobile phone. It’s a trade off between availability and quality when it comes to
mobile. The mobile as a credit card is a much more significant development in my opinion.
On Narrowstep’s telvOS platform you’ve been able to pay for content on your
mobile for some time - and now even Paypal, which has a 100 million accounts worldwide,
provides this option. This will be commonplace when the mobile networks realise that
fleecing service providers with high charges is costing them money by not bringing volume
business.
Ironically, we’ve found scheduled programming is more popular than on demand (by a
startling factor of 80% - 20%) and that viewing times on both broadband and mobile can be
longer than on traditional channels (our average viewing time across all commercial
channels is 47 minutes).
At Narrowstep our vision is the real time bartering of rights, where the market decides
their value. Loss-leading with big marque deals will probably not remain effective, and
there are only a handful of rights that fall into this category anyway. We also see a day
when a group of fans can band together and bid directly for rights - especially for out of
territory rights. I know some Englishmen in the US who would do anything to get their
county cricket coverage.
INDEPENDENT CONSULTANT - BILL SINRICH
The water cooler experience won’t be that different because people will still look
for the most comfortable and practical ways to watch live events. I think the younger
generation will expect more interactivity because they have grown up with it. I’m not
convinced by offering viewers different camera angles but betting options would make
sense. So does being able to follow two games simultaneously or watching a 2 minute wrap
up of what you have missed if you come in at half time. What has been interested in this
World Cup is the number of people who have gone out to pubs or watched on big screens.
That, if anything, is a retro trend which shows that fans will decide for themselves how
to view games.
The 2014 World Cup and 2012 Olympics will be on free TV - so that model is here for a
while. Existing broadcasters are a safe haven for rights holders and are prepared to pay
for rights to make sure they stay relevant. That said, federations, leagues and clubs will
start to target consumers directly more often as the means of payment becomes simplified.
This won’t all happen in one great leap. But as rights holders like MLB and the UK
horse racing sector start to generate revenues others will take a risk. It is definitely
moved past the experimentation phase.
True minority sports will depend on how willing participants and enthusiasts are to pay
for greater depth of content. But yes they will have a more prominent role in the
broadband world. I think they still have to be cautious about the cost of producing events
that haven’t already been filmed for some other purpose. But connectivity is cheap so
why not?
The issue of content being piped into the home is not so much how sports content gets into
the house but how you get it around the house. As easy, inexpensive choices emerge
consumers will be interested, but the market is reliant on their understanding of how to
make wireless broadband or hardwiring solutions work. As for mobile, people won’t
choose to watch their favourite events on a small screen. But mobile is about getting the
best experience under the circumstances. It offers audiences convenience.
Well-advised rights holders have so many options available they have to be the
beneficiaries. On the one hand, live sport is one of the few things that people have to
watch live and will stop their day for. On the other, fans are always looking for
additional tiers of content. There is a move towards contracts which allow rights buyer to
take all live rights - and use them in any way they see fit. But I still think there is
merit in segmenting live rights among different businesses which are targeting different
audience groups.
Everything we’ve said above tells me agencies will continue to have a key role. It’s
going to be really important to have people who understand all the complexities of the
business - not to mention the intricacies of packaging, production and distribution across
multiple platforms. I also see the continuing need for strong, independent players - free
of ownership from broadcasters and agencies.
TWI UK AND NEW MEDIA SALES - BEN NICHOLAS
Massive games like England in the World Cup will be the same mass viewing experience on a
50” plasma as they are now. Big event programming is here to stay, the question is
whether it’s MSN or BT delivering it, rather than BBC and ITV. If it’s the
former (IPTV) then they will have an environment surrounding the game in which you will be
able to watch pro-zone, select stats, bet in-game etc – not unlike the BBC World Cup
interactive service had recently or Sky Sports have with FAPL, but much fuller. That will
then be linked to email/messaging (VOIP), ordering pizza, downloading England songs etc.
and you will also able to download Beckham’s free kick/Ashley Cole’s tackle to
your phone to make this week’s real tone. For a massive game, I bet the viewer
chooses to forego these services. But for Angola v Ukraine?
Whether high-profile sport on TV will be free in 2016 depends on governments – In the
UK listed events like the World Cup, Wimbledon and The Open have to be on terrestrial at
the moment. But Test cricket isn’t listed and is now all on Sky Pay-TV - provoking
much controversy. Some Federations have started their own channels (Tennis, Golf), but for
them to compete on their own, using their own big rights (e.g. not selling these rights
for multi-millions) would rely on incredible global distribution of ESPN proportions. Have
they got the cash to set that up - I doubt it (except perhaps FAPL or Indian cricket). I
think SKY/strong sports channels will always have a role, especially now they understand
the future impact of new media. We are lazy and like a one stop shop for our sport.
Yes, there will be a profusion of broadband channels showing sport video with all kinds of
business models. There will be many small channels for niche sports (probably sponsor
driven). And PPV for sports with limited appeal (when live) or ‘out of market’
sports combined with exposure deals on TV – to be used more as a marketing channel.
Theoretically one giant pipe (100meg) into a server which serves a keypad and massive
screen (and several other screens around the house) would get content into the home for
the digital home/wi-fi etc. VOD, email, TV, PVR, music etc. But probably more
realistically for the next 10 years, we will be using three different set top boxes, eight
remote controls and mass confusion!
Mobile is great for when we can’t see something, because we are displaced. All
broadcasters will eventually stream live on mobile, so when you are at Archie’s
sports day, you will still be able to watch the game live. It’s not your chosen
experience, but it’s definitely better than nothing. Mobile is also about storing
favourite episodes of Lost and great football/music clips for when you are delayed at
Heathrow. That’s all 3G technology. This will be coupled with DVB-H technology (if
spectrum is released) where you will pay a monthly fee to get your favourite three
channels which you can dip into (geographically limited, although roaming issues still
exist).
What does all this do to rights? It establishes values (and a market) for ALL categories.
Increasingly, broadcasters want everything (TV, mobile, DVB-H, downloads, VOD, broadband)
but only pay one price - which doesn’t properly reflect the sum total of what all
those values make up. Rights holders are in danger of being squeezed, so values must be
created/attributed to everything. Like the recent FAPL tender with 5 separate categories.
It’s also key to be platform neutral. Live, delayed, highlights, clips can go on any
platform so the BBC can bid against BT which can bid against Vodafone for any time-window
specific rights.
