Tuesday, July 04, 2017

Sports Rights Holders Are Finally Balancing The Books


It took a while, but the sports industry (what a horrible oxymoron that is) seems to have woken up to the value of its rights.

Well over a decade ago, I remember that we bid for an online system for the World Rally Championship. When I grew up, this was a hugely popular sport that would attract a quarter of the population of Wales onto the streets and into the forests on cold, dark November evenings. Rallying was bigger than Formula 1 back then by some distance. But they never got the TV right. They looked for a quick buck and handed their TV rights to a company that paid them, not to an organization like ours that was going to charge them. Big mistake. Who watches rallying now ? The sport is a sideline and the live events attract a tiny fraction of their previous audiences.

Many sports became too greedy. Boxing is still getting by, but no free to air broadcaster want to transmit two guys battering each other into hospital beds, so that's a special case.

But cricket. Oh, cricket. In an age where there are as many channels and as many feeds as you can ever wish, finding a single day's play of a county game is impossible. Even the TV friendly T20 format has struggled in the UK thanks to being confined to pay TV.

Likewise, the likes of the BBC and S4C can no longer compete for top level rugby, so the sport became present only in the 4m or so homes that can afford Sky Sports on its own service or on Virgin or Now TV.

Obviously a number more viewers go down to the dwindling number of pubs willing to pay the exorbitant fees charged by Sky to watch matches, if they can navigate around the football viewing in the local boozer, of course.

Then something dramatic happened. People in the UK and US stopped buying sports packages.

Of course, many of these streams are available from pirate sources, which the broadcasters have been very slow in dealing with. But the trend is clear. People are no longer willing to pay £40 for sports coverage when Netflix and Amazon provide phenomenal entertainment for £7.99 a month. The demands of Premiership agents and their over-preened 'stars' is in danger of destroying the model.

And the sports federations also realised that no one was turning up to watch their sports, or playing them, since they had sold their souls to appeal to an ever diminishing pool of people willing to pay through the nose for their rights.

So, all of a sudden, sanity seems to be breaking out in the sports rights market, with both cricket and rugby in the UK being made available live on free to air channels, albeit in sample sized, 'get them hooked' packages. Sky Sports, meanwhile, has split its rights more logically along channel bases: this means they can see who is willing to pay for what sports, rather than annoyingly obfuscating their services over several channels and red buttons.

So, from a rights holder perspective, we seem to be seeing some sanity and logic returning to the broadcasting of sports.

To paraphrase a former famous neighbour of mine, “An agent is a man who knows the price of everything, and the value of nothing.” Thankfully, sports federations seem to have realised that the value of sports coverage extends beyond lucrative but restrictive packages.

But he next pratfall are all the 'new broadcasters' waiting in the wings, promising the earth for nothing. Beware the geeks bearing gifts, sports rights people...

Tuesday, June 06, 2017

The Importance Of Rights

 

You may think that rights are things that only big companies need to worry about, but this is far from the reality.


If you have a website, then there's a fair chance that you have acquired rights for software. In fact, a simple website probably has many, many licences attached to it, from open source to fully commercial. And then every image that you use on your website, brochure and presentations have rights attached to them.


Of course, you can ignore all of this, but clients are increasingly conscious of the need to audit their suppliers and maximise the rights they own and have acquired, so there are sound commercial reasons for effectively managing your rights.


Companies have two kinds of rights to deal with:


Rights in or acquired rights

Rights out or rights owned and available for sale


These obviously need to be dealt with separately, but rights in and rights out can often be linked. If you produce a book, but use an illustrator; if you produce a video with music and actors, you are dealing with rights in linked to rights out, and often this can be part of an even wider ecosystem. We call this the "rights chain".


The effective management of your rights involves a number of key steps:


  1. Audit and record your rights
  2. Make your rights available and searchable
  3. Track the usage and sales of your rights
  4. Link your rights to other business systems


Rights are often granted or defined  in contracts or deals. Sometimes they are bundled together or offered as part of comprehensive access: a viewer's Spotify or Netflix accounts is an example of this, as would be a subscription to an image bank or music library.


These rights, in turn, are made up of what we call "rights dimensions": these cover what rights have been acquired or awarded, eg territory, language, window (start and end time and date), usage, platforms and so on...


The permutations are potentially infinite. 


Traditionally the granting and usage of rights are handled by lawyers in non-standard contracts, but increasingly larger organisations such as Amazon, Apple and Netflix handle their rights in a standardised way. 


Moreover, software such as TV Everywhere's Assetry platform enable rights to be managed effectively in the cloud. It's used by major brands, ad agencies and even pharma companies, indicating how prominent rights management is becoming; important not only financially, but also for compliance.


It's time for every organisation to reflect and review on how they use and manage rights. In a world where many things are becoming virtualised, rights are everything.


