Live from Web Summit 2014: The evolution of sports broadcast – where do we go next?
Web Summit 2014 kicked off in Dublin Tuesday, with 22,000 attendees expected over three days at the Royal Dublin Society showgrounds. With over 2,000 start-ups exhibiting, 600 speakers, 700 investors and 1,300 journalists attending the event, Web Summit has rapidly become the largest web tech event in Europe and is now dubbed ‘Davos for geeks.’
Since its 2010 foundation, Elon Musk of Tesla, SpaceX and PayPal; Niklas Zennström, founder of Skype; Reed Hastings, founder of Netflix; David Karp, founder of Tumblr; Jack Dorsey, founder of Twitter and Square; Steve Case and Tim Armstrong of AOL; and Chad Hurley and Jawed Karim, co-founders of YouTube have been among a long list of speakers at the Web Summit.
Speakers confirmed for 2014 include Peter Thiel, co-founder of Paypal and Palantir as well as the first investor in Facebook; Drew Houston, founder of Dropbox; Padmasree Warrior, CTSO of Cisco; John Sculley, former CEO of Apple; Brendan Iribe, CEO of Oculus and Eva Longoria of the Eva Longoria Foundation.
New York Times reporter Emily Steel chaired a Tuesday morning session on the Web Summit Sports Stage titled ‘The Evolution of Broadcasting: Where do we go Next?’ She first asked the panel if the current boom in sports TV broadcasting rights revenue was a bubble that might burst, just like property bubbles we have recently seen. Colm O’Neill, BT Sport Ireland CEO replied, “Hard to know. We were in a giant property bubble here in Dublin but we didn’t realise it. You never know you’re in a bubble while you’re in a bubble.”
Benjamin Levy, President & CEO of theScore said, “I cannot see anything that would cause the increase in the cost of broadcast sports rights to de-escalate.” Levy told the packed Sports Stage that theScore was originally an independent sports TV network. “We bought the rights to English Premier League in 2003 and helped grow the game in Canada,” he said. But as an independent company, that very success conspired to price them out of the market when the next EPL rights tender came around.
“We had to make hard choices about the sports in which he invested,” he said, and bidding again for the EPL meant “we could no longer afford to operate if we bought the rights.” Live TV broadcasting of major sporting events is “now controlled by the very large broadcasters and the large programming groups,” said Levy. “That’s not good or bad; it’s just the reality of the marketplace.”
Amory Schwartz, Founder & CEO, SA Sports Media, was in agreement. “If you innovate and are successful, you only make that sport more valuable. We saw this with NASCAR, which was a niche sport down south.” However it was developed over a number of years with added production values to build an audience, “and then ESPN came in and swept it up. Money is the only thing that talks for the rightsholders; they’re in a very privileged position,” said Schwartz.
Moderator Steel asked O’Neill of BT Sport to respond, from the position of a ‘very large broadcaster’. O’Neill was matter of fact. “We are a telephone and networking company. People buy telephone and broadband in a package, which now includes TV. And live sports is the thing that drives TV – it’s the key thing customers want. Yes it’s part of a subscription package, but we’ve tried to build a model that brings sport back to people. When I grew up, sport was available on a Saturday afternoon. We’re trying to bring that back.
“Sport is seeing a massive change,” O’Neill continued, “in terms of technology, analysis programming, the fan experience, and innovative services alongside the main broadcast. We’re nowhere near the limits of the technology – for example in heads-up displays, spatial analysis and the augmented reality area such as Oculus Rift. There are lots of technologies that exist today that haven’t yet been knitted together” and applied to the sports marketplace, he said.
Benjamin Levy made the point that sports rights can directly influence the development of new technologies. “The English soccer rights are on a three year cycle,” he said, “but in North America you’re looking at eight, ten or 15 years. This provides the broadcaster with the opportunity to experiment with technologies. One example is player-tracking systems, which came out of missile technology developments. Another is the camera mounted on a referee’s helmet. There are some kinks to be ironed out [in these areas], but anything that enhances the fan experience is good news.”
If as an industry player you are priced out of the ever-escalating TV rights race, ingenuity is the way forward according to Levy. “If you don’t own rights, all you need is a little bit of creativity. Mobile technology has opened the opportunity to get into people’s pockets without the need for sports rights. There are interesting opportunities – as the big broadcasters are preoccupied with recouping the huge cost of rights. You have to find your niche.”
Finally, O’Nelll from BT Sport was asked what the company would do if they found themselves priced out of the major sports rights market. “I think we would look at two areas: one is emerging markets, and I’d cite the example of IPL Cricket in India here, which has been a massive success; and the other is betting. It’s an area of relatively low risk, and very high return.”