SPORTEV - WILL MUIRHEAD
I think the fundamentals of the sport viewing experience will remain the same. If you can
get to a big screen TV, you will. The crucial difference will be that you will have
options. If you are stuck at work, out with the kids or on the move, the technology and
the rights will be in place to access content anytime, anywhere, finally! Given the path
most key rights holders have chosen so far (platform agnostic), it doesn’t look like
the various revenue streams from a live broadcast will be split across multiple vendors on
multiple platforms.
Gambling is really interesting. Betfair’s mobile product, launched for World Cup
2006, has been hugely successful. It allows punters to bet while watching the game in pubs
and at friends’ houses. Anecdotally, it has resulted in friends of mine acting as
bookie interfaces - making bets on their own account from cash-paying punters in pubs!
This area is going to grow and grow.
Will our relationship be with core content rights holders? Racing UK has demonstrated that
rights holders can own channels and operate profitable services without the broadcaster as
intermediary. Further, I think the success Setanta has had in acquiring FA Premier League
rights points to the growing confidence investors and independent players have in the TV
market. Sport is not necessarily a “driver” of cable/satellite services anymore.
That job has been done. Sky has decent penetration and, given the phenomenal success of
Freeview’s growth, new channels (either federation-owned or "New entrant”
owned) are now a realistic option. Access to multichannel television is mature and new
channel ownership will flourish. As payment options become increasingly flexible, I’d
expect channels to offer both paid-for and free content.
Mobiles will provide access to live sport when no other alternative is available or
accessible. Having said that, I am still a firm believer in mobile being ideal for clips.
The mobile clip market is still in its infancy and has a long way to go.
As ever, rights holders are in the box seat. They can monitor developments and make rights
window and platform decisions based upon the demand for their sports as and when
appropriate. New pipes mean new entrants which means greater competition. More competition
means higher prices. Greater penetration of new platforms means new entrants (or the
federations) have a greater chance of making their bets pay.
BT TELEVISION SERVICES - DAN MARKS
Major live events will always command an audience who respond to their essential drama.
However, on demand access will allow customers to replay them. Seamless interactivity will
be part of the experience of watching all television.
It's hard to predict if any high-profile sport on TV will be free in 2016. But it will
depend on the impact of broadband on advertiser-supported and public-service broadcasting
models. As with any new market there will be a range of models and the most compelling
will survive.
Content is likely to be held both on a network storage device and a local storage device
to be distributed to PC, TV or other device in the most efficient way. The BT Home Hub
that will support wireless Internet, telephony, digital telephony and BT Vision (the new
IPTV offer) is already moving the home in this direction.
OLIVER SLIPPER CEO PREMIUM TV
The impact on the way games are consumed will not be as great as many people believe.
However, the quality of output will be greater, as TV will be viewed on super HD, Internet
coverage will be streamed at similar quality, and handheld media devices will no longer
rely on mobile connectivity to transmit poor quality video but will broadcast high quality
content through traditional broadcasting technology. Also, expect new applications to be
developed, such as ‘one click in-running betting’ through all media.
Media will continue to fragment, and specialist niche coverage will continue to grow. So,
in short, expect listed events, such as the World Cup, Wimbledon and Grand National, to
remain free-to-air but broadcast over multiple platforms. We can also expect to see the
emergence of many more specialist subscription channels on DTV, broadband and other
platforms, which will be focused on specific sports (ie Tennis, Golf, Martial Arts) or run
and managed by major rights holders – Premier League TV, for example. This does not
necessarily restrict coverage of their product on other channels, but will offer the
hardcore fans an in-depth top-up service.
The Internet allows brands to target consumers and specific audience demographics in a far
more scientific way than television ever allowed, and the way the market is growing this
could be a viable business model by 2016 to support the acquisition of major sporting
rights.
From both a quality and rights perspective, mobile users will be able to consume and
interact with the same content as on other channels. Mobile devices will still be used to
browse and snack on-demand clips, but also will allow people to follow live programmes and
events on the move.
Rights holders will get more, although their costs will increase - particularly legal - as
it becomes more expensive to monitor and service these multiple platforms, while agencies
will need to diversify their business structures. Many are one-dimensional and rely on
commissions from the sale of content to linear TV platforms. You will see the rise of the
small, flexible, dedicated and focused agencies (whether part of a bigger entity or an
independent). |
SportBusiness International
July/August, 2006
World Cup Broadcast Operation Breaks New Ground
The 2006 FIFA World Cup promised a number of broadcast innovations… and it delivered.
But now all eyes switch to South Africa which, in 2010, will be the first African country
to host the tournament. Miriam Sherlock looks at the broadcasting advances made in 2006,
and asks what lessons can been learned for 2010.
The 2006 World Cup delivered the highest achievable standards of coverage, facilities and
services to broadcasters - including new media companies - and ultimately to the viewer,
providing a round-the-clock, round-the-world viewing experience. Yet the 2010 World Cup
has already attracted more TV and commercial interest than the 2006 tournament according
to Fifa president Sepp Blatter, making for an even bigger, more complex and more
sophisticated broadcast operation than before.
It is conceivable that the sports broadcasting world might change more in the next four
years than it has in the past 10. But the 2006 World Cup was already at the cutting edge
of the available technology. The most obvious broadcast innovation from 2006 was
undoubtedly the production of all 64 matches in HDTV. But another key advance was the
introduction of a new media server, which enabled broadcasters to enhance the quality of
their production and provide a unique experience for the millions of viewers worldwide on
both the small in-home and big outdoor screens.
The 2006 event was a learning curve for the Infront Sports & Media agency and its
dedicated broadcast arm Host Broadcast Services as well as for the world’s
broadcasters. Host Broadcast Services will seek to build on the successes of the 2006
World Cup and to make changes and enhancements based on the evolving technological
landscape. There are certainly no worries about 2010, only a sense of excitement.
BROADCAST PERSPECTIVES
The world’s most watched sports event beat expectations in terms of TV audiences (see
TV Audience World XI). Infront Sports & Media, the company exclusively responsible for
TV sales of the 2006 World Cup made the event more widely available than ever before and
there were the highest number of broadcasters in World Cup history, with over 500
providing coverage in virtually every country in the world. The projected cumulative
viewing audience for the World Cup is 32.5 billion.
The epicentre of broadcast events was the International Broadcast Centre (IBC) in Munich
and the 12 stadium venues. The official Infront and HBS headquarters were in the IBC and
most major broadcasters ran their operations from there. Within the IBC, the master
broadcast centre was the hub of operations. Here the incoming and outgoing feeds were
monitored and, as Francis Tellier chief executive of Host Broadcast Systems put it, the
master control room was “the kitchen that prepared the steak according to the wishes
of the broadcasters. Once the control room served it up, the broadcasters were free to add
the salt and pepper themselves.”