Monday, May 29, 2017

The Rise Of The Social Engineers

 

Slowly, insidiously, our world changes without our noticing. A couple of shops on the hight street shut, but we don't put it down to Amazon; the local newspaper goes online only, but we don't blame Google; your mate's band, who once thought they could make it, go back to day jobs, and you don't blame YouTube or Apple; black cabs are hard to find, but we don't blame Uber.


Of course, engineering change in a way that society, and especially governments and regulators do not notice is not new. Dale Carnegie was his era's equivalent to Mark Zuckerberg, but without the 


The canal owners lost all their money when the railway moguls came along, and they, in turn, lost their shirts when roads were built. And the taxi drivers complaining about Uber will eventually lose their profession to self-driving cars, not to cheaper alternatives. It's all about being in the right place at the right time and taking advantage.


In Silicon Valley they like to invest in what they call disruption. This generally uses a lot of investors' money to subsidise a new business model in the hope that it will become a monopoly.


By any definition of the term, Google has a monopoly on search and text advertising in the UK; Facebook has a monopoly on the internet in many parts of Africa. But Comcast has a monopoly on TV and broadband over vast swathes of the US, as does BT in many parts of the rural UK. Uber, JustEat/Hungry House and many others have prominent positions in their vertical markets. We have become a world where monopolies are, once more, acceptable to those we vote to serve us, and this bothers me tremendously.


The problem is not just commercial. All the current regulation and revenue generation is based on those old models - rates, corporation tax, sales tax, trade agreements are not fit for multinationals with monopolies, offshore bases and far cleverer lawyers and accountants than any government bureaucracy.


At least Trump has proposed tax reform to encourage Big Internet to repatriate their vast wealth in a way that will benefit the US. In the UK during recent political campaigning for national elections, none of the political parties have come up with even a vague plan that addresses the real issues faced by the UK economy, Brexit or not: the cost to the UK economy of its recent boom has been tens of billions of pounds that could have been spent on poverty, health and protecting its citizens which have gone into the pockets of some of the world's wealthiest people, making them even wealthier and more powerful still.


Meanwhile, Big Internet is all about a cozy public image and subtly engineering social change for their own benefit, much as the British East India Company and Cecil Rhodes once did. Mark Zuckerberg has built a vast personal fortune by stealing your data, broadcasting snuff movies and destroying small businesses. We are living in a new era of robber barons and corporate states, outside normal laws and bigger than nations (Apple is bigger than New Zealand by revenue v GDP).


And at the same time politicians have made their constituents obsess over irrelevant political alliances and trivial trade agreements whilst kowtowing to Big Internet to a degree that beggars belief (it was difficult to tell the difference between Google senior management and David Cameron's main advisors at one point in the UK).


Meantime, the Big Internet juggernaut rolls on, consuming ever greater parts of our lives, our futures and possibly our souls. The next time you are poor, just start wondering why Google, Facebook et al are not paying you for your data, and are not paying for the societies they are destroying so that they can replace them with their own social networks.

Tuesday, May 23, 2017

All Those Subscriptions


So, Amazon Prime is adding subscription channels to its service (actually they're VOD bundles with a live stream).

In the fragmented world that is TV cord cutting that's to be welcomed, but the channels are hardly must-haves (Eurosport and its diet of largely second and third tier sports; Discovery and ITV Encore, for example). Whilst the cost is quite breathtaking, some channels are trying to get punters to pay £9.99.

In a world of free this is a tough ask.

And the problem is that it soon adds up.

Here in the UK I subscribe to the BBC (yes, I know, "licence fee" is what they call their obligatory subscription model) at around £12 a month; Netflix at £5.99, Now TV at £6.99 and Amazon Prime at around £6.25. With the odd PPV thrown in and ad supported service such as ITV, UKTV, Channel4 and Channel 5, that's enough for me. Around £35 - 50 a month. When you cord cut, you're on your own out there in SVOD Land.

Start adding other services and it becomes expensive - more expensive than Virgin or Sky.

But not compared to the price of seeing one movie in a cinema at £8 for just one viewing (not including the popcorn and noisy kids). But we live in a dollars to cents world and content needs to readjust. 

What's truly extraordinary about 2017 is that there is more, better content (call it TV, call it Film, call it Video, call it Entertainment.. and then have a spat in Cannes about what it is) than ever before. And it is accessible at pretty good prices. Apart from sport.

And this is the quandary. Traditional broadcasting services bundle and use volume to negotiate the costs down for the viewer. I guess cynically what they do is use third party services to underpin their own channels (or vice-versa). And they use premium sports products to drive their subscriptions, a golden goose that is being throttled within an inch of its life.

And the whole time there's the alternative of piracy.




Saturday, May 20, 2017

Predicting Me


I'm actually quite important, I think. Some of the world's biggest companies are spending billions on trying to profile and target me. They want to know all about me. 

And now broadcasters seem to care about what I actually want to watch. (Commercially I would want to build the most loved content service that no one wants to watch, since this is commercially optimal - sports channels broadcast 24 x 7 but viewers only want to watch 4 hours of football a week: my viewing habits are so esoteric that I might be difficult to target through content tags and categories: jazz, rugby, Scandi Noir).

