Telstra in box seat for AFL web coverageLucy Battersby and Ben Butler
April 28, 2011
It seems footy on the internet comes much cheaper than on the telly - for now.TELSTRA is likely to be the big winner in a new AFL broadcast rights deal to be announced today, snapping up online rights cheaply just as internet and mobile TV is poised to boom.
While free-to-air television network Seven and pay TV operator Foxtel are together expected to pay more than $1 billion to broadcast football from 2012 until 2016, Telstra has reportedly secured online rights for about $100 million.
The huge price tag has put Ten Network's role in doubt, but analysts say Seven and Foxtel are prepared to wear a razor-thin profit margin because of the ''halo effect'' brought by football broadcasts.
Analysts say the online rights will become more important, especially once the national broadband network brings super high-speed internet into homes and mobile networks are upgraded.
''It is really up to the AFL to decide the terms for contracts and I think we are still a few years away from the position where TV rights shift onto the internet,'' analyst Tim Renowden, of Ovum, said.
''Live streaming rights will become an increasingly important way for fans to watch sport over the next five years and it's possible that the free-to-air broadcasters have missed a trick here.''
Telstra paid $60 million over five years under a deal signed in 2006 that gave it the right to show full match replays, match highlights and club content on mobile phones and the internet.
It will be revealed today if the new deal also gives Telstra exclusive rights to mediums that have emerged since 2006. For example, Telstra had exclusive rights to publish live scores and player statistics online and package quarterly highlights in the last deal. But new applications have since emerged for smart phones that also deliver live scores, such as SportsMate's Footy Live app.
''From what we understand [Telstra] would not be able to have exclusivity over live scores. But we really don't know what is going to happen at the moment,'' a director of SportsMate, Patrick Fitzgerald, told BusinessDay.
Another grey area is whether free-to-air television delivered over the internet, known as internet protocol television, would be affected by Telstra's exclusive online rights.
At present, free-to-air digital television can be integrated with internet content, but is still transmitted to houses through radio airwaves. This would not count as internet streaming, according to a spokesperson for iiNet, which offers Fetch TV plans.
But in coming years, as the NBN is built, households will be able to stream television straight through a fibre connection.
Deutsche Bank analyst Andrew Anagnostellis said that IPTV rights would come under increasing scrutiny.
''You can imagine in a few years, particularly in an NBN world, it will become increasingly important so these rights will have more and more value,'' he said.
He said that even though major sports events were expensive programming, free-to-air networks needed them to compete with the internet.
Oztam statistics show about 3.3 million people watched last year's drawn AFL grand final, with about 2.6 million returning for the rematch the following week.
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