HBS introduced a new feed for the 2006 tournament, the extended stadium feed, and also
extended the team feeds to show key players and coaches, separate from the bench feed. The
EBIF feed, available to all broadcasters, also contained a wealth of special background
features.
And this was the World Cup where viewing was no longer limited to traditional TV. New
media was mainstream and viewers had more choice of viewing windows than ever before. In
2002, online streaming was limited to Fifa’s website. In 2006 around 50 companies
took up the new media rights for mobile and broadband, providing coverage complementary to
TV.
A NEW KIND OF SERVER
Right at the heart of the production at the IBC in Munich was a new 50Tb media server,
capable of storing all 1,600 hours of tournament action. Host Broadcast Services worked
closely with broadcast equipment company EVS to develop the media server for the 2006
World Cup. It was, according to many of the broadcasters, not only the innovation of the
tournament but of the last few years.
“There is no more important technical innovation in recent years than the media
server. The concept and execution were right and it was exciting to see it work for the
World Cup,” said Ken Aargard, senior vice president of operations & production
services for ËS network CBS Sports. Aargard was based in the IBC working on ABC and ESPN’s
World Cup coverage. He said the server was particularly adept for “making multiple
layers of the event - goals, yellow cards, sendings off -visible from all angles
immediately.”
This is possible because the server recorded eight feeds (BIF, CIF, Clip compilation,
Tactical, Player A, Player B, Team A, Team B) of three hours for all 64 games of the World
Cup as well as all the features on the teams, cities and stadia. All of the content was
logged in detail and available to broadcasters for the entire tournament. Broadcasters
could also exchange media with each other via the server.
The server thus enabled broadcasters to flesh out their programming by accessing all
archived content, which for the first time was tapeless and fully indexed for browsing and
retrieval. The server also offered a 'near live' clips compilation service containing the
best action from isolated replay feeds available for editing as little as 10 minutes after
taking place.
Nicolas Bourdon, EVS marketing manager, said the server allowed editors to input a
combination of search criteria like “Zidane, penalty” or “Beckham, corner”
and, from the list of available clips, view a low-resolution version. They could mark in
and out points with a time code and so begin to build an analysis or highlights package
while the game was still in progress. Because it was instantaneous it has revolutionised
post-production. It means post-production executives can have their wrap-shows prepared
before the end of the match.
Bourdon said that EVS and HBS wanted to provide the complete media management solution for
broadcasters and “to have used the server at the 2006 World Cup means its impact on
the market will be enormous. It has been tested and accepted by the market on the world’s
biggest stage. Initially broadcasters were hesitant, worried even, about the complexity
and the tapeless production. Now they are not.” EVS is already using media server
technology out and about for its coverage of the Tour de France.
As for taking the technology forward, Bourdon points to the use of HDTV. While all matches
were produced in HD for the 2006 World Cup, the media server and all IBC operations were
in Standard Definition, which remains the industry standard. “For 2006, the
introduction of the server was breaking new ground. Once the market adopts HD en masse,
the logical forward step for the server will be HD and by World Cup 2010 a totally HD
solution should be possible.”
OTHER INNOVATIONS
The 2006 FIFA World Cup also saw HBS raise the bar for new media production. For the first
time ever, HBS produced a tailor-made unilateral feed for new media broadcasters,
integrating the new media production into its broadcast service.
The HDTV feed from all venues was delivered direct to the new media unit at the IBC, where
a dedicated new media package was produced so that licencees had no need to edit it
extensively. Innovations such as “pan and scan” technology originally developed
to reduce movies to the smaller format TV screen were used to allow editors to zoom in and
capture key action such as one player, or a goal, producing a picture that was much more
dramatic and relevant for mobile sized screens. The fact the original picture is in HDTV
ensured the quality.
Infront’s vice president of new media Matthias Ziehl said the World Cup 2006
production has created a legacy for future events. "New Media" clients need a
different service from broadcasters, with more servicing and post-production to produce
near-live clips. The 2006 World Cup produced a lot of new ideas that were taken up by a
lot of service providers, which helps progress new industry standards. We have set a new
benchmark for ourselves. By 2010 the service will be even more integrated and between now
and then the industry needs to see if there will be any need for separation.”
LETS GO OUTSIDE
Another broadcasting breakthrough for the 2006 World Cup was the boom in public viewing on
giant screens, across Germany itself and many other countries as far afield as South Korea
and Brazil. One lesson which should definitely be learned for future events is how
big-screen screen technology can engage more and more people.
During the tournament an unprecedented 18 million people watched the games on giant
Philips screens located in the 12 German host cities. This incredible audience, believed
to be a world sports record, represents one fifth of the entire German population and over
five times the total number of stadium attendees for the entire tournament.
The largest Fan Fests were for the Germany v Italy semi-final on July 4, which attracted
over one million people to the Brandenburg Gate event in Berlin, Germany’s 3rd place
play-off victory and the final itself between France and Italy, which both attracted over
one million viewers.
Andy Knee, head of sponsorship for Philips Fan Fest viewings, said, “with record
numbers at the Fan Fests they made a massive contribution to the success of the World Cup
and by all immediate accounts may change the nature of such public viewings for the
future, allowing fans to experience the full excitement of the games and organisers
realise the potential of high quality public screenings.”
Projecting forward to the 2010 World Cup Knee said that big screen public viewing would be
a must for South Africa itself and beyond the host nation. “For the host it is part
of the responsibility of hosting the event. So many people now enjoy sports tourism,
basing holidays around big events. During the course of this World Cup big screenings have
become a fundamental part of the event.” But, he says, the success of out-of-home
viewing has highlighted the challenge for the broadcast industry in providing audience
data that accurately reflects not only people in front of their home screens, but also the
thousands watching the games in public places including not only the big town squares, but
also in pubs, restaurants and in the street.
Critical to the success of the big screens was having an active media partner. In Germany
commercial broadcaster RTL and local radio stations helped to create an all-day event,
building the Fan-Fests into their World Cup programming and hosting programmes from the
fan fest at Brandenburg Gate for example.
THE PERFECT HOST
As a virtually unique dedicated, specialised host broadcaster that can move anywhere in
the world, Host Broadcast Services has moved on the role and shape of host broadcasting.
Next stop for HBS is the Doha Asian Games in December 2006. Many in the broadcasting
industry now argue that the bar has been raised, particularly by this World Cup and that a
single purpose company with a unique of knowledge and experience to carry forward is the
only way forward for any big event. Gone are the days of the domestic host broadcaster.