Sorry... What do you mean ? They're doing the same to you ? We're all being profiled! But I thoughts I was special! That's why I ticked all those boxes and gave them all my data...

Drat. 

But, of course, my data is more special. I'm richer (well I think I spend more). Or will their profilers see that I actually stay at home, shop at Tescos, cook a lot and really spend very little ? It won't know that I own a few properties outright, so will think I'm poor since financial activity equals wealth, because they measure everything from their side of the equation. Paying mortgages and debts gives them data points. Sitting at home watching Freeview doesn't.

And the fact that I barely have any income (as an entrepreneur espousing salary is the most efficient form of investment) marks me as a pauper, not the paper millionaire I am (and that term means very little these days).

Netflix spends programming time in predicting what I'd like to watch and I, myself, provide spurious data to the likes of Apple Store and TripAdvisor.

Online I research and sometimes buy stuff, then still see the ads six months later: yeah, nice and efficient programatic. Makes loads of money for the likes of Google and makes life easy for the lazy ad agencies.

All of this technology, all of this effort and all the bad ad guys are encouraging by measuring all the wrong things. As Trump might say. Bad data. That data is so bad... Such bad data...

The problem with models is that if you miss one data point, it's futile. All computer models are futile and AI makes them worse, not better, since it generalises where specifics would be preferable.

And that's why those marketing to me are so bad and inefficient, and why these so called 'AI' engines are so bloody dumb and useless in reality: like factories they produce cars in any colour as long as it is black.

Hey you, focus on me, not you and your technology!


Wednesday, May 03, 2017

ITV Is In Play (Again)

 If there's one thing that I've learnt is that success in business is as much about being in the right place at the right time as it is about any entrepreneurial skill.

CEOs see the writing on the wall long before anyone else and the announcement that Adam Crozier is stepping down at ITV is a harbinger.

When he took the job I thought the company was done for, but investment in content and a blitz of acquisitions saw revenues and profits rise.

But, at the end of the day, ITV's business model is built on domestic advertising, an area where Google and Facebook have been making considerable inroads with their video offerings.

ITV is too small to become a service provider and is very likely to be snapped up by Liberty Media, BT or even possibly Vodafone, who surely have to make a TV play in the UK at some point. 

ITV has made very heavy weather with their online offerings and have never cracked the medium.

And with sports rights now likely to be bought on a pan European basis, the few top class events the company has are likely to become difficult to hang on to.

My money has long been on Liberty Media to snap up ITV by the end of the year.


Monday, May 01, 2017

The Building Blocks Of TV in 2017

 

Once upon a time you got a licence, and then hired some program makers and some ad sales guys, and you had a TV station. You added a few more stations and you had a network, or bought some infrastructure and became a broadcaster or a cableco.


How things have changed.


Today you can buy a $13 mount for your smartphone, go a little wild in front of the camera and get a couple or millions of 'followers' on YouTube or Facebook. Suddenly, you're a TV mogul.


The former model, highly regulated and controlled, was, until very recently, being trashed by the new model, especially amongst 'key demographics' (read: the viewers of the future).


Then came piracy, beheadings and child murders live on Facebook and YouTube: the safe harbour provisions of the DCMA may be fine for piracy, but for murder and terrorism ?


All of a sudden we are in a brave new world of broadcasting where a lot needs to be redefined and all bets are back on the table.


But, the context is not new: the model has been seen before in the music industry.


The problem with the music industry is that they let themselves go cheap, first of all to MTV, then iTunes and then YouTube; they've done better with streaming. Despite the growing pains, Spotify is slowly becoming a gold mine. Content is king and streaming is where it's at.


So, what does it take to build a TV content service for the future ?


I'd argue the following:


Logistics - producing and distributing across multiple devices on multiple platforms at optimal quality and the lowest cost remains a major challenge, as do associated issues such as metadata management.


Rights - you need to own and control the correct rights and be aware of any residual costs; this is a hugely complex and under-estimated area.


Content - remains king; this is what draws in the punters and turning content into a brand is quite a skill; turning it into a global brand is an even bigger challenge.


Services - a linear channel, an app, an OTT service; the user interface, the content mix, the user experience; no one has aced this yet. The BBC iPlayer and Netflix are both frustrating to use, for example.


Security - how do you prevent piracy and commercial seepage ? A mix of the right pricing, availability/distribution, technology and policing. Another complex field.


Commercialisation - so, who pays the piper ? Old revenue models were simple - a cinema ticket, public service payment or advertising supported. Now, models are more complex and nuanced and need constant tweaking and development.


Audience Building - ah, the punters: the people who pay for all the above. Easy to find on Facebook or YouTube, but then they're not your audience, are they ?


It's not simple, and empires will fall. Contact us if you'd like help navigating this maze.