Kevin McCullagh from TV Sports Markets looks at how two newspaper sports-rights deals are showing signs of increased potential for internet clips, content that has been notoriously difficult to monetise.
Historically, buyers of football internet and mobile clip rights have struggled to monetise even hugely popular content such as the English Premier League.
Advertising rates for internet video mean that tens or hundreds of millions of views are required before serious revenue is generated, and there have been few successful attempts to monetise clips through subscriptions.
However, this could be about to change as newspaper publishers gradually migrate their titles from free online services to subscription services, and the sports rights industry is following two separate football deals very closely.
The English Premier League internet and mobile highlights clips in 2013/14 are exclusively available in the UK to paying subscribers of News International newspapers, which acquired the rights, from 2013/14 to 2015/16, in a deal worth over £20 million across the three seasons, in January.
In Germany, meanwhile, Bundesliga internet and mobile highlights clips in 2013/14 are available via a mixed paid-for and free service from Bild, the country’s leading tabloid. Bild’s owner Axel Springer, Europe’s biggest publisher, acquired the rights from 2013/14 to 2016/17, in a deal worth around €20 million across the four seasons, in April 2012.
Most newspapers have failed to drive adequate advertising revenues from free online versions. At
the moment, the number of newspapers behind a paywall is small, but some in the industry believe that all newspapers will be within five years.
“It’s experimentation time, they are looking for game-changing opportunities,” William Field, media consultant at Prospero, told TV Sports Markets, adding that sports video is set to be a particular target for experimentation. “It is a certainty that online newspapers will make greater use of better-quality, better-integrated sports video than they have before.”
Internet clip rights will always be worth a fraction of the value of live and highlights rights, and, where they remain a separate category, TV rights. As one expert put it, the Premier League clips “are never going to be the £1 billion-per-year business that the live TV rights are” – but there is a belief that clips values could be improved through better exploitation.
News International’s Premier League clips are part of a £2-per-week subscription to internet and mobile content for The Sun, the UK’s best-selling tabloid. The content includes in-game clips for all matches other than 3.00pm Saturday kick-offs, and extended highlights clips of all matches on a Monday morning following a game weekend.
This is not the first time News International has tried to monetise Premier League clips. It acquired mobile clip rights between 2007/08 and 2009/10 jointly with BSkyB, but the product it launched – 24-7 Football – failed to generate large revenues. Clips were offered for £5 per month or £0.50 per clip.
Axel Springer is keeping Bild’s general news content free online, but offering the Bundesliga clips in a part-pay-per-view, part-free model. They will be available on a pay-per-view basis from one hour after matches finish until midnight on that day. After midnight, they will be free.
For several years Axel Springer has bought minor sports rights on an ad hoc basis and offered them via pay-per-view on the Bild website. This hasn’t been limited to clips – in 2011 it acquired live streaming rights for Turkish Süper Lig and Dutch Eredivisie football and earlier this year it acquired live streaming rights for the final of the 2013 German ice hockey cup.
Experts argue that clips can be made more valuable by exploiting them in new and compelling ways, and that newspapers are the organisations best placed to do this. Their expertise in text and graphic-based content is considered a key strength. “Great words, statistics, social media and sharing functions” will be at the heart of the new wave of exploitation models, one expert said.
In-match clips are considered particularly valuable. One expert said he expected the clips made available by rights-holders to become richer as newspapers prove they can do a good job of using them. Rights-holders and broadcasters would also learn that this did not undermine the value of live TV rights because it was “an entirely different proposition,” he said.
However, some rights-holders could be reluctant to make clips available for subscription services, Oliver Slipper, joint chief executive of digital media company PERFORM, told TV Sports Markets.
“A lot of rights-holders take the view that selling clips gives an opportunity to reach a very broad audience,” he said.
Internet advertising rates are too low for most newspapers to make large revenues from advertising-funded clip models. Internet video advertisements generate between £5 and £15 per 1,000 viewers around the world. So a clip viewed by one million people may generate only £5,000.
Google-owned YouTube takes a large cut of advertising revenue around the clips it hosts, limiting rights-holders’ earning potential from the world’s biggest internet video platform.
One agency executive that recently marketed clip rights for a famous football goal said he could make “more money from one deal with a traditional broadcaster in Slovakia” than he would make in 10 years from YouTube.
But internet video advertising is growing in value. In 2013, the sector is expected to be worth about $3 billion in the US, and about £200 million to £300 million in the UK.