HBS designed, built, installed and managed the International Broadcast Centre and the
facilities at the stadiums. It filmed, transmitted the signal, provided unilateral
production, transmission and commentary facilities and services, liaised constantly with
all the World Cup broadcast partners and brought its big event focus to bear in order to
bring the interests of all broadcasters and viewers worldwide into a broadcast community.
The success of HBS has lead many to question the role of domestic host broadcasters for
the bigger events. As one broadcaster put it, “for Wimbledon fine, for the US Open
Golf, sure. A domestic host broadcaster can cope. But for the big events of the magnitude
of a World Cup, a European Championship, an Olympic Games, hiring one central specialised
company is a must. It allows each individual broadcaster to gain such a lot. If each
company does it for themselves you only get what they are able to deliver with their
resources and in an increasingly multi-channel world that is a real challenge for
production.”
AFRICAN HORIZON
With the 2010 World Cup coming to Africa, the role of Leading Independent Media (LiM) in
ensuring the widespread broadcast of the 2006 event in Sub Saharan Africa has been
critical.
Contracted by Infront to agree broadcast deals with key national free-to-air broadcasters
42 territories of Sub-Saharan Africa (excluding South Africa) LiM’s brief was to
maximise exposure of the 2006 World Cup and other Fifa events in the continent.
LiM delivered. Seventeen African broadcasters actually came to the tournament. In the
past, interest in attending often came only from those countries directly involved. Ghana
and the Ivory Coast broadcaster had never been to a World Cup.
Broadcasters did not paid LiM for the rights, but LiM attached its own sponsorships to the
deals, so the production costs were covered. LiM took the HBS feed and tailored it for its
audience, putting commentary in French, English or Portuguese.
SHANGHAI ONLINE
Shanghai Media Broadband, a subsidiary of the Shangahi Media Group acquired the exclusive
Internet and mobile rights for the 2006 World Cup in China. SMG’s Liu Yong said,
“ Since it is the first time that Fifa has exploited its new media rights, this World
Cup was a big challenge for us. It was also the first time we were part of the
International Broadcast Centre, setting up a studio and production area.”
SMGBB set up a 24-hour channel on www.smgbb.cn for the duration of the World Cup and
produced a live show at its IBC studio during matches with live commentary, plus near live
match video and around-match news and features.
2006 FIFA WORLD CUP BROADCAST FACTS & FIGURES
Stadiums: 12
IBC area Munich: 30,000m
Hours of Programming: 2,200 hours
Number of cameras: 170
HD Cameras: 25 HD including 6 Super-slo HD
Staff HBS: 2,000
Broadcast Partners: over 500
Broadcast Partners accreditations: 10,000
Staff broadcasters: around10, 000
Media Server Members
ARD, Germany
TV Azteca, Mexico
BBC, UK
TV Globo, Brazil
ITV, UK
KBS, Korea
NAB – TV Tokyo Corporation, Japan
JC/NHK, Japan
SKY Italia, Italy
SRG SSR, Switzerland
Soccer United Marketing, USA
Televisa, Mexico
La Sexta, Spain
Univision, USA |
Sporting Goods Business
July, 2006
Brand Boosters
By Emily Walzer
Rocketfish launches performance products that help brands achieve lift-off.
It sounds so easy. Spend the afternoon playing outdoors and dream up some stylish
sunglasses. Or maybe go for a long morning bike ride and come back with an idea for a cool
new backpack. But in today’s enormously competitive athletic market, there is no
place for mediocre product. For a brand to even exist in the active arena these days, the
product design has to be a standout performer in a crowded field of established winners.
And that’s not so easy.
Rocketfish Design Studio has worked with more than 30 top name brands over the last five
years to help separate those labels from the pack. Along the way, the nascent firm has
helped create a roster full of notable products in the general athletic, action sports and
outdoor industries. From footwear to eyewear, and everything in between, Rocketfish has
crafted clients’ brand identity with aesthetically on-target performance gear.
For instance, Rocketfish designed the majority of the early Gravis collection, giving rise
to a new footwear aesthetic that combined boardsport lifestyle and athletic functionality.
The studio also designed the flashy Puma baseball cleats worn by Johnny Damon during the
Red Sox’ World Series win in 2004. In addition to shoes, the Rocketfish team is
responsible for some of the best-selling Nike eyewear models, as well as Burton’s
popular Day Hiker backpack series.
TJ Gray and Ashley Brown are the principals of Rocketfish. The two industrial designers,
who share a passion for surfing, have set up shop in Portsmouth, NH. While not exactly a
surf Mecca, the Eastern seaboard provides the duo with plenty of opportunity to play on
bikes, in the water, and in the woods. Not the norm for most industrial designers, but
certainly a contributing factor behind Rocketfish’s success.
Working with today’s top performance brands requires more than play time, however.
According to Gray and Brown, who are both ex-Nike staffers and accomplished athletes, the
process of designing for brands is multi-faceted. Tasks range from meeting with focus
groups, interviewing pro athletes and sifting through pages of corporate marketing briefs
to tracking trends at trade shows, researching on the Web and taking design cues from
various consumer products industries.
“These days, it seems harder for most companies to make a name and harder to hold
onto it,” says Gray, a decathlete who studied industrial design at Syracuse
University. “And it’s hard to stay on top and follow up on your first hit.”
But on the flip side, Brown points out that in this intense information age, brand
juggernauts are also possible. “In just the last decade, during our professional
careers, it seems so much easier for a brand to come onto the market and just explode,”
says Brown, a Southern California native who studied at the Art Center School of Design in
CA. “With the Internet, blogs, and instant access to media, it seems that brands like
Under Armour and Keen just take off overnight and companies go vertical with their sales.”
Since establishing Rocketfish in 1999, Gray, 37, and Brown, 34, have worked with a mix of
small start-ups and big brands. As their business has grown, the studio staff has expanded
to include two more designers. “We’ve helped some of the smaller companies build
their entire brand from beginning to end—everything from developing logos to creating
the line,” explains Gray, who mentions client Kaenon Eyewear as an example.
“Other times we’ll work with big, established [companies] looking to extend
their brands or that want a fresh perspective,” comments Brown, who rode with Nike’s
cycling team. “They’ll want to stay within their corporate design but want a new
take on it, so they’ll come outside to us.” Such was the case with when
Rocketfish worked with DC Shoes.
The biggest chunk of Rocketfish’s work is footwear-related, accounting for about 60
percent of its overall business. The remaining 40 percent is divided among bags, eyewear,
apparel and graphics. The company also designs hardgoods and is looking to build this
category.
Just recently, for instance, Rocketfish worked with Brine on a new lacrosse stick head.
