No more than 18 months ago, internet marketing boffins were
defending the web for its shortcomings by describing it as being in the
early days of development of model "T" Ford country.
But the web's development has moved on apace since then and now, with
the prospect of broadband going nationwide in the next few years,
marketers are busily trying to get ahead of the game in the latest
favourite net revenue source - streaming media.
Last week's news that Manchester United is in the final stages of a
pitch for the revamping of the front end of its portal could be a clue
as to what the club is up to. And other Premier League clubs have just
started to dip their toes into the world of rich media to see what money
can be made.
Liverpool, Arsenal and Leeds United have started a streaming content
service that now offers match highlights and special interviews. Leeds
have given this added value to fans for free, for now anyway, but
Arsenal fans will have to fork out £45 a year for this new
content. And clubs know that fans will pay, their loyalty is far
stronger than that of any "customer". Clubs also need the money.
Alex Fynn, a former deputy chairman of Saatchi & Saatchi who has advised
a number of leading clubs on media and marketing, explains: "Football is
a very badly run business. Even in the Premiership, which receives close
to £1 billion of income (per year), the majority of the clubs
don't make a profit before tax.
"The reason for this is that while income is going up by 20 to 25 per
cent, wages are going up faster. So football clubs always need money in
the short term. The only solution to their problems is to have
short-term success, and the answer to short-term success is to throw
money at wages and transfers. Therefore clubs are always on the look-out
for alternative sources of revenue - and that's all that this is. They
don't understand marketing, let alone new media."
David Stubley, the managing director of Sportsmedia, agrees: "Streaming
media is certainly going to be one revenue stream. But this will have to
have a lot of added value around it as well, such as archives and other
stuff that cannot be found elsewhere.
"Clubs could make certain games available only on broadband. Celtic last
year ran its first-round UEFA Cup match just online for free, didn't
promote it, and got 25,000 people watching the match through a grainy
picture on a PC. This shows that it can be done even when the pictures
are of poor quality."
Apart from bringing in much-needed cash, this chance to screen games
over the internet could, in theory, cut out the broadcast middlemen and
allow the clubs to own the rights to their games. This might never
happen but the possibility will certainly affect rights negotiations in
the next few years.
"A lot of contracts that are in place at the moment were agreed four or
five years ago and people were just gifted internet rights," Stubley
"In those days it wasn't interesting to think about. Now people are a
lot smarter as the market has moved on. They are ready for this kind of
conversation now. In the next review it will be a major factor in
"Clubs will probably want to keep their digital rights but having said
that, to get the pictures they will need a broadcaster to provide them -
so I would imagine that it will be more like a side deal that will be
done with the broadcaster. Alternatively they might negotiate a
lucrative cartel deal for broadband and wireless together."
Actually, this is already happening. "In this year's negotiations with
the Football League, internet rights were separated from broadcast
rights," David Cuff, Flextech's commercial director, says.
Cuff states that while only a few Premiership clubs have sold off their
internet rights in a bespoke manner to different bidders, the clubs in
the lower leagues have banded together. Seventy-one out of the 92 clubs
sold the internet rights to the internet broadcaster Premium TV, but in
deference to broadcasters, the clubs cannot show highlights in the 48
hours after the matches.
A Premium TV spokesman comments: "We provide clubs with expertise and
management (in these media) and we have to make sure that the clubs
produce the best content - and traditionally they need a little
encouragement to do that. They are doing well but they'll get
Clubs that once viewed sites as a cost centre are now starting to see
them as a revenue stream which can possibly have brand benefits. "With
content focused on the fans, it makes everyone feel both more informed
and included," the spokesman comments.
Premium TV is aware that it is in the early stages of streaming
"We won't get it right at the beginning - we have to ask the fans what
they want. How long do they want the clips? What footage do they want to
see? We are trying to create a good service for the fans with value,"
the spokesman adds.
"So many marketing opportunities are missed because of the inertia and
lethargy of both the fans and the clubs. Now if you get a decent
marketing channel that is value for money then I think it's a win for
Fynn is more sceptical: "What clubs ideally want is control of their own
rights. This is the nearest they have got to it. Rights are negotiated
centrally and deliver them a lot of money - it's the best TV deal among
all the major football countries. But it only covers a small proportion
of the matches and the clubs therefore want access to all of their games
- not because they think they can build a better relationship with their
fan base, but because they think it's a way to earn money."