WSC 226 Dec 05

The current spat between the football authorities, Sky and the European Commission may be little more than a sideshow to the most significant media  business event of 2005 – BSkyB’s acquisition of the broadband internet provider Easynet for £211 million, part of a major drive to acquire new media interests around the world. As the EC worries about Murdoch’s monopolistic grip on English football, his henchmen are gaining a stranglehold over what many experts predict to be the future of sports broadcasting – the live coverage of matches over the internet.

Initially the picture quality of coverage over the net varied from, at best, patchy to down right unwatchable. Technological advances in PCs and the availability of super-fast broadband mean that many homes now have the hardware to receive live pictures almost as clear as those on television. The increasing number of websites offering live football is indicative of the growing demand for computer-based entertainment.

News International and other big multinational corporations have seen the financial opportunities in the move towards sport on the internet. The recent renewal of the deal allowing ITV and Sky to broadcast Champions League matches contained a clause giving them the rights to show live web feeds. Sky will charge users of its broadband service a monthly fee to watch the games, while ITV will show them for free. BSkyB’s move for Easynet means that it will be challenging internet service providers such as AOL and BT in a fast-growing marketplace: UK broadband connections already exceed eight million. But it is not just in the UK that Murdoch has been buying up ISPs and web services. In the United States, News Corporation’s Fox Interactive Media has bought online sports company Scout Media, giving it access to 200 local sports sites, 47 publications and more than 200,000 subscribers. FIM has also set about acquiring a wide range of new media, such as myspace.com in the US and realestate.com.au in Australia.

BT’s new broadband-based coverage of the Conference shows that something doesn’t need a huge audience to work commercially on the internet. The web is the ultimate technology for reaching niche markets – football clubs from the lowest point of the pyramid will be able to broadcast their matches for as little as £100 per month. There is no real economic sense to covering sports with such minority appeal on TV, but they are ideally suited to the web, where entry costs are much lower.

Another new technology making live matches available is the TV-over-your-phone-line service, Home Choice. Initially this is open only to residents of parts of London and the south-east of England, but it is expected to expand. It sends programmes and films down the phone line and through a set-top box to your TV. It offers Sky Sports and a multitude of other channels also available via satellite and cable. Even the FA have caught on to the money-spinning opportunities of internet football broadcasts – the new media rights to live England matches are now managed by the multinational Octagon, an arm of the Interpublic Group, the world’s largest advertising and marketing communications conglomerate, who also look after the Premiership rights. Less surprisingly, Chelsea’s broadcasts are handled by Trans World International.

There is, however, one major blight on the horizon for the big multinationals. The speed of technological change makes it increasingly difficult to retain control over the broadcasting of football both over the internet and via satellite television. While the EC is seeking to break the TV monopoly of Sky in the UK, the electronic world looks ungovernable. A quick Google search is enough to find a rapidly growing number of both licensed and unlicensed sites offering live football direct to your PC. A walk through town-centre pubs and bars at 3pm on a Saturday afternoon is likely to offer the opportunity to watch live Premiership games from foreign satellite broadcasts. As the hardware becomes ever simplified, cheaper and more powerful it is going to become less and less possible for football authorities and even governments to keep the lid on what they claim are “illegal” broadcasts.

A recent article in Murdoch’s News of the World claimed that 4,500 pubs around the UK are showing live Premiership matches from foreign broadcasts. Despite continuous threats of a clampdown by Sky, the FA and Fact (Federation Against Copyright Theft), a huge number of bars (particularly in the north of England) continue to show the live feeds. The Premiership have employed a former Flying Squad detective called Ray Hoskin to clamp down on the phenomenon. Although Fact claim to have prosecuted up to 50 publicans, it has still not been proven in court that it is illegal to show the foreign coverage. All the prosecutions so far have come from publicans pleading guilty to “dishonestly receiving a satellite programme”. It is only a matter of time before a bar owner or equipment supplier takes a case to the European Court in Strasbourg, to test laws that are arguably being outpaced by the speed of changing technology.

Of course, the TV deal allows clubs to show their own games on their own premises, giving them a considerable competitive advantage. So Shearer’s Bar, part of the St James’ Park complex, shows Newcastle’s home matches live, even at 3pm on a Saturday, at the same time as the Premier League are taking licensees in the city to court for doing the same.

Fact have now set up an internet investigations department to address the showing of unlicensed online football. They have joined forces with the Internet Enforcement Group (a cross-body industry working group) and the Digital Content Forum (a forum to discuss issues affecting anti-piracy groups) to take the lead against the illegal websites. Finding English pubs showing football is one thing, but tracking down and prosecuting the owners of websites based anywhere around the globe is another and there is little evidence that Fact are having much success.

Although the multinationals seem to regard new media as the latest goldrush, keeping control over broadcasts is going to prove one large headache. In cyberspace, no one can hear the suits scream.

From WSC 226 December 2005. What was happening this month

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