“That was fun,” says Brown. “We’ve done lot of sports personally, and
have done other work for Brine, but never lacrosse.”
Nonetheless, the designers dove into the project. “They wanted outside-the-box type
thinking. It was clear we never had played lacrosse and they welcomed that,” notes
Gray. “They wanted us to approach the design without being restrained.”
Brown and Gray agree that Brine is doing a skillful job of updating its image to better
fit today’s market. “Their look is lot more edgy, from products to even their
Web site,” says Gray. “They are creating more of an in-your-face image. And it’s
helping them appeal to young athletes.”
Staying relevant is an important aspect of successful branding, but there are other key
factors as well, according to the designers. What differentiates a strong brand from a
weak one has a lot to do with focus.
“The stronger brands have a true focus on where they want to be, or where they are
going,” suggests Gray. “Stronger brands have a clear direction. And that doesn’t
necessarily mean that they are older and more established.”
He cites Nixon as being a clearly focused brand from the get-go. The company, now 8 years
old, recognized a niche for watches specific to the action sports market. “The idea
was clear internally, and clearly explained to consumers,” states Gray, who mentions
that Rocketfish also did a bag line for Nixon. “They did great product, stuck with
their idea, and have done really well.” Indeed, Nixon was recently purchased by
Billabong.
But increasingly, marketing plays a role, too.
“Very seldom do we just work with the design group. Marketing is always involved
nowadays,” says Brown. The majority of the time, Rocketfish is in contact with the
marketing side of a business and may also be involved in promotional pieces in addition to
product design.
Yet, as critical as the functional properties of the product may be, and as important as
the spin factor of promoting the new gear is (whether in launching or extending a brand),
the product has to have eye appeal. “The best aesthetics can really help drive a
brand,” Brown explains. “It shows that there is a real purpose to the design and
that the product will help constitute a design language that [the company] will continue
to build off of for years to come.”
And it’s here that Rocketfish defines itself. With its athletic background and design
versatility, the studio is building a reputation for being able to find the ideal blend of
feel-good functionality and good-looking aesthetics. The result is popular new product
that moves off the retail shelf.
A recent product launch for Prince footwear touched on all aspects of the design process,
from the creative to the corporate. According to Brown and Gray, Prince approached
Rocketfish in 2005 when the tennis company was looking to update its performance shoes.
While Prince had a successful technical racquet story, the footwear did not have a similar
edge.
“They were doing performance, but needed a fresh, more aggressive look. They wanted a
shoe technology that had the tech and aesthetic that their racquets had,” Brown
recalls.
For starters, to better understand the market, Gray and Brown traveled to Florida to meet
with participants at the Nick Bollettieri Tennis Center. The Rocketfish duo immersed
themselves in the tennis scene, talking with kids, meeting the pros and working with the
Prince sales team.
This type of involvement is not uncommon for Rocketfish. Often, the firm is called to
interact with a focus group or an outside consultant to get a consumer perspective of the
brand. Pro athletes are another useful resource for Rocketfish. “We work with pros in
a number of different accounts,” comments Gray. “While sometimes they have a
hard time articulating exactly what want—beyond talking about competitors’
products and what they like about them—it’s always interesting to hear from the
pros first-hand.”
The next step in development involves learning the performance specifics required in the
product. Whether that’s a certain type of forefoot support for a shoe, or the
ergonomics of a lacrosse stick head, the technical requirements take shape.
Meanwhile, research is conducted in various ways, ranging from hard-core data to casual
observations about what’s being worn on the street. In addition to trend-watching in
the active marketplace, the designers keep up to date with other industries for design
cues. “We look to the automotive and architecture communities, for instance, for
ideas on materials and aesthetics,” Brown says. “We’ll also follow fashion,
entertainment and other areas to see what trend is emerging.”
With all of these factors starting to blend, Rocketfish designers will begin to give a
visual presence to the all of the verbal briefs and research.
“From there on out, it is back and forth with the client,” says Gray. “We’ll
submit sketches and then start building the product.”
Such was the process with Prince, which led to the launch of the T10 tennis shoe in Fall
’05. The shoe is now one of the company’s best selling new models, and this
success encouraged Prince to go forward with an expanded collection. Rocketfish was hired
to develop a Spring ’06 shoe, the M Series, and will continue to evolve the line.
The Prince account, like other Rocketfish clients, benefits from the studio’s
well-rounded expertise. “We get into every detail, if that’s what needed, from
the mechanicals and the specs to graphics on promotional pieces. And a lot of companies
don’t have that,” says Gray. “We can offer a full package.”
Brown and Gray also state that unlike designers who specialize in a particular sector, the
team at Rocketfish has diverse athletic and design backgrounds to draw upon. The firm can
bounce from lacrosse to volleyball and then hit the courts or the slopes with shoes,
accessories or bags.
“There are designers who have a consumer electronics or medical background and think
that it would be fun to get into sporting goods design. They work as individuals and sit
in front of a computer most of the time and then try to come up with an athletic shoe,”
Gray comments. “You are what you eat, you do what you design. Both Ash and I are avid
outdoor guys and realize the significant impact that good design has on enjoying what you’re
doing.”
CAPTIONS:
Rocketfish successes start with design sketches at various stages of product development.
Rocketfish principals TJ Gray (foreground) and Ashley Brown in their Portsmouth, NH,
design studio.
Ashley Brown’s time on the bike often leads to ideas on product performance. |
Sporting Goods Business
July, 2006
Brand Power
Strength and endurance are two of the most valuable traits an athlete can have. The same
is true of athletic brands. Our fifth annual brand awareness study reveals the athletic
manufacturers who combine muscle with might to race ahead of the pack in consumer
awareness.
But what constitutes brand strength in the consumer’s eye? Why are certain brands
able to endure in people’s minds long after they cease being relevant at retail? What
brands do consumers know, and what do they really think of them?
According to our study, the three most recognized athletic brands are Adidas, Nike and
Reebok. When product quality and awareness are combined, Nike dominated all other brands
among respondents. Also of note: nine of the 20 most recognized brands are best known for
their footwear products.
As in years past, there are surprises on the list. A few brands that lost their edge years
ago still rate high in awareness thanks to the strong brand imagery associated with their
names.
The study focuses on consumer recognition and perception of top sports brands. This year,
we have also included a special section devoted specifically to “youth brand
awareness.” These statistics reveal that kids between the ages of 10 and 15 have a
different perception of brand strength and coolness than their older counterparts. Part II
of the study, which covers consumers’ perceptions of retailers, will run this fall.
Who’s got the most muscle? Turn the page to find out.
THE SGB 50
The most widely recognized sports brands among Americans 10 to 65 years old.
RANKING/COMPANY NAME/PERCENTAGE
1./Adidas/97.5
2./Nike/96
3./Reebok/95.6
4./Converse/90
5./New Balance/89
6./Speedo/88.1
7./Puma/88
8./Spalding/86.4
9./LA Gear/82.4
10./Champion/79.9
11./Schwinn/79.4
12./Swiss Army/78.4
13./Timberland/77.8
14./Wilson/77.6
15./K-Swiss/76.4
16./Skechers/76.3
17./Rawlings/74.8
18./Nautilus/72.9
19./Columbia Sportswear/71.7
20./Danskin/70.9
21./Coleman/69.4
22./Russell Athletic/69.1
23./Birkenstock/68.9
24./JanSport/68.8
25./Ocean Pacific/68.7
26./Fila/68.6
27./Oakley/68.4
28./Huffy/67.6
29./Avia/65.2
30./Asics/64.8
31./Everlast/64.5
32./Louisville Slugger/63.8
33./Jantzen/63.5
34./Body Glove/61.7
35./Dunlop/60.1
36./The North Face/57.6
37./Vans/56.1
38./Saucony/52.2
39./Etonic/51.9
40./Riddell/50.6
40./Bushnell/50.6
42./Quiksilver/49.1
43./Callaway Golf/48.9
44./Pony/47.6
45./Head/46.7
46./Rollerblade/46.2
47./Wolverine/44.5
48./Woolrich/44.3
49./Starter/43.3
50./Umbro/43
BRAND POWER RATINGS
Respondents were asked to rate their perceptions of the quality of the products offered by
Adidas, Reebok, Nike, Puma, Spalding, LA Gear, Converse, Rawlings, Wilson, Swiss Army,
Timberland, New Balance, Champion, Dunlop, Skechers, Nautilus, Russell, Everlast, Ocean
Pacific, The North Face, and Under Armour.
Respondents were instructed to base their perceptions on personal experience or anything
that they may have heard about the quality of the products. Since many of the brands offer
a variety of specific products (footwear, apparel, etc.), respondents were also directed
to base their answers on their overall perceptions of the quality associated with the
products offered by the brands.
A five point scale was used, where a “5” meant extremely high quality and a
“1” meant extremely poor quality.
The Brand Power Rating (BPR) incorporates two dimensions: awareness and perceptions of
quality. The BPR is derived using a simple mathematical calculation of awareness level
multiplied by the mean quality rating. Therefore, a perfect BPR would be 500.
The following chart displays the Brand Power Rating for some of the most-well known and
relevant brands.
Awareness /Mean Quality /Brand Power
Brand/Level/Rating/Rating
Nike/96%/4.1/398
Adidas/97.5%/3.9/376
New Balance/89%/4/353
Reebok/95.6%/3.6/347
Swiss Army/78.4%/4.1/320
Timberland/77.8%/4/311
Puma/88%/3.5/304
Spalding/86.4%/3.4/294
Converse/90%/3.2/289
Champion/79.9%/3.5/277
Wilson/77.6%/3.5/275
Nautilus/72.9%/3.7/273
Rawlings/74.8%/3.5/263
Skechers/76.3%/3.2/247
The North Face/57.6%/4.2/241
Russell Athletic/69.1%/3.4/232
Ocean Pacific/68.7%/3.3/229
LA Gear/82.4%/2.7/226
Everlast/64.5%/3.4/220
Dunlop/60.1%/3.3/198
Under Armour/42.7%/4/172
Understanding people’s perceptions
Which three brands are for people your age?
Brand/16-24/25-34/35-44/45-54/55-65
Nike/71.6%/Nike/77.3%/Nike/73.6%/Nike/66.4%/Nike/61.3%
Adidas/63.8%/Adidas/44.4%/Adidas/41.7%/Adidas/32.9%/Adidas/34.1%
New Balance/21.9%/Reebok/25.8%/Reebok/32.5%/Reebok/24%/Reebok/22.7%
Reebok/19.2%/New Balance/20%/New Balance/13%/New Balance/18.2%/New Balance/15.8%
Puma/12.9%/Under Armour/7.2%/Wilson/6.4%/Champion/6%/Wilson/11.7%
The North Face/9.1%/Puma/7%/Champion/5.5%/Columbia /5.1%/Titleist/6.1%
Champion/5.2%/The North Face/5.6%/The North Face/3.8%/Wilson/11.7%/TaylorMade/6.1%
Which three brands are for serious athletes?
Nike/53.6%
Adidas/23.6%
Reebok/16.3%
New Balance/9.8%
Under Armour/8.2%
Asics/4.5%
The North Face/4.1%
Wilson/4.1%
Callaway Golf/3.5%
Saucony/3.4%
Which three brands provide value for the money?
Nike/42.5%
Adidas/25.1%
Reebok/21.6%
New Balance/17.1%
Wilson/7.9%
Champion/7.6%
Columbia/5%
Converse/4.7%
REI/3.7%
Asics/3.6%
Puma/3.6%
Which three brands are worth spending money on?
Nike/38.5%
Reebok/18.8%
Adidas/17.2%
Puma/7.7%
Converse/5.5%
Skechers/5.3%
K-Swiss/4.3%
Wilson/3.9%
Under Armour/3.9%
New Balance/3.7%
Youth Brand Awareness
Evaluating brand awareness among 10- to 15-year-olds.
Top 10 most recognized brands among youth respondents.
Adidas/95.4%
Reebok/93.6%
Nike/93.6%
Puma/81.9%
Skechers/79.1%
Speedo/77.6%
New Balance/77.3%
Converse/77.3%
Spalding/73.9%
LA Gear/71.8%
Sneaker or athletic shoe brands most popular among respondents and their friends.
Nike/51.1%
Vans/8%
Adidas/6.8%
Skechers/6.5%
Converse/4.6%
Etnies/3.4%
K-Swiss/3.1%
Reebok/2.5%
New Balance/1.9%
And 1/1.2%
DC Shoes/1.2%
Sneaker or athletic shoe brands respondents would not want to be seen wearing at school.
*Store Brand/13.1%
Converse/6.7%
Skechers/6.1%
Nike/6.1%
Keds/5.1%
New Balance/3.8%
Puma/3.2%
Vans/2.9%
Asics/2.5%
Reebok/2.2%
*Top store brands mentioned were Wal-Mart, Kmart and Payless.
Respondent Profile
Male: 43.7%
Female: 56.3%
Mean Age: 43.1
Mean Annual Spending on Sports & Recreation: $649
Median Household Income: $76,508
Editor’s Note: Because the study was conducted over the Internet, the sample skews
older, whiter and more affluent than the U.S. population.
How the Study was Conducted
The SGB Brand Awareness/Retailer Assessment Study was conducted in April 2006 among a
nationwide sample of Americans between the ages of 16 and 65. An additional 326 surveys
were completed by young people between the ages of 10 and 15. Youth responses were also
collected in April 2006 from a nationwide sample of Americans.
Potential respondents were sourced from lists of Americans who had self-classified
themselves as being active or having an interest in sports. The study was conducted via
the Internet. Potential respondents were e-mailed an invitation that directed them to a
self-administered Web-based questionnaire. All respondents were informed that completion
of the study would enter them into a random prize drawing that included cash awards.
In total, 1,238 adults between the ages of 16 and 65 participated in the survey. Total
results from this study can be projected to the U.S. population of Internet users who are
active or interested in sports with a margin of error of +/-2.8 percent. |
Sporting Goods Business
July, 2006
eBay Branches Out
By Cara Griffin
A new specialty site, Express, targets a broader audience.
Statistics paint a pretty clear picture of how big of a player eBay is in the sporting
goods retail landscape. Long an online leader in golf sales, eBay has grown into a
mega-seller of hunting, fishing, bike and exercise equipment, as well. In fact, eBay’s
annual sales in the sports category are $2.3 billion.
To break the U.S. sales numbers down even further: a sporting goods item is sold every two
seconds on eBay.com and more than 4,200 golf clubs are sold every day on the site. The top
five search terms in the sporting goods category on eBay are Callaway, Browning, Shimano,
Nike and Cannondale.
While much of the sales volume is comprised of used products sold in an auction format,
eBay’s newly launched specialty site, called eBay Express, aims to widen the company’s
reach via fixed-price sales, which will incorporate more new, unused items. Express is
designed to attract shoppers looking for a convenience-oriented buying experience outside
of the auction-style format.
eBay execs are also intent on being a part of the industry and not an adversary. Brian
Madigan, category manager for sporting goods at eBay, discusses the new Express site with
SGB, as well as his views on how eBay is trying to work as an industry ally to grow
overall sales.
“If we can help grow the sporting goods market through liquidation or trade-ins, that’s
our goal,” says Madigan. “I’d like to see the industry as a whole grow
faster than 2 percent, so whatever we can do to generate growth that is beneficial to the
overall industry is what I’m hoping to do.”
SGB: How did eBay Express come about, and how does it differ from eBay’s standard
auction site?
MADIGAN: Express launched at the end of April, and we have received some really positive
feedback from our community. We are still in the preview phase. This is allowing us to
take the feedback from the community and make improvements and make sure that we’ve
created an absolutely wonderful experience for both our sellers and our buyers. Express
came out of the idea that a lot of U.S. shoppers are looking for a convenient and easy way
to shop for items. In sporting goods, for example, people want to see what’s new,
what’s in season, and they want to buy it now, they don’t want to wait for the
auction. So they are willing to purchase and put stuff into their carts. One of the
benefits of Express is that we have implemented a shopping cart, so instead of going to an
auction and purchasing a club, [customers] can put a pack of balls in their shopping cart
and get everything they need for a round of golf, or to build a bike, or to go hunting or
fishing for the weekend. So this is a wonderful advantage. There are a lot of different
shoppers out there. Some love the excitement of the auction and some people just want
something immediately and that’s what Express provides them. It’s also a lot
easier from a browsing standpoint because it’s a much more visual experience.
SGB: What are the benefits for sporting goods retailers to become sellers with eBay
Express?
MADIGAN: We do have a lot of large retailers that are sellers. The benefit is that it
enables them to liquidate a lot of product as the season winds down. For example, right
now we see a lot of ski and snowboard stuff coming on the site. As the season ends,
retailers want to sell their new, but out-of-season, overstock. This Express site gives
them access to 193 million users, and they are able to liquidate this stuff quickly with
no inventory costs. A lot of retailers have been doing trade-ins, taking used golf clubs,
for example. Someone comes into their store and purchases a new one, [while the retailer]
can sell the used trade-in club on eBay. It increases their retail sales. It allows them
to provide a discount on the newly purchased club, and re-sell that used club on eBay. We
are working with a lot of sellers to use our market research tool to understand what the
going rate of a used club is, so they can correctly price the used clubs, and offer
consumers a discount for the trade-in. We have seen a lot of success in the golf category,
and we are seeing it take hold in cycling as well as in hunting and fishing.
SGB: What types of market research does eBay offer?
MADIGAN: We have a market research tool that is available for anybody to purchase. It
tracks research for the last 90 days of completed items and provides aggregated metrics on
items so people can really understand what the trends are, and what’s happening
seasonally or around events. One example is The Masters. Every year around The Masters,
sales in the golf category take off. With the market research we have available, you can
see these spikes, measure seasonality, and see what drives sales. It’s valuable
internally for us to understand when categories are going to take off, and it is valuable
for our sellers to know when it is the appropriate time to put merchandise up on the site.
It is also good for brands and manufacturers to see how popular an item is on eBay.
SGB: What are the leading products in eBay’s sporting goods category?
MADIGAN: We have a broad merchandise mix, but the top category would be golf—our
flagship category. Cycling is our second-biggest category and is growing rapidly. Next is
outdoor sports, which for us is [led by] hunting and fishing. Exercise and fitness is also
taking off as customers become more comfortable with purchasing larger items online. With
equipment such as treadmills, the discount is there on eBay and the customers are
confident they will get what they want, when they want it. Overall on eBay, higher-priced
items sell better. It is more advantageous for the seller, who can offer a discount and
still get solid margins.
SGB: What type of relationship does eBay have with sporting goods retailers and vendors?
MADIGAN: We do have some manufacturers who sell [direct] on the site. Callaway pre-owned
is a good example. They started on eBay and were purchased by Callaway. They sell a lot of
product on eBay. You will also see retailers liquidating new in- and out-of season stuff,
as well as trying to spur business with trade-ins. Our trade-in business has been wildly
successful in golf and it is catching on in other areas. Right now, we are working closely
to keep good relationships with both manufacturers and retailers. We try to do our best to
help grow the industry as a whole. Sporting goods has been rather flat the past five
years. We are taking part and participating in industry events to really help expand the
market of sporting goods as a whole. We are trying to be a part of the industry
organizations and provide information and data and advice and ideas on how we can expand
the market and improve manufacturer and retail sales because at the end of the day, the
growth in the overall market is going to help eBay.
SGB: What measures does eBay take to counteract the problem of counterfeit and stolen
items being put up for sale on the site?
MADIGAN: That is a huge problem within the industry. It is not specific to eBay, but as a
participant in the industry, we want to minimize the number of counterfeits in the
industry as a whole, and especially on eBay. We have a program [in which] all
manufacturers have access to our site, and if they identify something that may be
counterfeit, we pull that down. We have wonderful relationships with law enforcement, as
well. The last thing I want is for a buyer to have a horrible experience, because that
buyer won’t come back, so we work as closely as we can with the industry to combat
this. |
Sporting Goods Business
July, 2006
Nike Teams Up With Apple On Wireless Training Device
By Thomas J. Ryan
The Swoosh has joined the iPod craze. Nike Inc. and Apple Computer Inc. have partnered to
create a wireless device that tracks a runner’s performance and helps choreograph
songs to a workout through an iPod.
The Nike+ Air Zoom Moire is the first shoe designed to work with the system, though other
styles will eventually work with the device. Users will have to buy a wireless Nike+iPod
Sport Kit, which includes an in-shoe sensor and a receiver that attaches to an iPod.
As part of its comprehensive Nike+ initiative, the company also launched the nikeplus.com
training-log Web site, a new Nike Sport Music section on the iTunes Music Store, and will
roll out a collection of apparel and accessories designed for the iPod Nano and Nike+iPod
Sport Kit.
“Nike+iPod is a partnership between two iconic, global brands with a shared passion
for creating meaningful consumer product experiences through design and innovation,”
says Nike CEO Mark Parker. “This is the first result, and Nike+iPod will change the
way people run. We see many more such Nike+ innovations in the future.”
“We’re working with Nike to take music and sport to a new level,” adds
Apple CEO Steve Jobs. “The result is like having a personal coach or training partner
motivating you every step of your workout.”
When the shoe is connected to an iPod Nano through the Nike+iPod Sport Kit, information on
time, distance, calories burned and pace is stored on the iPod and displayed on-screen.
Real-time audible feedback also is provided through headphones.
After a workout, connecting the iPod Nano to a Mac or PC—with the help of iTunes—will
automatically sync and store workout data in a customized workout log on nikeplus.com.
Users then will be able to view and evaluate personal training goals as well as data on
distance, time, pace and calories burned.
The new Nike Sport Music section of the iTunes Music Store will offer general music for
workouts, along with special coaching mixes with music and voiceover instruction from such
athletes as marathon legend Alberto Salazar, and playlists and audio commentary from
athletes including Lance Armstrong. The section will also include podcasts by Nike, Sport
iMix playlists created and posted by iTunes users, and a special workout mix created by
Grammy award nominee The Crystal Method.
In addition, a PowerSong feature enables a user to briefly hold the center button on the
iPod to activate a pre-selected song to help “kick a workout to the next level.”
Nike is also introducing a range of performance apparel and accessories—including
jackets, tops, shorts and armband—designed for the iPod Nano and Nike+iPod Sport Kit.
The Air Zoom Moire (SRP $100) will be available beginning in mid-July in the U.S. This
Fall, Nike will launch six other styles that will be Nike+ ready: the Air Zoom Plus, Air
Max Moto, Nike Shox Turbo OH, Air Max 180, Nike Shox Navina and Air Max 90. The retail
price for the Nike+iPod Sport Kit is $29.
CAPTIONS:
The Nike+iPod automatically syncs and stores workout data in a customized workout log on
nikeplus.com.
From left: Apple CEO Steve Jobs and Nike CEO Mark Parker unveiled Nike+iPod at an event in
New York attended by marathon world record-holder Paula Radcliffe and seven-time Tour de
France winner Lance Armstrong. |
Sporting Goods Business
July, 2006
Wall Street Review: Nike+iPod
By Thomas J. Ryan
Is the new alliance between Apple and Nike a performance breakthrough or just a brilliant
marketing scheme?
Wall Street analysts agree that the launch of Nike+iPod was a clever marketing response to
the launch of the Adidas1 computerized shoe. But many industry experts contacted by SGB
had reservations about its potential as a breakthrough item.
“It seems more of a brand marketing thing,” says J.P. Morgan’s Robert
Samuels. ”Obviously, it will attract some people to buy a pair of Nikes but probably
not the elite runner. They’ll probably stick with running brands like Saucony, New
Balance and Asics.”
Samuels also notes that active consumers may be unfazed by the innovation since many gym
machines already provide readings on pace, distance, calories burned and other data.
“Some may buy them, but I don’t think it will be a huge deal,” he says.
The most bullish was Banc of America’s Robby Ohmes, who indicates that there are
already 8 million Nano users, and that forecasts call for between 17 million and 18
million users by the end of 2006. “If just 20 percent want to try the technology,
that’s about 4 million pairs. So if Nike makes at least 50 percent off retail, that’s
$200 million in sales in just one year,” Ohmes calculates.
Ohmes believes this might help Nike generate interest among elite runners who typically
buy brands such as Asics and Brooks. It should also support Nike’s women’s
business because the Nano skews toward female users. Looking further ahead, Ohmes notes
that the initial launch “kept the technology pretty simple,” and further
advancements, such as measuring heart rate and incorporating the technology into gear and
apparel, should lead to more growth opportunities. Also boding well for the partnership is
that Apple has had successful partnerships with Bose and BMW, and Tim Cook, COO of Apple,
joined Nike’s board last November.
“This is more about how big the iPod has become and how Nike can really leverage
that,” says Ohmes.
Susquehanna Financial Group’s John Shanley contends that Nike+iPod clearly helps Nike
gain back some of its reputation for cutting-edge technology. “They lost a bit of the
edge with the launch of Adidas1,” says Shanley. “So this just puts them back
into the game in terms of having a technological advantage.”
But Shanley believes potential sales of the Nike+iPod are limited because it targets the
elite runner, and more than 90 percent of sneaker buyers don’t use the shoes for
athletic purposes. “It’s targeting a very distinct part of the business,”
he notes.
Another analyst, who requested anonymity, suggests that serious runners will be more
likely to turn to more accurate training devices using GPS technology from vendors such as
Garmin, rather than relying on the less precise Nike+iPod which works off of a pedometer.
He also notes that most elite runners don’t run to music.
“What I’ve heard from some serious runners is that music screws with your heart
rate and overall performance,” reports the analyst.
On the upside, however, the analyst notes that Nike did manage to bring something new to
the marketplace. “As much as anything, we’ve got something new here, so
retailers have something different and something fresh in their store,” he says. |
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